Around 4:30 pm, AAPL was halted....that means very bad or very good (more likely very bad).
10 min. later or so the result came in...
EPS: $1.26 vs $1.11 (analyst consensus)....great (note...I anticipated exactly $1.26)
but the guidance....
$1.06 - $1.35 vs $1.66 (analyst consensus).....beyond comprehension...
My heart almost stopped...
AAPL always give very very low guidance, however, this was mathematically impossible (as Gene Munster said). By then...I was calling SJ all kinds of nasty names....
The conference call started at 5 pm, the trade reopened at 5:10pm....I saw $85 bid coming in that was more than 6% below the closing price (AAPL was taken down 8% during the market hours). Then they announced that they have already sold 10 million iPhones this calendar year (they have already met their target of 10 million).
And something miracle happened....SJ's cameo appearance....shorts started covering....
Then the tone of the conference call shifted quickly.
Yes....they acknowledge the current economic sentiment, but SJ said he is going to stick with their current customer base....AAPL will not sell low end laptops like HPQ and Dell....AAPL will not go there....however, AAPL will give more value to the customers who buy their products at their current price range.
Now AAPL has about $25 billion cash in hand, which is bigger than Dell's market cap.
In addition, AAPL decided to provide non-GAAP based financial statements. AAPL started to apply "subscription accounting" when they introduced the iPhone (in this case AAPL recognized revenues and cost from iPhones over 2 years, i.e. 1/8 per quarter). According to SJ, such subscription accounting has misguided investors (actually, I sent numerous mails to AAPL asking for non-GAAP financial statements).
By 8pm, AAPL was traded as high as $104.
And....I forgot to mention that iPhoens outsold Black Berries...AAPL achieved to be No. 1 in the smart phone space in less than 15 months, and AAPL did this when gasoline was over $4 a gallon.
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