Preliminary 2011 Q2 AAPL Revenue and EPS estimates

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    Posted: 20 March 2011 05:46 PM

    Jan 18, 2011, Apple reports $ 26.74 billion revenue and 6.43 EP.  Guidance is $ 22 billion and 4.90 EPS.

    Unusual points:

    1. Q1 was beyond the official expectations of all on Wall Street.
    2. Q2 guidance was also beyond.
    3. Q2 revenue guidance was only 4.4 % below Q1 guidance.  (there are several ways to arrive at this general point)
    4. Q2 EPS guidance was a bit higher than guidance for Q1. 

    Products released recently

    1. MacBook Airs updated in Oct 2010
    2. MacBook Pros updated in Feb 2011
    3. iPad 2—10 days ago
    4. VZ iPhone released Feb 2011
    5. Mac App store goes live Jan 2011

    The Great Tohoku Japan Earthquake (probably the official name in English as translated from Japanese) and Tsunami of March 11, 2011 will have minimal impact on results for Q2. 

    Q3 momentum and supplies are the big questions in the guidance numbers ahead.

    [ Edited: 23 March 2011 01:27 AM by DawnTreader ]      
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    Posted: 20 March 2011 06:12 PM #1

    Numerical extrapolations using data from the past 4 quarters:

    a) Average of (Actual Revenue/Guidance) = 1.16.  Lowest number is 1.13
    b) Average of (Actual EPS/Guidance) = 1.42.  Lowest is 1.34

    Gregg Thurman’s post in another thread

    Gregg Thurman - 20 March 2011 06:09 AM
    DawnTreader - 19 March 2011 05:09 PM

    Following the release of the iPad 2 and indications original iPad units remain available, what should the market expect for iPad unit shipments in the March quarter?

    Apple entered the quarter with 4 to 6 weeks of channel inventory on the original iPad and iPad 2 units are in constrained supply.

    I think the only real way to look at iPad unit sales is to start with Apple’s March quarter guidance.

    Firstly, Apple guided $4.90 for FQ2.  Apple guided $4.80 for the December quarter, then reported $6.43.  That’s a ratio of 1:1.34.  If we apply that ratio to March quarter guidance we get EPS of $6.56.  Yes, it is that simple when you have watched Apple guide, and report, like that for the past 6 years.

    I applied seasonality to Mac, iPod and iPhone sales (Verizon isn’t going to bump worldwide iPhone sales that much), then adjusted iPad sales to make up the difference in earnings.  With an iPad unit sales estimate of 7.7 million units I arrive at EPS of ~$6.25, well below that predicted by the guidance to actual ratio.

    It takes an increase in iPad unit sales (QoQ) of 25% (9.2 million units) to get an EPS of $6.57 (ratio predicts $6.58).  I have a hard time (emotionally) with a number that large, but think it possible.  I’m just not ready (again emotionally) to officially forecast a number like that, then put my money where my mouth is, and invest.

    The first run calculation of conservative extrapolation says EPS of $ 6.56.  Dialing down the enthusiasm, we get $ 6.35.  Knocking off a bit more for changes in economy, and I think we are about $ 6.10.

    That said, the European and Asian economies are not the US economy.

         
  • Posted: 20 March 2011 06:16 PM #2

    $5.73

         
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    Posted: 20 March 2011 06:25 PM #3

    roni - 20 March 2011 09:16 PM

    $5.73

    Yo Ron

    Yiikes, that # (if it comes to pass) would likely generate downward pressure on aapl.  :bugeyed:

    I’m expecting a # much closer to $6…...........  I thought well over $6 until the ipad2 shortage ‘issue’ (or whatever it is) has reared its ugly head.

      cheers
        JohnG

         
  • Posted: 20 March 2011 06:38 PM #4

    Last quarter (FQ1) revenue rose 70.5% and eps rose 75.2%. If eps rises at the same rate in FQ2 the outcome would be about $5.83 per share. FQ2 2010 also had extraordinarily high gross margins (41.67%) and a low overall tax rate of about 23.7%. 

    Please keep expectations in check. Apple will have a superb quarter, but don’t let enthusiasm have unbridled reign in your expectations.

         
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    Posted: 20 March 2011 07:01 PM #5

    A lot of it depends on how you feel on iPhone.  I’m in the Cook/Oppenheimer “we could have sold more”/“increasing capacity as quickly as possible” camp, and it was plain to me that their comments had nothing to do with the VeriPhone.  Apple DOES NOT hint about future products during CCs unless magic words like “future product transition” are uttered.  So I interpreted Cook’s/Oppenheimer’s remarks as being in a “vacuum” that did not contemplate the VeriPhone.  That’s why my home game estimates will essentially add VeriPhone sales on top of a “base” iPhone quarterly sales number that I will likely set at 16.2 million iPhones or higher.

    I also think that over $6.00EPS is a pretty safe bet, albeit subject to iPad (which is why I’m waiting for some kind of data points before starting to plug in the numbers).  It wouldn’t make sense for Oppenheimer to go from $4.80 Q1 EPS guidance >> $6.43 EPS actual, then guide for a dime higher in earnings for fiscal Q2 while actually “meaning” or “targeting” for a number south of $6.00 EPS. 

    I totally agree that caution and conservatism are important, particularly for this quarter.  However, I suspect DT will end up north of $6.00 EPS.  So my post is really more of a “counterpoint” rather than a disagreement with DT’s reasoning.

    [ Edited: 20 March 2011 07:04 PM by Mav ]

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    Posted: 20 March 2011 07:03 PM #6

    The previous quarter’s thread 

    Here’s the projection for last quarter by westech, to pick a nice looking example

    By comparison, I guess

    CPU’s at 3.5 million
    iPods at 7.2 million
    iPhones at 19 million
    iPads at 6.4 million
    Software at $ 1 billion
    Peripherals steady at $ 600
    itunes steady at $ 1600

    gross margin 39.2. 

    Casts the dice:  24.5 B revenue,  EPS 5.90.

    [ Edited: 21 March 2011 11:04 PM by Tetrachloride ]      
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    Posted: 21 March 2011 10:57 PM #7

    Horace Dediu’s numbers posted back in January have a $ 5.89 EPS. 

    Daniel Tello posted today and is projecting $ 6.32 EPS

    PED pointed out both estimate at Fortune today.

    Both have some interesting differences.  Daniel is high on iPads, whereas Horace is optimistic on iPhones.  I’m really pessimistic on iPods.  I’ll continue to review my WAGs.  This is a challenging quarter to predict. 

         
  • Posted: 21 March 2011 11:02 PM #8

    Tetrachloride - 20 March 2011 10:03 PM

    By comparison, I guess

    CPU’s at 3.6 million
    iPods at 7.2 million
    iPhones at 19 million
    iPads at 6 million
    Software at $ 1 billion
    Peripherals steady at $ 600
    itunes steady at $ 1600

    gross margin was 39.2. 

    my most optimistic revenue # is 25 billion

    Cast the dice:  24.5 B revenue,  EPS 5.90.

    Gross margin should come in between 40 - 41% Q2 2011.  I’m currently at 40%.

         
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    Posted: 21 March 2011 11:04 PM #9

    Tetrachloride - 22 March 2011 01:57 AM

    Horace Dediu’s numbers posted back in January have a $ 5.89 EPS. 

    Daniel Tello posted today and is projecting $ 6.32 EPS

    PED pointed out both estimate at Fortune today.

    Both have some interesting differences.  Daniel is high on iPads, whereas Horace is optimistic on iPhones.  I’m really pessimistic on iPods.  I’ll continue to review my WAGs.  This is a challenging quarter to predict. 

    In a comment om Daniel’s thread Horace noted he may need to up his IPad number.

    We will see…lots more to come

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  • Posted: 21 March 2011 11:18 PM #10

    Tetrachloride - 20 March 2011 09:12 PM

    The first run calculation of conservative extrapolation says EPS of $ 6.56.  Dialing down the enthusiasm, we get $ 6.35.  Knocking off a bit more for changes in economy, and I think we are about $ 6.10.

    That said, the European and Asian economies are not the US economy.

    Right there with you.  I ended up with $6.11 eps

         
  • Posted: 21 March 2011 11:51 PM #11

    My current FQ2 2011 numbers:

    Revenue: $25.3B
    GM: 40%
    OpEx: 9.5%
    Provision for taxes: 23.5%
    Shares: 937MM
    EPS: $6.37

    Unit sales
    Mac - 4.0MM
    iPhone - 18.4MM
    iPod - 10.1MM
    iPad - 6.0MM

    I welcome feedback from anyone.

         
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    Posted: 22 March 2011 12:50 AM #12

    My WAG is $6.15

         
  • Posted: 22 March 2011 02:06 AM #13

    Save your numbers for the AFB index. Sassy will log on soon with the details.

         
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    Posted: 22 March 2011 06:20 AM #14

    I have to wait until the iPad 2 initial sales numbers come out (and I’m sure they will soon) before prepping my home game numbers. 

    DT, if I actually get the estimates done earlier, I’d appreciate it if they stay on this board for now.  At least until I’m within a 0.5% margin of error, at which time I will declare myself a genius. raspberry

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
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  • Posted: 22 March 2011 08:40 AM #15

    My estimates:
    Q2 eps: 5.9
    Revenue: $24B

    Few thoughts:
    - Q2 Guidance was higher (than Q1) but some of it was to dampen the impact of news of SJ’s medical leave announced a day before earnings.
    - Gross margin will be the big difference between Q1 and Q2. My expectation is around 40%.
    - Japan event will not affect Q2 numbers much. I think all retail stores are open and operational.

    Anything above 6 eps would be blockbuster but I am not expecting it mainly because VZ iPhone launch was not mega success. I think it is selling well but just not as spectacularly and with huge sales as some had predicted including Apple. It was clear that Apple stores planned and prepared for lines that never materialized. iPhone sales should come in at 17M+ this quarter.

    Q1 used to be significantly higher and now it is not as much. Last year Q2 was about 90% of Q1 eps. And this has been getting higher every year used to be about 70% ( 91%, 72%, 67%, 76%). I think Apple has done well with product launches spread in various quarters to mitigate impact of seasonality.