The always-off-the-mark guys have actually cut estimates for Apple's upcoming quarter. Consensus estimates are now $10.33. One analyst actually predicts $9.10 a share! I'm predicting another big miss by the analysts.
So how do you get a better handle on Apple's third quarter?
When it comes to predicting profits, the rear view mirror is far more accurate than relying on the pros.
Take the case of Apple's June quarters. Apple has made more money in its June quarter than in its March quarter for the last 9 years. That's a reliable pattern, one you can use to predict June's numbers accurately. In fact, the March numbers are far better predictors of June than a roomful of analysts.
Take a look. March's numbers are more dependable predictors of June's quarter than analyst consensus.
The March Q2 earnings predict June Q3 earnings better than the best forecaster out there! Slap your March number into your June estimate and presto, you would have beaten the professionals each and every time. The best correlation: In 2009, the June Q3 quarter came within 0.5% of the preceding March Q2 quarter.
Consensus June estimate is $10.33. Apple made $12.30 in the last March quarter. I doubt analyst forecasts will be correct (not to mention breaking a 9-year trend.) Expect the historical pattern to continue: Apple makes at least $12.30 and trounces estimates.
For those who want to see the historical pattern in more depth, here's how the June and March quarters have stacked up over the last 9 years. Analyst estimate for June 2012 is in red.
The chart below shows June earnings as a percentage over March earnings. Analyst expectations (shown in red) are too pessimistic.
The analysts are famous for underestimating Apple's earnings. The upcoming quarter won't be an exception. Let Q2 be your guide: You are unlikely to be disappointed.
Disclosure: I am long AAPL.
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