Great News! Stock Tanks! (10/12/05)
SceneLink
 

Well, of course you've all heard by now that Apple did it again: according to the company's press release, it posted a $430 million profit last quarter on revenue of $3.68 billion, beating analysts' estimates and boosting year-end earnings and revenues to $1.335 billion and $13.93 billion respectively. That's a 384 percent profit increase over 2004, and also makes fiscal 2005 the company's best year ever-- financially speaking, anyway. Overall it can't compare to 2002, when Steve Jobs once won five games of Klondike in a row and also found a whole box of raisins-- sealed-- just sitting in the parking lot of the Circle K, but from a monetary standpoint, 2005 definitely finishes ahead.

As usual, the good news came fast and furious: Mac sales grew year-over-year by a whopping 48 percent, iPod sales were up a bordering-on-obscene 220 percent over the same time period, Apple's cash stockpile keeps growing and is apparently now up to over $8 billion, the company had its best sales in the education market in ten years, its retail effort is doing so well it's planning to open another 35 to 40 new stores in 2006, etc. etc. etc.-- and yet, within 30 minutes of Apple posting its Q4 results, its stock had plunged 10 percent in after-hours trading. What gives? Er, other than the fact that Apple's stock price always dips after the company announces better-than-expected financial results?

Well, as it turns out, apparently Wall Street was disappointed by iPod sales. It seems that a 220 percent year-over-year growth rate just wasn't good enough; as BusinessWeek described the situation, "iPod sales were merely torrid-- while analysts were looking for nothing less than molten." Apple's earnings call clarifications calmed the panicked sell-off a little; as MacNN reports, Apple still has 75 percent market share among MP3 players, despite having tapered off iPod mini shipments prior to the intro of the iPod nano. That artificially lowered overall iPod sales, as did the fact that Apple was unable to meet the "staggering" demand for the nano. That means there's already a backlog of deferred sales queued up for Q1/06, which mollified Wall Street somewhat and AAPL closed at 49.25, down only 4.75 percent and basically where it was just a little over a month ago. Heck, it's only $1.12 lower than it was just two days ago. So not much ground was lost after all.

Still, though, we don't mind admitting that when we saw AAPL shed five or six clams within half an hour of Apple's earnings announcement, we got a little worried. Like, "change of pants" worried. It all just underscores how fragile Apple's current love affair with Wall Street really is; all of the gains in recent years were based, more or less irrationally, on iPod sales. Despite record revenues and profits, one quarter of slower-than-expected iPod growth-- growth, mind you, but growth that's not as fast as analysts want-- is enough to send shares into free-fall. We fear for our retirement fund. Maybe we should sell some of our AAPL and put the money into something a little more stable. Besides, we always thought a few Krugerrands might class up the joint a little...

 
SceneLink (5276)
And Now For A Word From Our Sponsors
 

Mash-ups and original music by AtAT's former Intern and Goddess-in-Training

Prim M at YouTube
 

The above scene was taken from the 10/12/05 episode:

October 12, 2005: Apple has its best quarter and year in the history of the company-- so of course its stock tanks. Meanwhile, Steve Jobs trots out new iPods that can show video (no, really!), and instead of new pro Macs, Apple introduces the latest iMac G5, complete with an integrated iSight camera and a remote control...

Other scenes from that episode:

  • 5277: When Dreams Come True (10/12/05)   Holy wintergreen tartar-control gel on a cracker, they actually did it: as Apple describes in an official press release, Uncle Steve did indeed take the wraps off of the fifth-generation iPod at today's special media event-- and it does video...

  • 5278: As Pro As We Need It To Be (10/12/05)   Oh, and what's with the total dearth of new Power Macs and PowerBooks today? Looks like the rumor mill has been running a little creaky lately; instead of new pro Macs, Steve trotted out a brand new iMac G5-- or, rather, the same old iMac G5 with a few new tricks up its sleeve...

Or view the entire episode as originally broadcast...

Vote Early, Vote Often!
Why did you tune in to this '90s relic of a soap opera?
Nostalgia is the next best thing to feeling alive
My name is Rip Van Winkle and I just woke up; what did I miss?
I'm trying to pretend the last 20 years never happened
I mean, if it worked for Friends, why not?
I came here looking for a receptacle in which to place the cremated remains of my deceased Java applets (think about it)

(1293 votes)
Apple store at Amazon

As an Amazon Associate, AtAT earns from qualifying purchases

DISCLAIMER: AtAT was not a news site any more than Inside Edition was a "real" news show. We made Dawson's Creek look like 60 Minutes. We engaged in rampant guesswork, wild speculation, and pure fabrication for the entertainment of our viewers. Sure, everything here was "inspired by actual events," but so was Amityville II: The Possession. So lighten up.

Site best viewed with a sense of humor. AtAT is not responsible for lost or stolen articles. Keep hands inside car at all times. The drinking of beverages while watching AtAT is strongly discouraged; AtAT is not responsible for damage, discomfort, or staining caused by spit-takes or "nosers."

Everything you see here that isn't attributed to other parties is copyright ©,1997-2024 J. Miller and may not be reproduced or rebroadcast without his explicit consent (or possibly the express written consent of Major League Baseball, but we doubt it).