Both Apple and Netflix released their quarterly results recently and the one thing they had in common is that both companies’ quarterly statements were not received favorably by Wall Street. As potential customers held off buying Apple products this quarter in the expectation of the release of a new device in the next quarter, towards the holiday season, the company’s shares fell by 5% while Netflix, despite gaining 530,000 subscribers and streaming over 1 billion hours of movies and television, faced skepticism, probably because investors are trying to hold the shares from booming.
Predictions and expectations for Apple were quite high to start off with and while the iPad reached its expectations, analysts were not too happy with the figures of the iPhone. It was expected that the iPhone sales would cross 30 million but the actual figure was around 26 million. This is nothing new for the device as the same trend was seen last year, when the iPhone 4S was supposed to be released. Some analysts attribute the dwindling sales to the release of Samsung smartphones. However, it appears that Wall Street is very demanding of Apple and anything short of exceeding expectations is going face disapproval. Though the iPhone sales may have fallen slightly below expectations, Apple continues to dominate the tablet market which it virtually invented.
Netflix too, faced a similar reception on Wall Street but this was because of the company’s own statements sometime back. It stated that the streamed content would amount to around 3 billion hours though 1 billion hours was the right estimation; this shortfall made investors skeptical about the entire company. Subscriber numbers were as expected and it appears that Netflix is continuously growing and dominating the business. The only downside this quarter is that the guidance is going to be lesser and investors might be trying to keep the stock price low by jumping it. Ideally, the company should forecast more realistic results on the next quarter and keep expectations in check.
It appears that the next quarter is going to be fruitful for both Apple and Netflix as the former is in all probability going to release something new and the latter will see a huge increase in its subscriber base. It will be interesting to see how investors of both companies are going to respond.
