Apple Inc.(NASDAQ:AAPL)’s weak outlook for the holiday quarter has had analysts scramble again to do more permutations and combinations on their excel sheets.
While by any other standards, Apple's guidance for the December quarter would be seen as record revenues for a tech company, since it is Apple it has to conform to a different set of standards.
For the December quarter, Apple forecast revenue of $52 billion, below estimates of $55 billion, according to Thomson Reuters I/B/E/S. It expects margins of 36 percent, far lower than analysts' expectations of 43 percent.
Evercore lowered the price target of the stock to $775 from $800, Raymond James cuts the price target to $700 from $730 while Nomura also lowered its target to $660 from $710.
Almost all analysts have preferred to focus on the fall in gross margin, which Apple itself said would happen due to the large number of products it recently launched.
The products cost money and as company executives pointed out it had not compromised on the quality of its devices.
"The iPhone 5, iPod Touch, iPod Nano, iPad mini and iMac all feature new form factors and our checks with the supply chain indicate that many of these are very complex to manufacture and are likely resulting in reduced production efficiencies," Nomura analysts said in a note as they lowered their price target to $660 from $710.
Apple, apart from introducing the iPad Mini, has refreshed almost all its devices including a full-sized iPad, which comes just six months after the launch of the iPad 3.
Most of the analysts however expect gross margins to recover by June next year as rising volumes are expected to offset the higher costs of manufacturing.