AAPL FQ 2 ‘09 Estimates

  • Posted: 23 March 2009 06:38 AM

    Here are my preliminary estimates:

    Unit Data:
    2.45 Million Macs @ $1,400 ASP = $3.43 Billion
    10.5 Million iPods @ $145 ASP = $1.523 Billion
    iPhone 3 Million ($660 ASP) = $1.500 Billion
    iTunes: $920 Million
    Software: $575 Million
    Hardware: $370 Million
    Revenue: $8.318 Billion

    Q209 Income Statement (in millions):
    Revenue: $8,318
    Cogs: $5,490
    GM: $2,828
    OpEx: $1,370
    OpIn: $1,458
    OI&E: $85
    Net, Taxes: $1,543
    Taxes: $463
    Net Income: $1,080
    Shares: 905
    EPS: $1.19


    FY09 Income Statement (in Millions):
    Revenue: $36,591
    Cogs: $23,999
    GM: $12,592
    OpEx: $5,696
    OpIn: $6,896
    OI&E: $523
    Net, Before Taxes: $7,419
    Taxes: $2,193
    Net Income: $5,226
    Shares: 904
    EPS: $5.78

         
  • Posted: 23 March 2009 05:13 PM #1

    andyzaky - 23 March 2009 09:38 AM

    iPhone 3 Million ($660 ASP) = $1.500 Billion

    Is this a mistake?

         
  • Posted: 23 March 2009 05:21 PM #2

    nrabinov - 23 March 2009 08:13 PM
    andyzaky - 23 March 2009 09:38 AM

    iPhone 3 Million ($660 ASP) = $1.500 Billion

    Is this a mistake?

    No.  But let me clarify this a bit.  The $660 is the ASP I’m estimating for each iPhone sold.  Yet, the $1.5 billion in sales is drawn from the amount I anticipate Apple will recognize as a result of its amortization of the iPhone.  Its the sum of the portion of Apple’s already piled up deferred revenue and the amount of the appropriate deferred revenue contribution drawn from the current period. 

    The reason I state it as its stated above is because almost everyone knows that Apple defers its iPhone revenue and it is only intended to be informative rather than a computation.

         
  • Posted: 23 March 2009 05:32 PM #3

    andyzaky - 23 March 2009 08:21 PM
    nrabinov - 23 March 2009 08:13 PM
    andyzaky - 23 March 2009 09:38 AM

    iPhone 3 Million ($660 ASP) = $1.500 Billion

    Is this a mistake?

    No.  But let me clarify this a bit.  The $660 is the ASP I’m estimating for each iPhone sold.  Yet, the $1.5 billion in sales is drawn from the amount I anticipate Apple will recognize as a result of its amortization of the iPhone.  Its the sum of the portion of Apple’s already piled up deferred revenue and the amount of the appropriate deferred revenue contribution drawn from the current period. 

    The reason I state it as its stated above is because almost everyone knows that Apple defers its iPhone revenue and it is only intended to be informative rather than a computation.

    That’s what I thought. I didn’t see the words “non GAAP” anywhere in your post, so I wasn’t sure.

    In your opinion, is a 10-20 cent beat of street estimates going to be good or not so good w.r.t. street expectations? Last quarter Apple blew the street away with a near 40 cent beat. Is this going to be enough this quarter?

         
  • Posted: 23 March 2009 06:50 PM #4

    nrabinov - 23 March 2009 08:32 PM
    andyzaky - 23 March 2009 08:21 PM
    nrabinov - 23 March 2009 08:13 PM
    andyzaky - 23 March 2009 09:38 AM

    iPhone 3 Million ($660 ASP) = $1.500 Billion

    Is this a mistake?

    No.  But let me clarify this a bit.  The $660 is the ASP I’m estimating for each iPhone sold.  Yet, the $1.5 billion in sales is drawn from the amount I anticipate Apple will recognize as a result of its amortization of the iPhone.  Its the sum of the portion of Apple’s already piled up deferred revenue and the amount of the appropriate deferred revenue contribution drawn from the current period. 

    The reason I state it as its stated above is because almost everyone knows that Apple defers its iPhone revenue and it is only intended to be informative rather than a computation.

    That’s what I thought. I didn’t see the words “non GAAP” anywhere in your post, so I wasn’t sure.

    In your opinion, is a 10-20 cent beat of street estimates going to be good or not so good w.r.t. street expectations? Last quarter Apple blew the street away with a near 40 cent beat. Is this going to be enough this quarter?

    Its too early to tell and if anyone tells you differently, then they’re full of it.  It all depends on the circumstances in the market at the time of earnings.  If companies are going up on misses and near beats, then ya, it will probably be somewhat positive.  But if the other tech firms are struggling to rise on earnings reports or if the market is in a downward spiral, then it might be negative.  It all depends on the circumstances at the time of the report and even the market sentiment to some degree on earnings day. 

    I am no longer bullish on Apple’s fundamentals, yet I think the stock might react in a patently different way than indicated by the fundamentals.  Growth rate this year is going to be terrible and unless we see major inroads with regard to iPhone growth, Apple might be done as a growth firm.  Last year, the company’s growth was driven almost exclusively by massive market share gains in its computer segment.  Yet, this year we see that slowing down quite dramatically and the iPhone is going to have to pick up where Apple’s computer growth has left off.

         
  • Avatar

    Posted: 23 March 2009 07:03 PM #5

    andyzaky - 23 March 2009 09:50 PM

    Growth rate this year is going to be terrible and unless we see major inroads with regard to iPhone growth, Apple might be done as a growth firm.

    Andy, with all due respect, this sounds like all the idiots promising Apple’s death during the last two decades.

    What makes you think people won’t buy PCs anymore, even once the recession is behind us? Or, do you think their PC of choice will remain a Windows machine?

         
  • Posted: 23 March 2009 07:05 PM #6

    Apple might be done as a growth firm.

    Yeah and Obama is a Reagan conservative. If pc and cell phone and platform growth occur who is better positioned to capture more of it?

    If there is no industry growth, Apple will continue to gain share of remaining customer base. Again who will out perform?

         
  • Posted: 23 March 2009 07:15 PM #7

    deagol - 23 March 2009 10:03 PM
    andyzaky - 23 March 2009 09:50 PM

    Growth rate this year is going to be terrible and unless we see major inroads with regard to iPhone growth, Apple might be done as a growth firm.

    Andy, with all due respect, this sounds like all the idiots promising Apple’s death during the last two decades.

    What makes you think people won’t buy PCs anymore, even once the recession is behind us? Or, do you think their PC of choice will remain a Windows machine?

    I guess I should also say that I’m not bearish either.  Just agnostic at to the fundamentals.  Yet, I do think that the shares can rally and rally hard despite my current stance on the company’s financials.  I’m agnostic precisely because its difficult to tell just how much of the falloff of Apple’s computer growth is a result of weakness in the economy and just how much of that falloff is the result of a slowing of the inherent growth rate.  Meaning, all things being equal, without a recession, is the growth rate slowing?  I don’t know the answer to that question.  Ya.  Sure.  It definitely may be the case that Apple could be selling 3 million+ computers per quarter post recession.  In which case I would become bullish on Apple’s fundamentals.  What I need to see is evidence that suggests that he slowdown in Apple’s computer sales growth is largely the result of this recession and that such computer growth will once again be explosive after this financial crisis is behind us.  I’m neither bearish nor bullish, just agnostic.  Yet, as to Apple’s shares, I still think the best way to approach it is to take core long term position in the $80’s and short-term trade the volatility with another position.  I stand by my “strong buy” rating under $90 and buy rating anywhere between $90 and $100.  No comment for anything above $100 and a sell anywhere near $170.

         
  • Posted: 23 March 2009 07:26 PM #8

    andyzaky - 23 March 2009 09:50 PM
    nrabinov - 23 March 2009 08:32 PM
    andyzaky - 23 March 2009 08:21 PM
    nrabinov - 23 March 2009 08:13 PM
    andyzaky - 23 March 2009 09:38 AM

    iPhone 3 Million ($660 ASP) = $1.500 Billion

    Is this a mistake?

    No.  But let me clarify this a bit.  The $660 is the ASP I’m estimating for each iPhone sold.  Yet, the $1.5 billion in sales is drawn from the amount I anticipate Apple will recognize as a result of its amortization of the iPhone.  Its the sum of the portion of Apple’s already piled up deferred revenue and the amount of the appropriate deferred revenue contribution drawn from the current period. 

    The reason I state it as its stated above is because almost everyone knows that Apple defers its iPhone revenue and it is only intended to be informative rather than a computation.

    That’s what I thought. I didn’t see the words “non GAAP” anywhere in your post, so I wasn’t sure.

    In your opinion, is a 10-20 cent beat of street estimates going to be good or not so good w.r.t. street expectations? Last quarter Apple blew the street away with a near 40 cent beat. Is this going to be enough this quarter?

    Its too early to tell and if anyone tells you differently, then they’re full of it.  It all depends on the circumstances in the market at the time of earnings.  If companies are going up on misses and near beats, then ya, it will probably be somewhat positive.  But if the other tech firms are struggling to rise on earnings reports or if the market is in a downward spiral, then it might be negative.  It all depends on the circumstances at the time of the report and even the market sentiment to some degree on earnings day. 

    I am no longer bullish on Apple’s fundamentals, yet I think the stock might react in a patently different way than indicated by the fundamentals.  Growth rate this year is going to be terrible and unless we see major inroads with regard to iPhone growth, Apple might be done as a growth firm.  Last year, the company’s growth was driven almost exclusively by massive market share gains in its computer segment.  Yet, this year we see that slowing down quite dramatically and the iPhone is going to have to pick up where Apple’s computer growth has left off.

    I think you’re wrong about this: I think we’ve only scratched the surface in terms of iPhone market share. If Apple comes out in June with a new game-changing iPhone, we just might see a brand new pop in Apple stock; iPod touch sold 30 million units in a little over half a year; new iPod shuffle talker will probably outsell the old one; Snow Leopard will probably drive up Mac sales by some decent percentage points; and we still haven’t seen Apple’s answer to the netbook.

    Look at it this way Andy - all Apple has to do in order to add 10-20% to its stock is bring Steve Jobs back in the summer. The stock will climb 15% just on that news alone. Granted, SJ might be on life support right now for all we know, but then again…

    I’m with Deagol on this. You sound overly pessimistic on Apple for some reason.

         
  • Posted: 23 March 2009 07:39 PM #9

    nrabinov - 23 March 2009 10:26 PM
    andyzaky - 23 March 2009 09:50 PM
    nrabinov - 23 March 2009 08:32 PM
    andyzaky - 23 March 2009 08:21 PM
    nrabinov - 23 March 2009 08:13 PM
    andyzaky - 23 March 2009 09:38 AM

    iPhone 3 Million ($660 ASP) = $1.500 Billion

    Is this a mistake?

    No.  But let me clarify this a bit.  The $660 is the ASP I’m estimating for each iPhone sold.  Yet, the $1.5 billion in sales is drawn from the amount I anticipate Apple will recognize as a result of its amortization of the iPhone.  Its the sum of the portion of Apple’s already piled up deferred revenue and the amount of the appropriate deferred revenue contribution drawn from the current period. 

    The reason I state it as its stated above is because almost everyone knows that Apple defers its iPhone revenue and it is only intended to be informative rather than a computation.

    That’s what I thought. I didn’t see the words “non GAAP” anywhere in your post, so I wasn’t sure.

    In your opinion, is a 10-20 cent beat of street estimates going to be good or not so good w.r.t. street expectations? Last quarter Apple blew the street away with a near 40 cent beat. Is this going to be enough this quarter?

    Its too early to tell and if anyone tells you differently, then they’re full of it.  It all depends on the circumstances in the market at the time of earnings.  If companies are going up on misses and near beats, then ya, it will probably be somewhat positive.  But if the other tech firms are struggling to rise on earnings reports or if the market is in a downward spiral, then it might be negative.  It all depends on the circumstances at the time of the report and even the market sentiment to some degree on earnings day. 

    I am no longer bullish on Apple’s fundamentals, yet I think the stock might react in a patently different way than indicated by the fundamentals.  Growth rate this year is going to be terrible and unless we see major inroads with regard to iPhone growth, Apple might be done as a growth firm.  Last year, the company’s growth was driven almost exclusively by massive market share gains in its computer segment.  Yet, this year we see that slowing down quite dramatically and the iPhone is going to have to pick up where Apple’s computer growth has left off.

    I think you’re wrong about this: I think we’ve only scratched the surface in terms of iPhone market share. If Apple comes out in June with a new game-changing iPhone, we just might see a brand new pop in Apple stock; iPod touch sold 30 million units in a little over half a year; new iPod shuffle talker will probably outsell the old one; Snow Leopard will probably drive up Mac sales by some decent percentage points; and we still haven’t seen Apple’s answer to the netbook.

    Look at it this way Andy - all Apple has to do in order to add 10-20% to its stock is bring Steve Jobs back in the summer. The stock will climb 15% just on that news alone. Granted, SJ might be on life support right now for all we know, but then again…

    I’m with Deagol on this. You sound overly pessimistic on Apple for some reason.

    I’m neither pessimistic, cynical or skeptical with regard to Apple.  I’m just agnostic.  I thin the potential for the iPhone is tremendous and mind boggling to be honest.  For me, I just want to know that this slowdown is largely the result of the economy and not due to some inherent slowdown within the company’s operating segments itself.  I’m sorry if I’m coming off pessimistic.  But I really am not.  In fact, I’m holding nearly $2 million worth of Apple right now.

         
  • Posted: 23 March 2009 08:20 PM #10

    andyzaky - 23 March 2009 10:39 PM

    I’m neither pessimistic, cynical or skeptical with regard to Apple.  I’m just agnostic.  I thin the potential for the iPhone is tremendous and mind boggling to be honest.  For me, I just want to know that this slowdown is largely the result of the economy and not due to some inherent slowdown within the company’s operating segments itself.  I’m sorry if I’m coming off pessimistic.  But I really am not.  In fact, I’m holding nearly $2 million worth of Apple right now.

    andy-Do you think we have seen the bottom for aapl?  I’m not sure as there are lots of talks of testing the recent lows.  Thanks.

         
  • Posted: 23 March 2009 08:21 PM #11

    andy-Would you mind sharing how you are trading aapl currently?  Trading shares?  Options?  Thanks.

         
  • Posted: 23 March 2009 08:56 PM #12

    alice - 23 March 2009 11:20 PM
    andyzaky - 23 March 2009 10:39 PM

    I’m neither pessimistic, cynical or skeptical with regard to Apple.  I’m just agnostic.  I thin the potential for the iPhone is tremendous and mind boggling to be honest.  For me, I just want to know that this slowdown is largely the result of the economy and not due to some inherent slowdown within the company’s operating segments itself.  I’m sorry if I’m coming off pessimistic.  But I really am not.  In fact, I’m holding nearly $2 million worth of Apple right now.

    andy-Do you think we have seen the bottom for aapl?  I’m not sure as there are lots of talks of testing the recent lows.  Thanks.

    Ya.  I do think we have bottomed.  While we might make a new low, it would certainly not be much lower than the current low.  So in that sense, I firmly believe we’ve bottomed.

         
  • Posted: 23 March 2009 09:03 PM #13

    alice - 23 March 2009 11:21 PM

    andy-Would you mind sharing how you are trading aapl currently?  Trading shares?  Options?  Thanks.

    I take rather large share and options positions.  Over the past 4 months I’ve taken positions in the low $80’s and have dumped those position when Apple would fail to break $104 which was a major resistance point on a technical basis.  I would hold to $103 and put my stop losses at just under $100 which was suggestive of the fact that it was likely going back down.  The last trade to $103 was extremely easy because I knew they would eventual fill the earnings GAP.  This current trade from the low $80’s is rather difficult because it has broken out of its main level of resistance at $103.  Yet, the breakout today was rather unconvincing due to the decidedly anemic volume.  On breakouts, you want to see them happen on high volume.  That didn’t happen today.  Now I’m playing it by ear.  But if I see if fall under $100, then there’s a strong chance I’ll sell.  Yet, It all depends on market technicals as well.  So right now, I’m just watching it very closely.  There is a huge GAP that Apple needs to fill between $119 and $128.  So if it approaches the $119 level, then we’ll see some major resistance.  Also, there will be some ample resistance at THe $116 level as it failed to break that level in October when it tried to rebound out of the congress-bailout fail collapse.  I usually hold 10,000 shares but will leverage up to 25,000 shares on inter-day trades.  I also trade about 200 2011 $100 Call options.

         
  • Posted: 25 March 2009 01:01 PM #14

    nrabinov - 23 March 2009 10:26 PM

    I think you’re wrong about this: . .  iPod touch sold 30 million units in a little over half a year;  . . ..

    Just a small point,  wasn’t the 30M unit figure referring to the combination of the 17M iPhone sales and 13 M iPod Touchs— not just the touches themselves?

         
  • Posted: 25 March 2009 01:29 PM #15

    gusman - 25 March 2009 04:01 PM
    nrabinov - 23 March 2009 10:26 PM

    I think you’re wrong about this: . .  iPod touch sold 30 million units in a little over half a year;  . . ..

    Just a small point,  wasn’t the 30M unit figure referring to the combination of the 17M iPhone sales and 13 M iPod Touchs— not just the touches themselves?

    Yes, you’re right. My mistake.