Apple Earnings? Don't Ask The Pros - Look In The Rear View Mirror

| About: Apple Inc. (AAPL)
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What will Apple (AAPL) earn in the upcoming quarter? Don't ask the analysts: They haven't been right in years. Apple has beaten consensus estimates 25 out of the last 26 quarters, usually handily.

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.

Additional disclosure: Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.