) earnings results have become a vicious cycle. The company cannot
report a single sales figure -- record-breaking or not -- without
disappointing some analysts and investors. When the iPhone 5 came
out, the company sold more than five million units worldwide,
beating the previous record set by the iPhone 4S. The iPhone 5 also
beat out records set by other smartphone manufacturers.
That was not good enough for Wall Street. With select analysts
telling the world that Apple will sell as many as
10 million units
in a weekend, investors expected more from the Cupertino,
California-based tech giant.
In China, Apple sold
two million units
the moment the iPhone 5 was released. That was not enough to
satisfy investors, who continued to abandon Apple in the days that
The Mac maker did not perform any better when it announced that
three million tablets
when the iPad Mini and iPad 4 were released.
Apple lost more than 12 percent of its value after announcing
that it had sold
47.8 million iPhones
in the fiscal first quarter. To be clear, that record-breaking
number is 10 million units higher than the iPhone 4S sold during
the year ago period.
Regardless, investors were disappointed because they had
expected Apple to sell more than 50 million units. Even if that
expectation were justified, 47.8 million units is very close to 50
million. Thus, it seems that some investors will never be
To see if that is indeed the case, Yahoo Finance (NASDAQ:
) asked the following question in a poll this week:
Apple posted record earnings, but shares are still getting
slammed. Is the company a victim of high expectations?
Yes, the Street is way too optimistic (30,612 votes) -- 44 percent
No, fears about growth are justified (13,369 votes) -- 19 percent
If you rise too high too fast, you're bound to have a hard landing
(25,939 votes) -- 37 percent
In an attempt to bring those expectations back to reality, Apple
announced that it expects to report revenue between $41 billion and
$43 billion during the second quarter. Not surprisingly, investors
were not happy about this either.
After posting record quarterly revenue of $54.5 billion and
record quarterly net profit of $13.1 billion during the first
quarter, investors expected Apple to continue growing. And if the
company does keep growing, they will likely argue that Apple did
not grow large enough.
If 44 percent of investors think Wall Street is too optimistic,
that leaves another 56 percent who may be tempted to dump the
stock. Consequently, Apple could continue to tumble.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.