Ben S.

Why I'm Shorting Apple Ahead of Earnings

POST EARNINGS:

EPS
1.19 vs 1.08 - realize that GM of 34.8 included a one time 70 bps contribution SO at GM of 34.1 (only 40 bps above projection) EPS would have been 1.14.

iPod
11 mil vs 10.1 - I'll admit unit sales were much higher than I expected but ASP declined significantly enough for iPod rev to fall 8% year over year.

Mac
25 mil vs 24 mil - Pretty much in line with my prediction.

Rev
7.46 vs 7.51 - Will be tough to find anyone closer than this.

Emotions
Well a lot of you have sealed this for me.

My summarizing statement was:

"Apple will beat their $1.00 in EPS and they just might beat my 1.08 EPS but the stock will get beaten down based on the specifics of their earnings, the non-rational emotional high that a lot of Apple investors are on with the 3G iPhone, and guidance that, while a bit more aggressive than in the past, is still considerably lower than the street."

I'd say it was pretty on par.

No need to call anyone out, we all get it wrong sometimes, I really appreciate those who gave constructive criticism and helped guide my estimates, to those who didn't, I'd advise it in the future.

Thanks