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

Follow Herb on Twitter: @herbgreenberg

CNBC Data Pages:

More Earnings Reports This Week:

General Electric*

Morgan Stanley

American Express


* General Electric maintains minority ownership of NBCUniversal, CNBC's corporate parent.