AAPL June Quarter Earnings

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    Posted: 20 July 2010 10:01 PM #31

    roni - 20 July 2010 11:58 PM

    I am pretty pleased.  Bought some July 23 $260’s for $1.65 this morning.  Reckon I will sell them at the open tomorrow morning.

    It is going according to plan my friends, according to plan.

    I would like to own Jul calls too :wink:.

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  • Posted: 20 July 2010 10:07 PM #32

    Mercel - 20 July 2010 11:08 PM
    artman1033 - 20 July 2010 10:50 PM

    EPS=$3.51 per diluted share.

    909,938,000 diluted shares.

    Looking ahead, will be offering free cases to customers who have purchased iPhone 4. As a result, will be deferring revenue for value of those cases—about $175 million—which will be recognized in the December quarter. Will recognize the cost of the cases as we deliver them to customers.

    SO, the 175,000,000 added BACK into earnings WOULD have added .19 to the total = $3.70 expected Whisper earnings.

    How is my math.

    The $175M is for cases expected to be “sold” through Sept. 30, so there’s only a partial add-back to Q3.  $175M / $30 = 5.8M cases.  I think this is a pretty decent estimate.  Here’s a WAG:  If Apple assumes 70% of iPhone 4 customers claim reimbursement or get a free case, then Apple is estimating 8M iPhone 4 units sold through Qtr 4 end Sept. 30?

    The $175M is for iPhone4 and not for cases. This is mentioned at 5:42 during the conference call. This makes more sense as if the cases are to be given free how can there be any revenue associated with the cases. There has to be an expense and not revenue.

         
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    Posted: 20 July 2010 10:12 PM #33

    Thank You Apple,  once again.  grin

    :apple:

         
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    Posted: 20 July 2010 11:03 PM #34

    All told, a very nice quarter from Apple.  With ttm P/E down to around 18.5 (!), AAPL’s looking more and more like a “value” stock. 

    $18 billion forecast for fiscal Q4 is astonishing.  EPS of $4.00 or so is definitely possible with that level of revs (which is probably sandbagged as usual).  Are we possibly looking at a $20 billion holiday quarter?

    We’ll see what happens tomorrow morning.

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  • Posted: 20 July 2010 11:39 PM #35

    MacOz - 21 July 2010 01:07 AM

    Looking ahead, will be offering free cases to customers who have purchased iPhone 4. As a result, will be deferring revenue for value of those cases—about $175 million—which will be recognized in the December quarter. Will recognize the cost of the cases as we deliver them to customers.


    The $175M is for iPhone4 and not for cases. This is mentioned at 5:42 during the conference call. This makes more sense as if the cases are to be given free how can there be any revenue associated with the cases. There has to be an expense and not revenue.

    I’ll listen to the conference call (I didn’t get your link to work), but the description above pulls the value of the cases (not iPhone) out of revenue.  It’s a liability, not revenue.  As the cases are released to customers, they’re expensed.  As reimbursements and/or payments are made, the liability is released.  Apple may intend something different, but that would be inconsistent with the original post above.

         
  • Posted: 21 July 2010 12:27 AM #36

    Mercel - 21 July 2010 02:39 AM
    MacOz - 21 July 2010 01:07 AM

    Looking ahead, will be offering free cases to customers who have purchased iPhone 4. As a result, will be deferring revenue for value of those cases—about $175 million—which will be recognized in the December quarter. Will recognize the cost of the cases as we deliver them to customers.


    The $175M is for iPhone4 and not for cases. This is mentioned at 5:42 during the conference call. This makes more sense as if the cases are to be given free how can there be any revenue associated with the cases. There has to be an expense and not revenue.

    I’ll listen to the conference call (I didn’t get your link to work), but the description above pulls the value of the cases (not iPhone) out of revenue.  It’s a liability, not revenue.  As the cases are released to customers, they’re expensed.  As reimbursements and/or payments are made, the liability is released.  Apple may intend something different, but that would be inconsistent with the original post above.

    See this link and at 5:42. Other sites also mention it: http://www.businessinsider.com/apple-earnings-analysis-2010-7#ixzz0uFyr69tk

    Deferred revenue is revenue that is recognised over time. Remember the original accounting treatment for iPhones? There is no value for cases as there is no sale of cases. The cases are given FOC. The cost of the cases will be recognised and expensed off as they are delivered to the buyer.

         
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    Posted: 21 July 2010 01:31 AM #37

    MacOz - 21 July 2010 01:07 AM

    The $175M is for iPhone4 and not for cases. This is mentioned at 5:42 during the conference call. This makes more sense as if the cases are to be given free how can there be any revenue associated with the cases. There has to be an expense and not revenue.

    There is revenue. Apple is probably counting the case as part of the transaction. (E.g., iPhone = $570, case = $30 of a total transaction of $600.) Since they have not delivered the case, they cannot realize the revenue from the “sale” of the case until it is delivered. They also don’t have to count the cost of the case until it is delivered to the customer.

         
  • Posted: 21 July 2010 06:17 AM #38

    gslusher - 21 July 2010 04:31 AM
    MacOz - 21 July 2010 01:07 AM

    The $175M is for iPhone4 and not for cases. This is mentioned at 5:42 during the conference call. This makes more sense as if the cases are to be given free how can there be any revenue associated with the cases. There has to be an expense and not revenue.

    There is revenue. Apple is probably counting the case as part of the transaction. (E.g., iPhone = $570, case = $30 of a total transaction of $600.) Since they have not delivered the case, they cannot realize the revenue from the “sale” of the case until it is delivered. They also don’t have to count the cost of the case until it is delivered to the customer.

    Originally there was no case provided. Apple has not increased the price of the iPhone. They are now providing a case for all iphone purchases from introduction of the iphone through to 30 Sept. As such there cannot be any revenue attributed to the case. The following is extracted from Seeking Alpha’s transcript of the Earnings Call:

    Keith Bachman ? BMO Capital Markets

    Okay. A few to follow-ups, Peter, is there any comments that you could make on the impact of the bumpers? I know you said you were incurring the costs in the September quarter. Is there any way to quantify in terms of a basis points or any other metric that you can give us for the impact in the September quarter?

    Peter Oppenheimer

    Well, there are two impacts of this. The first is we will need to defer revenue for the iPhone 4s that we sell, where we have not delivered the bumpers, and where we have not heard from the customers wanting to place an order. And I expect the accrual that we will need to make, which is a revenue accrual with no cost to be about $175 million in the September quarter, and I would expect to have that be recorded as revenue in the December quarter.

    We will expense the cost of the bumpers when we ship them to customers, and our most important objective there is to take care of every customer and delight them.

    [ Edited: 21 July 2010 06:32 AM by MacOz ]      
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    Posted: 21 July 2010 07:41 AM #39

    Here is PED’s updated page on the earnings call results
    LINK

    I know I have said it numerous times now but everytime I think about it it just amazes me that a bunch of analysts getting paid thousands and thousands of $$ a year cant get closer than some intelligent investors with much less resources. You guys all rock!
    Deagol Great job! You guys gave a greater than 5% average beating to the guys who are supposed professionals on EPS. Clearly they still just don’t get it!

    [ Edited: 21 July 2010 07:59 AM by $Billyall ]      
  • Posted: 21 July 2010 08:32 AM #40

    Funny how Tim Cook answered the Q’s from Shaw Wu…
    ‘You have a little bit of ying and yang…’

    NO offence intended in anyway! (not from me…and I am sure not from Tim either…)

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    Posted: 21 July 2010 02:24 PM #41

    MacOz - 21 July 2010 09:17 AM

    Peter Oppenheimer

    Well, there are two impacts of this. The first is we will need to defer revenue for the iPhone 4s that we sell, where we have not delivered the bumpers, and where we have not heard from the customers wanting to place an order. And I expect the accrual that we will need to make, which is a revenue accrual with no cost to be about $175 million in the September quarter, and I would expect to have that be recorded as revenue in the December quarter.

    We will expense the cost of the bumpers when we ship them to customers, and our most important objective there is to take care of every customer and delight them.

    Perhaps you should check a bit earlier in the transcript, on page 3:

    “Looking ahead to the September quarter, I would like to review our outlook which includes the types of forward-looking information that Nancy referred to at the beginning of the call. As we announced on Friday, we will be offering free cases to all customers who have purchased an iPhone 4 through September 30. As a result, we will be deferring revenue corresponding to the value of the cases that are yet to be ordered by or delivered to eligible customers under this offer as of the end of the September quarter. We estimate this deferral to be about $175 million, and we expect the September quarter deferral to be recognized as revenue in the December quarter. We will recognize the cost of the cases upon delivery to our customers. “
    [emphasis added]

    That’s just what I said.

         
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    Posted: 21 July 2010 02:28 PM #42

    $Billyall - 21 July 2010 10:41 AM

    Here is PED’s updated page on the earnings call results
    LINK

    ... some intelligent investors with much less resources./quote]

    FWIW, Andy Zacky makes it clear that he has NO position in the equity market, so he’s not an “investor.”

         
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    Posted: 21 July 2010 02:39 PM #43

    He didnt have a position for a while in AAPL but he did as of yesterday before the close. He now states that he holds 2012 300 LEAPS

    It shows in his new disclosure

    [ Edited: 21 July 2010 02:54 PM by $Billyall ]