AAPL Fiscal 4th Quarter Revenue Estimate Preview

  • Posted: 29 August 2010 06:43 PM

    My latest missive at Eventide.

    Snippet: To put the iPad’s importance to Apple’s September quarter results in an appropriate perspective, one must consider in limited release the device represented 13.8% of the June quarter’s reported revenue. At 6 million units sold the Apple iPad will represent between 18% and 20% of the September quarter’s revenue results. This does not include revenue contributions from iPad-related iTunes sales activity.

    I continue to look at the numbers behind my 4th fiscal quarter estimates with a variety of methods and metrics and I find the results to be startling for the fiscal quarter.

         
  • Posted: 29 August 2010 07:14 PM #1

    adamthompson3232 - 29 August 2010 10:12 PM

    6M iPads during the quarter? WOW! How many are you estimating for the holiday quarter?!?!?

    I think the biggest surprise for this quarter is going to be the Mac. It seems like every day someone I know is making the switch and buying a Mac.

    You (of all people!) really think 6 million units in the September quarter is an ambitious target?  LOL

         
  • Posted: 29 August 2010 08:19 PM #2

    I’ve got 6M iPads baked in my EPS $4.43.  I’ll wait for Q4 2010 to end before I speculate about iPad sales in Q1 2011 (Dec. quarter). 

    AAPL is staring at $15 EPS for its FYE 9/30/10.  The only question mark is the condition of the market and AAPL’s corresponding P/E.  AAPL’s P/E should be 20, but that’s probably optimistic, as of today.

         
  • Posted: 29 August 2010 08:28 PM #3

    Mercel - 29 August 2010 11:19 PM

    I’ve got 6M iPads baked in my EPS $4.43.  I’ll wait for Q4 2010 to end before I speculate about iPad sales in Q1 2011 (Dec. quarter). 

    AAPL is staring at $15 EPS for its FYE 9/30/10.  The only question mark is the condition of the market and AAPL’s corresponding P/E.  AAPL’s P/E should be 20, but that’s probably optimistic, as of today.

    Good to know there’s another critical analyst considering 6 million iPad units for the quarter. I haven’t revised my earnings estimates yet, but I sure like your $4.43 eps.

    Depending on the pace of Mac and iPhone unit sales growth, I may come in just a bit higher. But you’re right, we will hit the $15 per share marker for the fiscal year.

         
  • Posted: 29 August 2010 08:33 PM #4

    When Apple surprised with high Q4 revenue guidance, it was fascinating how many people, even longtime AFB longs, assumed that the guidance was less conservative than normal due to Apple wanting to counteract Antennagate, then in full bloom.

    But that’s not the Apple I know.  They are not about to change their business methods because of chatter of the masses.  I believe that both the revenue and earnings guidance was as conservative as ever, so if you do the math it equates to a blowout in Q4 of epic proportions.

         
  • Posted: 29 August 2010 08:50 PM #5

    macorange - 29 August 2010 11:33 PM

    But that’s not the Apple I know.  They are not about to change their business methods because of chatter of the masses.  I believe that both the revenue and earnings guidance was as conservative as ever, so if you do the math it equates to a blowout in Q4 of epic proportions.

    The numbers I’m seeing are quite startling and I keep looking at the numbers and the formulas to be sure they are accurate. I’m waiting on some corroborating data for modeling iPhone and Mac sales and I’m hopeful we’ll get a marker on iPad sales come Wednesday.

    What’s interesting to note is absent the impact of the iPad and related accessories sales, revenue is up almost 40% year-over-year for the first nine months of the fiscal year, including Apple’s efforts to aggressively drain the channel of iPhone stock before the release of the iPhone 4.

         
  • Posted: 29 August 2010 09:07 PM #6

    With the 3GS iPhone Apple’s unit sales approached 3,000,000 a quarter.  I have to believe that they are now producing a lot more and they still have a large backlog.  This assumes that there is no production bottleneck such as a component shortage.  It looks like the current quarter will exceed 12,000,000 units.

    At one Apple store I was told that they are selling as many iPads as iPhones, so I wouldn’t't be surprised if they sold more than 8,000,000 this quarter.

    If they do these their quarter would be breath taking.

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    The measure of the worth of a product is how much people are willing to pay for it, not how many people will buy it if the price is low enough.

         
  • Posted: 29 August 2010 10:34 PM #7

    adamthompson3232 - 30 August 2010 12:25 AM
    westech - 30 August 2010 12:07 AM

    With the 3GS iPhone Apple’s unit sales approached 3,000,000 a quarter.  I have to believe that they are now producing a lot more and they still have a large backlog.  This assumes that there is no production bottleneck such as a component shortage.  It looks like the current quarter will exceed 12,000,000 units.

    At one Apple store I was told that they are selling as many iPads as iPhones, so I wouldn’t't be surprised if they sold more than 8,000,000 this quarter.

    If they do these their quarter would be breath taking.

    I don’t trust anecdotal data from store level employees regarding sales of anything. Most of them are not privy to relevant information and are not able to make objective, quantitative, accurate estimates based on what they see. I have seen this play out time and again with various businesses I’ve worked with and for over the years. So, I don’t buy this particular argument for iPad sales approaching iPhone sales but I do think long-term the market is there for the iPad to outsell the iPhone, especially once different size iPads are available to meet any and all users’ requirements.

    If I recall correctly, AT&T activated 3.2 million iPhones on its network last quarter. Someone correct me if my recollection isn’t accurate.

    It’s plausible at any given Apple retail store iPad sales might be on par with iPhone sales at any given time. But I agree, anecdotal reports tend to be inaccurate. The iPad will not match the iPhone’s unit sales this quarter.

    Although iPhone unit sales are running 93% ahead of last year through June, I’m cautious about going that high on my September quarter estimates. For now I’m below that pace of growth in my estimates.

         
  • Posted: 29 August 2010 11:20 PM #8

    westech - 30 August 2010 12:07 AM

    With the 3GS iPhone Apple’s unit sales approached 3,000,000 a quarter.  I have to believe that they are now producing a lot more and they still have a large backlog.  This assumes that there is no production bottleneck such as a component shortage.  It looks like the current quarter will exceed 12,000,000 units.

    12 million units would represent about a 63% unit growth rate from the year-ago quarter. That’s doable.

         
  • Avatar

    Posted: 30 August 2010 12:28 AM #9

    Certainly the demand is there.  12,000,000 ?  Well, I suppose so.  Additional analysis welcome.

         
  • Posted: 30 August 2010 12:38 AM #10

    Tetrachloride - 30 August 2010 03:28 AM

    Certainly the demand is there.  12,000,000 ?  Well, I suppose so.  Additional analysis welcome.

    It will obviously depend on supply. Supply available, unit sales should exceed 12 million units.

         
  • Posted: 30 August 2010 12:39 AM #11

    Back to the discussion of 6 million iPads in the quarter. Who’s in at that number?

         
  • Posted: 30 August 2010 12:43 AM #12

    DawnTreader - 30 August 2010 01:34 AM
    adamthompson3232 - 30 August 2010 12:25 AM
    westech - 30 August 2010 12:07 AM

    With the 3GS iPhone Apple’s unit sales approached 3,000,000 a quarter.  I have to believe that they are now producing a lot more and they still have a large backlog.  This assumes that there is no production bottleneck such as a component shortage.  It looks like the current quarter will exceed 12,000,000 units.

    At one Apple store I was told that they are selling as many iPads as iPhones, so I wouldn’t't be surprised if they sold more than 8,000,000 this quarter.

    If they do these their quarter would be breath taking.

    I don’t trust anecdotal data from store level employees regarding sales of anything. Most of them are not privy to relevant information and are not able to make objective, quantitative, accurate estimates based on what they see. I have seen this play out time and again with various businesses I’ve worked with and for over the years. So, I don’t buy this particular argument for iPad sales approaching iPhone sales but I do think long-term the market is there for the iPad to outsell the iPhone, especially once different size iPads are available to meet any and all users’ requirements.

    If I recall correctly, AT&T activated 3.2 million iPhones on its network last quarter. Someone correct me if my recollection isn’t accurate.

    It’s plausible at any given Apple retail store iPad sales might be on par with iPhone sales at any given time. But I agree, anecdotal reports tend to be inaccurate. The iPad will not match the iPhone’s unit sales this quarter.

    Although iPhone unit sales are running 93% ahead of last year through June, I’m cautious about going that high on my September quarter estimates. For now I’m below that pace of growth in my estimates.


    I don’t recall Apple’s unit iPhone sales in the fourth quarter of 2009.  In the first quarter of 2010 (includes the Christmas Holiday sales) they sold in excess of 8,700,000 iPhones.  This serves as a base for their manufacturing capability.  They have not been able to meet market demand this quarter, which suggests to me that the demand is probably well in excess of 8,700,000 phones.  The iPhone 4 is a new product and may have manufacturing problems that we don’t know about.  If not, 4,000,000 phones a month does not seem to be out of line with the huge backlog and long delivery times quoted.

    As far as the iPad is concerned, I agree that my number is very speculative, and anecdotal reports are unreliable.  I am just suggesting that Apple could have an upside surprise rivaling the biggest we have seen.

    Maybe SJ will shed some light on this next week.

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    The measure of the worth of a product is how much people are willing to pay for it, not how many people will buy it if the price is low enough.

         
  • Posted: 30 August 2010 01:05 AM #13

    westech - 30 August 2010 03:43 AM

    I don’t recall Apple’s unit iPhone sales in the fourth quarter of 2009.  In the first quarter of 2010 (includes the Christmas Holiday sales) they sold in excess of 8,700,000 iPhones.  This serves as a base for their manufacturing capability.  They have not been able to meet market demand this quarter, which suggests to me that the demand is probably well in excess of 8,700,000 phones.  The iPhone 4 is a new product and may have manufacturing problems that we don’t know about.  If not, 4,000,000 phones a month does not seem to be out of line with the huge backlog and long delivery times quoted.

    As far as the iPad is concerned, I agree that my number is very speculative, and anecdotal reports are unreliable.  I am just suggesting that Apple could have an upside surprise rivaling the biggest we have seen.

    Maybe SJ will shed some light on this next week.

    In FQ4 ‘09 Apple shipped 7.367 million iPhone units. Please remember iPhone unit sales for the first nine months of this fiscal year ran at a 93% growth rate, including the iPhone 4 transition which reduced shipments in the latter half of the quarter unit the iPhone 4 began to ship.

    On the iPad, we don’t know the level of enterprise sales which will be a material factor in the results.

    I’d like to have an iPad unit sales update come Wednesday. We’ll see…

         
  • Posted: 30 August 2010 01:06 AM #14

    DawnTreader - 29 August 2010 09:43 PM

    My latest missive at Eventide.

    Snippet: To put the iPad’s importance to Apple’s September quarter results in an appropriate perspective, one must consider in limited release the device represented 13.8% of the June quarter’s reported revenue. At 6 million units sold the Apple iPad will represent between 18% and 20% of the September quarter’s revenue results. This does not include revenue contributions from iPad-related iTunes sales activity.

    I continue to look at the numbers behind my 4th fiscal quarter estimates with a variety of methods and metrics and I find the results to be startling for the fiscal quarter.

    I’m bringing the original post back for page two of the topic.

         
  • Posted: 30 August 2010 03:08 AM #15

    I am somewhat captivated by the numbers I’m seeing on my spreadsheets and I’m reviewing my forecasts and formulas over and over again. At this point, contingent on Apple meeting demand for the iPhone 4 with supply, revenue for the quarter will be well over $20 billion and the eps is correspondingly unreal.