Here’s Why AAPL Was Pummelled in After-Hours Trading

Smart article from Bryan Chaffin of The Mac Observer:

Put another way, Apple has been sandbagging its guidance for years, a practice has caught up to the company as analysts and investors alike expected the company to have blowout numbers every quarter. That practice will change going forward. Apple will also present its guidance as a range, rather than a fixed number.

Apple has done this for a couple of quarters now, but they officially announced it during yesterday’s conference call. In a nut, Apple’s guidance has always been low, and investors would bank a bit above that. When the results came in well above what both parties were predicting, the stock rose. Apple is now presenting much more realistic estimates, but analysts are still expecting them to deliver results well above their own guidance. Apparently the most profitable year in corporate history is a little boring.