I hope you are right on the 4Q Beat. I listened to the 3Q earnings call a few days ago. Andrus was asked about 2 things that he responded without reservation and positive to.
1) he was asked about SKU shelf space and replied that they have seen no drop (although a trip to my local Best Buy before Christmas shocked me with Beats being everywhere from the checkout isle to 3 other spots in the store. Gives me a queasy feeling)
2) his estimate for Gross Margin was "mid 40's" in regards to potential impact of shift to over ear. They are at 47-48 now. Maybe my math is wrong, but that doesn't translate to a a 10% drop in EPS!
He also used the wording "they are conservative" in there estimates.
They mentioned Hurricane Sandy "potential" impact several times. I wonder if that was a made up excuse to justify the decrease in estimate.
They also (they meaning Andrus and Wescoat) babbled on how they had no idea what 2013 will bring... Not even a general range which I find kinda suspicious as well. Wescoat just said we haven't started budgets or 2013 yet... They will bring them to the table during the q4 call.
Also, despite what others keep saying, Andrus has more then halved his monthly stock sale... That is a clue as well and Wescoat got 4 years of stock grants starting next fall, I wonder if those are booked at the lower share price, thus not effecting EPS as much?
We will never know and it is very common for CEO's to sandbag... Legal or not.
So you wanted to be tortured again and listened to the call one more time? More power to you. I was actually remembering margins were estimated at mid/high 40s, which to me is 47. Anythink 45 and higher is solid in my opinion with the assumption that gross sales continue to increase by more than the margin loss, which I think is very likely.
Andrus noted last week that barriers to entry are increasing, so it's about weathering the storm until it;s down to 5 or so companies.