Will Apple Miss a Beat?
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Apple (NASDAQ: AAPL), reports after the closing bell, Tuesday, April 24, 2012, which means those with strong Mayan heritage have been screaming from rooftops that the end is near. I have seen so many pieces with regards to how this is “it” for Apple, Netflix (NASDAQ: NFLX), et al; you would think that there was a special place to trade these stocks. The Amityville Exchange, maybe The Last Market on the Left, or the Poseidon Pink Sheets.
So while some of you peruse the painful overabundance of market meltdown madness from every single Chicken Little, tricking you into reading last year’s rehash of coverage on an earning’s miss, let’s all just take a deep breath and relax. I understand if we stretch the timeline out far enough, we all reach zero, but the Doomsday Clock should be viewed with an open mind and a skeptical eye. Can anyone honestly tell me that Apple is anywhere near the edge of the cliff? Think about it for a few seconds. Seriously, we can’t even get rid of Blockbuster, for crying out loud (thanks to DISH). Even Eastman Kodak still has a pulse on the pink sheets, so before we go reading every stock market rapture prophecy piece, season your reading material with a few grains of salt.
Apple has enjoyed a fabulous run since the company’s last earnings miss, but since AT&T (NYSE: T), reported disappointing numbers, it’s definitely soured somewhat because apparently nobody is buying iPhones or iPads from Mr. T. Depending on your style, I look at Apple as more of an investment and choose not to trade the stock in a range. But even if the company misses earnings estimates of $9.95 per share, or revenue above $36B, or both, since it’s an investment, I won’t treat it like an Alanis Morissette man-hating song of unrequited love. Listen to it for a quarter, move on to the next.
Much the same is being spoken with regards to Netflix. Yes, I know, I mentioned it as one of those holdings to avoid (“Is Something Burning”), even a day after the takeover rumors started swirling (“Netflix: Calling All Chivalrous Knights”). And don’t look now, but even after reporting a first quarter earnings beat, shares are down over 13% (intraday, 4/24/12). But depending on the company, these calls offer moments of clarity and we should look at them as either a potential opportunity, perhaps a time to practice patience, or pack your bags and move out of the Amityville horror. An Apple miss, potential opportunity, Netflix miss, yikes. But even Netflix isn’t dead just yet.
While some of us still enjoy a bit of Apple with our holdings, don’t be surprised if earnings per share come in at $10, or higher. And you shouldn’t be concerned to the point of running for cover if it “misses”, either. The economy is still experiencing growing pains, and provided you aren’t trading the stock, I still think it’s a wise investment, especially if we ever hit a growth spurt (maybe 2013?).
Motley Fool blogger Kyle Metivier has a long position with Apple and has been adding on price dips. He owns no shares with any other company mentioned.