Yesterday was not a good day for many companies, and Wall Street was feeling the impacts of companies missing their expected sales and earnings reports.
On Tuesday, April 26, Apple sales fell for the first time since 2003, and missed analyst estimate earnings per share (EPS) by nine cents and revenue by $1.4 billion. This then caused the stock to drop over eight dollars per share.
Chipotle was another company which missed its estimated earnings, and the stock fell over $20 per share in post-day trading.
This was expected by many people, and even though their sales are not anticipated to perform well over the next year or two, it still did not stop the stock from sliding due to the bad news.
Twitter was another stock which missed analyst estimates for revenue by seven million and as a result, the stock fell over 13 percent after hours.
Companies tend to release this information after trading hours, so all the losses the companies have incurred in stock price have actually not taken full effect until the market opens tomorrow at 9:30 a.m.
It is clear to see that Wall Street and everyday traders put a large value on the analyst estimates, and just as easily as stocks can fall from missing estimates, so they too can post great returns when they beat the estimates.
Twitter and Chipotle might be hurting for a few more quarters to come, but I wouldn’t worry about Apple for more than one more quarter.
By the time the next iPhone releases, when some of us come back to school in the fall and the rest of graduating seniors are off in the real world, I expect Apple to return to dominance like they always do.
