Jeff Matthews
Apr 27, 20162 min
It’s bad enough
when analysts thank CEOs for letting them ask a question on an company earnings
call, at least when they do it in a way that goes beyond a simple act of politeness and more towards a cringe-making act of fawning, which too many analysts have a way of doing these days.
This is, after
all, a business: it’s an analyst’s job
to ask questions; it’s a CEO’s job to answer them. Get on with it.
What’s worse,
however—much worse—is when an analyst who asks a good question gets schmoozed by
the CEO, and instead of following up and getting an answer, surrenders.
It happened
tonight on the Apple call.
After thanking the
company for “fitting me in” (really?) the analyst asked Tim Cook—all quotes are from the
indispensable Seeking Alpha—a very reasonable question about the “top two
or three things” that had changed from the previous quarter, when Apple’s CEO
was way more bullish about the demand environment for iPhones than it turned
out to be.
Cook’s response
turned the question into a math equation:
“…we
did not contemplate or comprehend that we were going to make a $2 billion-plus
reduction in channel inventory during this quarter. And so if you factor that
in and look at true customer demand, which is the way that we look at it
internally, I think you’ll find a much more reasonable comparison.”
The analyst jumped
on Cook for changing the subject—after all, he said, the fact that you decided
to cut $2 billion out of channel inventory must mean you had $2 billion more
product in the channel than you expected, which means “true customer demand,”
as Cook called it, was $2 billion weaker than plan, right?
Ha! We’re joking.
The analyst did no
such thing. He surrendered. “Okay, great. Thank you,” he said, and then asked a
softball follow-up.
Tim Cook took home
$10.3 million last year. He can handle
tough questions.
Personally, I’d
like to know why Cook—who gets on his high moral horse every time some
politically correct brushfire starts up somewhere in America—gives up without a
sound when the Chinese authorities demand the Apple Store stop carrying apps
involving the Dalai Lama.
We know the
answer: money.
Still, it would be
fun to ask.
But don’t hold your breath.
Jeff Matthews
I Am Not Making This Up
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