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Does Apple Always Lowball Guidance?

The excitement every quarter when Apple beats by a landslide can be summed up in one word: Lowball.

That’s right — Apple offers up guidance that is purposely conservative.

Proof: When Apple announced second quarter results Wednesday, it blasted through revenue and earnings expectations. But its third quarter guidance lagged, with an earnings forecast of $5.03 per share on revenue of $23 billion. Consensus expectations was for earnings of $5.25 per share and revenue of $23.8 billion.

In most companies, a miss like that would crush a stock. But Apple’s shares lifted 2 percent on the news.

When I dared question on Twitter and the frenetic Apple feed on StockTwits about whether the miss would eventually matter, I was laughed off the stage.

“They always sandbag,” was the typical response.

To which I tweeted back: “If they always lowball and everybody knows it, what’s the point of guidance?”

Again — laughed off the stage.

That's because at Apple, beyond the normal jaw-dropping performance, part of the game is the beat, not the guidance. With the company still apparently in growth mode, everybody knows to ignore it.

Questions? Comments? Write to HerbOnTheStreet@cnbc.com

Follow Herb on Twitter: @herbgreenberg

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