APPLE Jumped, FinanceTwitter Jumped

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Jul 26 2007
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You could be wondering why FinanceTwitter was not updated since I blogged about APPLE Should Beats Earning but Other Number Counts, that’s one day ago. In actual fact, I was re-researching Apple stock and could only find optimistic data that point to Apple will definitely beats earning. I’ve to admit I was quite nervous if Apple will join Google’s party. After the earning announcement, I jumped in joy, not too much on the news that it indeed beaten the earning estimate again but because the new set of numbers indicating the iPhone sold is double of what reported by AT&T Inc. (NYSE: T, stock) earlier.

Apple Inc.’s fiscal third-quarter profit soared more than 73 percent and it sold 270,000 iPhones in the first two days on the market. That’s the headline which sent Apple stock up by more than 9 percent ($12.92 in extended trading hour), enough to send short-sellers to cover their shorts when the trading starts on Thursday. Although the iPhone figure didn’t contribute to the earning announced, it simply means Apple future earning can depends on iPhone to bring in cash into the coffers.

As reported by AP and most of the financial news, it’s a well-known fact that Steve “always” issues a conservative outlook that fell short of Wall Street’s expectations during the earning announcement. So most investors just smiled and sent the stock skyrocket at the same time.

For the quarter ended June 30, Apple’s profit rose to $818 million, or 92 cents per share, up from $472 million, or 54 cents a share in the year-ago quarter – easily beats the estimate of $0.72 per share by Thompson Financial. Sales grew to $5.41 billion from $4.37 billion last year against estimate of $5.28 billion. The conservative figures from Apple itself were projected earnings of 66 cents per share on quarterly sales of $5.1 billion.

Steve Jobs said “We’re thrilled to report the highest June quarter revenue and profit in Apple’s history, along with the highest quarterly Mac sales ever … iPhone is off to a great start … We hope to sell our one-millionth iPhone by the end of its first full quarter of sales … and our new product pipeline is very strong”.

The company said it shipped a record 1.76 million Macs, up 33 percent from the year-ago period, accounting for $2.5 billion, or more than 60 percent of the quarter’s revenues. Unit sales of iPods increased by 21 percent from last year to 9.8 million and generated $1.57 billion in revenue. You should wait and see the numbers when Apple announce the iPhone sales in the next subsequent quarter.
The reason for the discrepancy between Apple’s and AT&T’s numbers on iPhone sales was unclear and the only reason raised at this moment is the service activation problems. There was initially some disappointment in the 270,000 iPhone units, but as people realized the gross margins came in at 37 percent, they were very encouraged by the profitability of the company as can be seen with the Apple stock price’s reaction during the extended hours.

Before Apple’s results were announced, its shares rosed $2.37, or 1.8 percent, to close at $137.26. Then in a heavy-volume trading after hours, shares fell as much as 6 percent before they rose more than 9 percent to $150.18. What can you learn from these 3 lines of information? DO NOT trade during extended hours, period. Extended hours are not designed for small investors to trade the stocks (option trading stops completely at 4:00pm) in the hope of making money. You should work as a professional investor in the U.S. to know what I meant. These market makers made transactions faster than you can blink your eyes during this hour, trading against the opposite side of the market makers. So, you small boys or girls should just grab a cup of coffee and sit there watching the show.

# TIP: Do not trade stocks during extended hours, it’s not for you.

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