2011q1 Forecast

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    Posted: 21 October 2010 11:41 AM

    At heart, I believe we are investors in Apple, not traders in AAPL and should look at the road ahead, not where we are now. So, for January I expect:

    Note that I have significantly revised downwards my forecast published prior to the earnings release. Maybe I was a bit too optimistic in Mac unit sales, I too believed too much in the iPad hype, and did a poor job at predicting operating expenses.

    With the new information released by Apple the above table is going to be quite close to my final estimates, which I will announce in January. I will stick to these estimates unless there is a major disruptive event, or black swan.

    EDIT: I have corrected the table noting the errors pointed out by Thomaspin and adamthompson3232. I was referring the cells in the summary sheet (published above) from cells in my main spreadsheet. I must have done a mistake somewhere, and it seems as if my arithmetic was wrong. I regret any confusion this may have caused, but my preliminary forecast still stands.

    [ Edited: 21 October 2010 01:24 PM by awcabot ]

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    Posted: 21 October 2010 11:57 AM #1

    That is impressive.  I hope you are correct, but it seems a little to optimistic.

    update.

    I think you may be off by 1 million in the iPods and iPads, and about 100K in Macs.  The iPhone number looks about right.

    [ Edited: 21 October 2010 12:02 PM by omacvi ]      
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    Posted: 21 October 2010 12:30 PM #2

    copied from my thread on “projecting stock prices forward”

    Ballpark predictions in order to achieve 23 B in revenue of Peter Oppenheimer’s guidance

    iPod $ 3 Billion (might be a little high)
    iPad $ 3.5
    Mac   $ 4.5
    Other $ 3.0
    iPhone $ 9   (might be a little low)
    ————-
    $ 23 B

         
  • Posted: 21 October 2010 12:37 PM #3

    I cannot get your numbers to foot.

    Revenues total $26,864.

    At 38.1% GM, GM is $10,235 (not $16,625), Op Inc $5,186 and Net Income $3,888 for EPS of $4.16

         
  • Posted: 21 October 2010 01:20 PM #4

    You don’t think iPhone numbers are a little light?  The only reason I say this is that China came online after last quarter and their sales have apparently been off the charts… coupled with no doubt further country additions throughout the quarter and further production ramp, this could go quite a bit higher than their 14.1m iPhones sold last quarter?  Or maybe I’m getting ahead of myself!

    iPad numbers look a little aggressive, although it appears they did increase production significantly at the end of last quarter so you never know!

    But all in all, a very sound estimate indeed.

         
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    Posted: 21 October 2010 02:28 PM #5

    Ach, I’ve been slacking and you beat me to it.

    Here is my January forecast.
    iPhones: 16.2 million
    Macs: 4.1
    iPads: 6
    iPods: 18.9
    Music revs: $1400
    Peripherals: $572
    Software: $700

    Net sales: $25.2 billion
    Gross margin: 37.6%
    EPS: 5.87

    (Earnings growth: 60%)
    (slightly edited version here: http://www.asymco.com/2010/10/21/estimates-for-apples-first-quarter-earnings-january/)

    [ Edited: 21 October 2010 02:41 PM by asymco ]

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    Posted: 21 October 2010 10:56 PM #6

    I was at our local Apple University Store.  The manager said that the new iPods Nano are not selling well at all.  He thinks the lack of camera and video playback has a great deal to do with it.  This is just one source, but I wish there was some way to gather more info on how well they are doing.  The 11%  drop in iPod sales last quarter caught me by surprise.

         
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    Posted: 21 October 2010 11:43 PM #7

    asymco - 21 October 2010 05:28 PM

    Ach, I’ve been slacking and you beat me to it.

    Here is my January forecast.
    iPhones: 16.2 million
    Macs: 4.1
    iPads: 6
    iPods: 18.9
    Music revs: $1400
    Peripherals: $572
    Software: $700

    Net sales: $25.2 billion
    Gross margin: 37.6%
    EPS: 5.87

    (Earnings growth: 60%)
    (slightly edited version here: http://www.asymco.com/2010/10/21/estimates-for-apples-first-quarter-earnings-january/)

    Very nice “conservative” estimate.  I might put GM a little lower, iPods a little lower, and iPhones and iPads a little higher.  In fact, I think you’ve left room for significant iPhone upside.  It’s gonna be a knockout quarter anyway, how WS reacts all depends on the analysts to some degree.

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    Posted: 22 October 2010 01:42 AM #8

    Thanks for that estimate

      JohnG

         
  • Posted: 22 October 2010 05:06 AM #9

    omacvi - 22 October 2010 01:56 AM

    I was at our local Apple University Store.  The manager said that the new iPods Nano are not selling well at all.  He thinks the lack of camera and video playback has a great deal to do with it.  This is just one source, but I wish there was some way to gather more info on how well they are doing.  The 11%  drop in iPod sales last quarter caught me by surprise.

    I have anecdotal evidence as well that this is the case. The most recent example was a work colleague who was stoked to be able to find a last gen nano on the apple refurb store - two reasons: it has a video camera with video playback, and also he couldn’t see the new one being easy to control while jogging (to change track etc)

    They really should make the nano a little cheaper and just call it the new shuffle (and kill the cheaper shuffle). A iPod touch with a smaller bezel, storage and last generation core should be introduced as the new nano unit. Oh well, next September maybe.

    [ Edited: 22 October 2010 05:31 AM by IOSWeekly.com ]      
  • Posted: 22 October 2010 05:27 AM #10

    awcabot - 21 October 2010 02:41 PM

    At heart, I believe we are investors in Apple, not traders in AAPL and should look at the road ahead, not where we are now. So, for January I expect:

    Note that I have significantly revised downwards my forecast published prior to the earnings release. Maybe I was a bit too optimistic in Mac unit sales, I too believed too much in the iPad hype, and did a poor job at predicting operating expenses.

    With the new information released by Apple the above table is going to be quite close to my final estimates, which I will announce in January. I will stick to these estimates unless there is a major disruptive event, or black swan.

    EDIT: I have corrected the table noting the errors pointed out by Thomaspin and adamthompson3232. I was referring the cells in the summary sheet (published above) from cells in my main spreadsheet. I must have done a mistake somewhere, and it seems as if my arithmetic was wrong. I regret any confusion this may have caused, but my preliminary forecast still stands.

    Where are your appletv figures included? Peripherals? AppleTV easily on track for a million units or near to it, that’s an extra 100 million in revenue right?

         
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    Posted: 22 October 2010 08:46 AM #11

    IOSWeekly.com - 22 October 2010 08:27 AM

    Where are your appletv figures included? Peripherals? AppleTV easily on track for a million units or near to it, that’s an extra 100 million in revenue right?

    Peripherals and hardware. Unless Apple publishes AppleTV data, I am not going to run with my own. Anyway, $100M is a rounding error in a $26.9B quarter. As forecasters, we have to live with uncertainty.

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    Posted: 22 October 2010 10:03 AM #12

    IOSWeekly, you really pulled back on your 2Q11 revenues and eps.  Is that just a space saver for now, or leftover from the last quarter (and you forgot to change it)?

         
  • Posted: 22 October 2010 10:12 AM #13

    awcabot - 22 October 2010 11:46 AM
    IOSWeekly.com - 22 October 2010 08:27 AM

    Where are your appletv figures included? Peripherals? AppleTV easily on track for a million units or near to it, that’s an extra 100 million in revenue right?

    Peripherals and hardware. Unless Apple publishes AppleTV data, I am not going to run with my own. Anyway, $100M is a rounding error in a $26.9B quarter. As forecasters, we have to live with uncertainty.

    That is true.

    Still, a penny a share earnings here & there can help add to the next earnings beat.

    The appletv, plus a few million iLife 11 sales, iphone 4 bumper cases no longer being free, hopefully the first week of the new mac os app store sales and you may add up with and extra 10c per share in earnings if we are lucky, all from outside the big 4 hardware categories.

         
  • Posted: 22 October 2010 10:15 AM #14

    rutgersguy92 - 22 October 2010 01:03 PM

    IOSWeekly, you really pulled back on your 2Q11 revenues and eps.  Is that just a space saver for now, or leftover from the last quarter (and you forgot to change it)?

    I think you may have me confused with one of the brilliant chaps above who actually know what they are talking about (as opposed to myself).

         
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    Posted: 22 October 2010 11:07 AM #15

    Sorry about that IOS.  This was meant for awcabot.

    This board is refreshing in the civility of the participants, and I want to thank everyone for that.  My mistake with my previous post would have been greeted with all kinds of negative, condescending remarks on the Yahoo board, which are patrolled unfortunately by too many people who need to get out of the house more and take a walk around the neighborhood.

    Thanks to all for your participation and contributions.