Apple proves analyst expectations are overrated

Tim Kiladze for the Globe and Mail:

Right after Apple Inc. announced its profits on Tuesday, the first news reports all fixated on just how badly the tech giant missed earnings estimates of $10.37 (U.S.) per share. The main message: this was horrible news. … Analysts shouldn’t be paid to tell us where they think earnings will come in. They should be able to coherently explain what the earnings mean and what to watch out for. They’re in the business of analysis, after all.

Kiladze nails it. After last night’s earnings report, in which Apple exceeded its previous guidance for the quarter, financial reporters quickly noted that Apple missed analyst expectations. But analysts are consistently wrong about Apple’s earnings, so why do we put any stock in these people’s guesses at all?

  • So that they can be missed!

  • mr_lizard13

    I’d hazard a guess that they do it on purpose, in order to drive the stock price down when the results are announced. Then their clients can pick up a ton of cheap stock.

    Let’s not forget that their real and only job is to make their clients money; the tech press should know better than to pay any attention to their ‘guesses’. Analysts aren’t there to provide estimates for the press.