Breakout

Apple Earnings Miss Leads to Huge Buying Opportunity Says Schoenberger

Jeff Macke
Breakout

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Apple (AAPL) surprised investors last night by missing earnings for the quarter just past and providing guidance for the current quarter that is well below analyst estimates. Apple blamed the global economy for some of the miss but also said expectations for a new iPhone5 were hindering sales of the current model.

If Apple's earnings were unexpected, then the conference call was surreal. Despite evidence of new product rumors hurting the existing business, Apple gave no information regarding the release of the iPhone5, a smaller iPad or possible existence of Apple TV. CEO Tim Cook said he's glad people want the next generation devices but has no plans to "put any energy into trying to get people to stop speculating."

At any company other than Apple, Cook blithely refusing to give so much as a hint regarding the pipeline would be horrifying. The results were objectively solid but worse than expected, competitors are leapfrogging the current iPhone and Apple's strategy is to coast on reputation. Cook is taking his customers for granted, assuming they'll hold off buying a Samsung Galaxy S3 in favor of waiting for Apple to give them so much as a release date.

"This is a company that likes to create a buzz," says Todd Schoenberger, managing principal of The BlackBay Group. "Unfortunately that probably backfired on them right now because every is waiting for these sensational products but they don't have a delivery date."

Schoenberger ticks through his other concerns. Domestic sales have been soft for two straight quarters, emerging markets are soft, and Apple's (alleged) move into smaller iPads is an atypical effort to follow competitors into a market. No doubt these headwinds have him cautious about the stock, right?

No way!

"I would go long now and I'd put leverage on it," he all but shouts in the attached video. "Buy it now, $800 in one year. Hold me to it!" We will, Todd. We will.

Please answer our poll question below: Will Apple end the year above or below $600 a share?

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