I hadn’t even thought about this until Apple reported second-quarter results last night, beating by a landslide with third quarter guidance that was below expectations. It dawned on me,as I wrote last night: This makes so sense.
At a fast-growing company like Apple, sales and earnings are moving target. The big growth numbers should speak for themselves. Rather than meeting or beating, the numbers should tell the story: Either the growth is accelerating—or it’s not. (With Apple, it is!)
Looking for a check-and-balance, I tweeted this morning: “Should Apple or any fast-growing company give guidance?”
Former analyst and Business Insider proprietor Henry Blodgett was first in. “Hell no,” was his response. (Why don’t you tell us what you really think, Henry!) Options scribe Adam Warner chimed in, “It’s a pointless parlor game; they lowball analyst numbers artificially low and then magically the company ‘beats’.”
Added blogger Terry Corcoran: “One day they'll come in on that number and the stock will plummet. Which is sort of your point, guidance is silly.”
There were dissenters, like Michael Dawson, who wrote; “Whether it’s bogus or not—companies should be accountable to someone outside of its four walls.”