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Time, Fortune

How Apple Just Lost $60 Billion in Three Minutes

Jul 22, 2015  •  Post A Comment

Even as Apple’s quarterly revenues grew by 33% and profits surged 38% to $10.7 billion, the company lost more than $60 billion in market value during a three-minute span Tuesday, Time magazine reports.

The reason? According to Time, it’s all about expectations.

“Apple is perhaps a victim of its own success,” Time reports. “It routinely beat earnings estimates over the last four quarters, setting high expectations this time for another rout.”

The piece notes that after Apple reported its earnings, The Wall Street Journal ran the headline “Apple iPhone Sales, Up 35%, Disappoint Investors,” while The New York Times went with “Apple Profit Up 38%, but iPhone Sales Disappoint Wall Street.”

All that disappointment triggered a selloff.

Time explains: “Apple missed the mark on its closely watched iPhone sales. The 47.5 million units it sold, while still a third quarter record, was below the estimate of around 50 million units. And while iPhone sales grew by 35%, that figure was down from the 40% growth in the previous quarter and the 46% growth two quarters earlier. Apple’s own forward-looking revenue projections, too, came in below Wall Street expectations — hence the bad vibes after Tuesday’s earnings report.”

Here’s a clip from Fortune magazine about the history of the iPhone:

2 Comments

  1. If you want to make money, you can do it every quarter on the day Apple reports. Every quarter the stock goes up immediately after they report and very shortly thereafter tanks. As soon as it goes up, either take your profits immediately if you own stocks or sell it short, if you don’t. Either way you can make a profit. This roller coaster action has repeated itself every recent quarter. Basically, the “experts” tend to overestimate the amount of iphone sales and when Apple doesn’t meet the “experts” inaccurate estimates, the stock tanks. Iphone sales only went up 35%. Shame on Apple. They really messed up. Every other cell phone manufacturer would probably think they died and went to heaven to have their phone sales “only” go up 35%.

    • One might almost suspect the experts have a vested interest in deliberately overestimating their forecasts, not by enough to look suspicious to regulators but enough for a certain set on investors to make a nice profit…

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