SAN FRANCISCO — Call it the curse of great expectations.
Apple did just about everything right in its latest quarter. The company increased its profit by more than 50 percent and boosted revenue by nearly 40 percent over the same quarter last year.
It was the second-best three-month period ever posted by the maker of the iPhone, iPad and iPod. Apple pulled it off amid economic uncertainty and fears of another recession.
But Apple Inc.’s shareholders awoke Wed nesday morning to headlines such as “Apple Loses Some of Its Shine” and then proceeded to lose about $22 billion on paper, as their stock dropped by 5.6 percent.
Shares closed Wednesday at $398.62, down $23.62.
Apple’s numbers didn’t surpass the high bar set by roughly 50 securities analysts who follow the company’s stock. It’s another reminder of how difficult it can be for even the most prosperous companies to please Wall Street quarter after quarter.
“It’s a rough game,” said BGC Financial analyst Colin Gillis. “Apple has been so well for so long that it has gotten itself into a position where it has to set a new (earnings) record every quarter. Now, some of the momentum has been broken.”
Apple issued a jolly outlook for the current quarter, which includes the holiday shopping season. The projections call for earnings and revenue above analysts’ estimates, an anomaly for a company that makes a habit of lowballing its quarterly predictions.
The Oct. 5 death of Apple chief executive Steve Jobs throws a new twist into the equation.
Now that Tim Cook is CEO, analysts must figure out whether the rules of Apple’s expectations game have changed. ISI analyst Brian Marshall thinks that’s unlikely because Peter Oppenheimer, Apple’s chief financial officer for the past seven years, remains in charge of the numbers.
