Apple loses a round in expectations game

Associated Press

SAN FRANCISCO

Call it the curse of great expectations.

Apple did just about everything right in its latest quarter. The company increased its profit by more than 50 percent and boosted revenue by nearly 40 percent over the same quarter last year.

It was the second-best three-month period ever posted by the revered maker of the iPhone, iPad and iPod. Even more impressively, Apple pulled it off against a backdrop of economic uncertainty and fears of another recession. But by the sometimes absurd logic of Wall Street, it was a disaster.

Apple Inc.’s shareholders awoke Wednesday morning to headlines such as “Apple Loses Some of Its Shine,” and then proceeded to lose about $22 billion on paper, as their stock dropped by more than 5 percent — because Apple failed to manage the analyst expectations that can make or break a stock.

Apple’s numbers didn’t surpass the high bar set by roughly 50 securities analysts. It’s another reminder of how difficult it can be for even the most prosperous companies to please Wall Street quarter after quarter.