14 DAY TRIAL // For the past eleven quarters, Apple has been under promising and over delivering, giving cautious guidance on the upcoming quarters. So far, this approach has worked well for the company as it has managed to beat not only its own guidance, but also Street expectations. All that is a thing of the past now, as Apple has announced very high expectations for the upcoming quarter.
For the December quarter, Apple chief financial officer Peter Oppenheimer projected sales and profits of $9.2 billion and about $1.42 per share, while also warning that gross margins might drop to 31 per cent due to rising prices for components. What makes this guidance stand out so much is not the fact that it is less than expected, like in the previous quarters, but rather that it even exceeds Wall Street expectations. Analysts were expecting earnings of $1.39 per share on sales of $8.58 billion and Apple's higher numbers have them both surprised and excited.
When asked about the overly positive outlook, Oppenheimer explained: "I'd give you guidance each quarter that we believe we have a reasonable chance of achieving. Apple has been working incredibly hard for a number of years and now things are just really coming together quite well for us and I couldn't be happier. Apple is shipping the best products that we have ever made in our history. We just eclipsed the record that we set for Mac sales last quarter by $400,000. iPod sales accelerated after the transition and we're shipping the best iPods that we've ever made. And the iPhone is doing really, really well. So we're quite confident in the business and we've exited the September quarter with a lot of momentum."
While Apple has been beating its own projections by quite a wide margin, it seems unlikely that the company will manage the same feat this time. Of course, Apple could very well have quite a few tricks up its sleeves and if there is any truth to recent rumors, especially the ones about new products, the company's actual results could make even these positive projections seem conservative. "We're looking forward to a strong December quarter as we enter the holiday season with Apple's best products ever," said Steve Jobs, Apple's CEO.