The AFB AAPL FQ3 Estimate Index

  • Posted: 03 July 2011 02:02 AM

    The AFB AAPL FQ3 Estimate Index

    Snippet: During the first six months of the current fiscal year Apple’s revenue rose 76.2% and eps 83.2% in year-over-year comparisons. As a group AFB members estimate the pace of revenue growth in the June quarter will have slowed slightly to 69.14%. However, the pace of eps growth is estimated to rise above the performance of the first six months of the current fiscal year to 89.61%.

    The much anticipated AFB AAPL FQ3 Estimate Index has now been posted. Thank you to the 30 active AFB members who participated in the index this quarter.  grin


    [Edited to change topic type to normal]

    [ Edited: 04 July 2011 03:50 PM by DawnTreader ]      
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    Posted: 03 July 2011 02:21 AM #1

    $6.66 is the average EPS.

    I think that would be a great number. 

    Thanks DT and Sassy for all the hard work!

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    Posted: 03 July 2011 02:48 AM #2

    adamthompson3232 - 03 July 2011 05:45 AM

    What is idiot/analyst consensus right now?

    I believe $5.63.

         
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    Posted: 03 July 2011 02:57 AM #3

    madmaxroi - 03 July 2011 05:48 AM
    adamthompson3232 - 03 July 2011 05:45 AM

    What is idiot/analyst consensus right now?

    I believe $5.63.

    $5.67 consensus on earnings whisper.com (not the whisper) and $5.69 on CNBC.com.

         
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    Posted: 03 July 2011 03:09 AM #4

    How many contributors factored anything in for the one-time Nokia payment?  Roughly “fitty” cents per share when booked?  I took a pass assuming this will be booked in Q4.

         
  • Posted: 03 July 2011 03:18 AM #5

    madmaxroi - 03 July 2011 06:09 AM

    How many contributors factored anything in for the one-time Nokia payment?  Roughly “fitty” cents per share when booked?  I took a pass assuming this will be booked in Q4.

    How do you know it’s $.50 per share or the amount of the settlement? Is it possible Apple has already reserved much the settlement amount because the royalty liability was real, the only issue was whether or not Apple would pay the prevailing royalty rate or the inflated royalty rate originally demanded by Nokia?

         
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    Posted: 03 July 2011 03:45 AM #6

    DawnTreader - 03 July 2011 06:18 AM
    madmaxroi - 03 July 2011 06:09 AM

    How many contributors factored anything in for the one-time Nokia payment?  Roughly “fitty” cents per share when booked?  I took a pass assuming this will be booked in Q4.

    How do you know it’s $.50 per share or the amount of the settlement? Is it possible Apple has already reserved much the settlement amount because the royalty liability was real, the only issue was whether or not Apple would pay the prevailing royalty rate or the inflated royalty rate originally demanded by Nokia?

    Not sure whether any reserve has been set up or not.? Have you seen disclosed anywhere?? As stated on page 34 in AAPL?s 10-Q SEC filing dated 01/19/2011?

    ?In the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially adversely affect its financial condition or operating results.? However, the results of legal proceedings cannot be predicted with certainty.? Should the Company fail to prevail in any of these legal matters or should several of these legal matters be resolved against the Company in the same reporting period, the operating results of a particular reporting period could be materially adversely affected.?

    I have seen in at least one article that the one-time payment was approx. $600 million, but who knows.

         
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    Posted: 03 July 2011 05:48 AM #7

    This is important for us to examine closely going forward since there’s so many other lawsuits Apple’s embroiled in, several of which may settle out.

    I’m with DT on this one.  From what I recall, there was never an issue of Apple paying Nokia royalties, it was the whole FRAND (fair, reasonanle and non-discriminatory) issue so that Apple wouldn’t pay an unfair amount or have to let Nokia have a free ride on Apple’s own IP.

    Here’s one very dry, extremely technical item I found on the web that might provide some indirect insight into possible accounting treatment of settlement payments (apparently, from PricewaterhouseCoopers website): 

    Link here

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    Posted: 03 July 2011 06:04 AM #8

    Doing a little more quick research…

    When Intel entered into a settlement with AMD (Intel was doing the paying), Intel accounted for the settlement payment as an operating expense. http://www.intc.com/intelAR2010/mda/operations/operating_expenses/]See here - Intel website, 2010 annual report, OpEx section.

    Apple could do that, but if so, when would this OpEx “charge” be taken?  Given the materiality of the settlement and that the amount Apple will pay certainly won’t be trivial, we should hear a lot more on this on the July 19th CC.  It’d also be a good time to start thinking about how ever-crazy WS will react if Apple’s guidance materially suffers on account of the settlement.

    EDIT:  Here’s a little more food for thought, maybe.  From pages 76-77 of Apple’s 2010 annual report filing:

    The Company generally does not indemnify end-users of its operating system and application software against legal claims that the software infringes third-party intellectual property rights. Other agreements entered into by the Company sometimes include indemnification provisions under which the Company could be subject to costs and/or damages in the event of an infringement claim against the Company or an indemnified third-party. However, the Company has not been required to make any significant payments resulting from such an infringement claim asserted against it or an indemnified third-party and, in the opinion of management, does not have a potential liability related to unresolved infringement claims subject to indemnification that would materially adversely affect its financial condition or operating results. Therefore, the Company did not record a liability for infringement costs as of either September 25, 2010 or September 26, 2009.

    Source:  EDGAR online via Yahoo! Finance

    [ Edited: 03 July 2011 06:15 AM by Mav ]

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    Posted: 03 July 2011 06:49 AM #9

    Team Night/Early Morning Owl!

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    Posted: 03 July 2011 08:15 AM #10

    Red shirted ensign - 03 July 2011 05:21 AM

    $6.66 is the average EPS.

    Somehow that consensus estimate makes me uncomfortable .... smile

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  • Posted: 03 July 2011 08:43 AM #11

    DawnTreader - 03 July 2011 06:18 AM
    madmaxroi - 03 July 2011 06:09 AM

    How many contributors factored anything in for the one-time Nokia payment?  Roughly “fitty” cents per share when booked?  I took a pass assuming this will be booked in Q4.

    How do you know it’s $.50 per share or the amount of the settlement? Is it possible Apple has already reserved much the settlement amount because the royalty liability was real, the only issue was whether or not Apple would pay the prevailing royalty rate or the inflated royalty rate originally demanded by Nokia?

    Apple would have to record a loss in the f/s if 1). it was probable the future event was likely to occur AND 2).  the amount of loss could be reasonably estimated.

         
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    Posted: 03 July 2011 08:43 AM #12

    TanToday - 03 July 2011 11:15 AM
    Red shirted ensign - 03 July 2011 05:21 AM

    $6.66 is the average EPS.

    Somehow that consensus estimate makes me uncomfortable .... smile

    That was the price of the first Apple Computer if I recall grin

         
  • Posted: 03 July 2011 08:56 AM #13

    On the subject of the Nokia settlement, I do think it was probable Apple would lose this lawsuit.  However, I’m not sure the one-time payment could be reasonably estimated in a prior quarter.  Apple likely attempted to negotiate some of the one-time charge for past sins (if reports are accurate) across future licensing fees.

    The key point is that Apple likely knew how much coin (within a range anyway) it was going to cost them in a prior quarter (FQ2 2011 perhaps?) and if it was material, they either reserved something or factored it in their guidance # if they weren’t comfortable with the “reasonable estimate” required for booking it.

         
  • Posted: 03 July 2011 11:10 AM #14

    ChasMac77 - 03 July 2011 11:43 AM
    TanToday - 03 July 2011 11:15 AM
    Red shirted ensign - 03 July 2011 05:21 AM

    $6.66 is the average EPS.

    Somehow that consensus estimate makes me uncomfortable .... smile

    That was the price of the first Apple Computer if I recall grin

    The first Apple PC was sold at a retail price consisting of only sixes. By the way, if it makes someone less uncomfortable, it’s a rounded number. The actual is something like $6.655.

         
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    Posted: 03 July 2011 11:15 AM #15

    Yes, 6.65 makes me feel much better. :innocent:  You are just trying to be an instigator today.  LOL

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