Apple’s Net Income Relative To Revenue Continues To Rise

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    Posted: 25 July 2011 01:27 AM #16

    Too high.  Not only is WS DEFINITELY NOT gonna give Apple that P/E at those EPS levels, I will be bouncing off the walls even if I was just holding common stock.

    But if I can allow myself to believe it might actually happen…well, for the few, the proud, the stupid?, the call holders…heck, AT may never need that gray goose ever again.  Even though he could buy a whole farm of ‘em…I mean truckloads of cases.  LOL

    I might also anonymously buy you all a gray goose wink each at the next Vegas party, because my Jan 13 500 position will have returned about 10x.

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    Posted: 25 July 2011 01:40 AM #17

    Mav - 25 July 2011 04:24 AM

    3 of us are seeing it, then.  Shared hallucination?

    Or shared insight?

    Tune in next October!

    Three?  Mav, DT, Adam…maybe Mark.  What am I, chopped liver? I was the guy who set you off by mentioning it first!

    Just kiddin’ ...I can’t handle the number that shall not be named. It blows my mind.

    [ Edited: 25 July 2011 01:43 AM by Red Shirted Ensign ]

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    Posted: 25 July 2011 01:46 AM #18

    What I see is the stock not reflecting China in any significant way. I am not going to speak of numbers until I get an better idea of sequences for the iphone5. When you add in the other China carriers the number that should not be mentioned is the iphone number.

    Mav, I hope your Jan 13 call’s get into the money very soon. I actually think next year I will be selling calls and puts more than this year. I will probably try to get an idea on some spreads. Johnny, you will need to teach me how to play craps and sell puts. LOL

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    Posted: 25 July 2011 02:06 AM #19

    Actually, Mark, I held my Jan 13 500s through the recent interval I shall call Max Pain, and sold them for a bit less than 10% return.  Debt ceiling jitters.  I’ll be buying back in soon.  smile

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    Posted: 25 July 2011 02:56 AM #20

    If you can filter the data or whatever, try using the HTML code tags on this board.  Keeps things neat.

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  • Posted: 25 July 2011 04:48 AM #21

    Back to our regularly scheduled programming: The numbers look darn good.

         
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    Posted: 25 July 2011 04:50 AM #22

    Really, really good.  But we can’t really get into specifics.  wink

    DT, what’s your read on the 10-Q?  Deferred revenue on iOS devices and Macs for software (with deferred taxes) at roughly 2% of sale price, but 100% of COGS recognized at the time of sale?

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  • Posted: 25 July 2011 04:57 AM #23

    Mav - 25 July 2011 07:50 AM

    Really, really good.  But we can’t really get into specifics.  wink

    DT, what’s your read on the 10-Q?  Deferred revenue on iOS devices and Macs for software (with deferred taxes) at roughly 2% of sale price, but 100% of COGS recognized at the time of sale?

    I would have to delve into the reports but I would expect a portion of both the revenue and the COGS to be deferred and realized on the same schedule.

         
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    Posted: 25 July 2011 05:16 AM #24

    Which would mean that net income ratio wouldn’t really be affected since the major profitability-influencing factors of COGS and taxes at least would be deferred, I’d assume.

    Anyway, I’m no accountant, but aside from Oppenheimer’s CC remarks you can refer to page 6 of the 10-Q hosted on Apple’s investor page: 

    Amounts allocated to the delivered hardware and the related essential software are recognized at the time of sale provided the other
    conditions for revenue recognition have been met. Amounts allocated to the embedded unspecified software upgrade rights and the
    online services are deferred and recognized on a straight-line basis over the estimated lives of each of these devices, which range from
    24 to 48 months. Cost of sales related to delivered hardware and related essential software, including estimated warranty costs, are
    recognized at the time of sale. Costs incurred to provide non-software services are recognized as cost of sales as incurred, and
    engineering and sales and marketing costs are recognized as operating expenses as incurred.

    but also:

    Beginning with the Company?s June 2011 announcement of the upcoming release of the online services and Mac OS X Lion, the
    Company?s combined ESP for the unspecified software upgrade rights and the right to receive the online services are as follows: $16
    for iPhone and iPad, $11 for iPod touch, and $22 for Mac. The Company?s ESP for the embedded unspecified software upgrade right
    included with each Apple TV is $5 for 2011. Amounts allocated to the embedded unspecified software upgrade rights and the online
    services associated with iPhone, iPad, iPod touch and Apple TV are recognized on a straight-line basis over 24 months, and amounts
    allocated to the embedded unspecified software upgrade rights and the online services associated with Mac are recognized on a
    straight-line basis over 48 months.
    The Company recognizes revenue in accordance with industry specific software accounting guidance for sales of software upgrades.
    Therefore, beginning in July 2011 the Company will defer all revenue from the sale of upgrades to the Mac OS and iLife software and
    recognize it ratably over 36 months.

    Not really sure what it means for COGS.

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  • Posted: 25 July 2011 05:48 AM #25

    What it means is all GOGS are recognized at time of sale but partions of the revenue are deferred. This will obviously have a slight dampening on margins that would otherwise have been reported had the deferral not been put in place.

         
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    Posted: 25 July 2011 06:15 AM #26

    It’s amazing the thought that $50 eps is probable within 18 months.

    And then consider that judging from the last decade, there is a fair possibility that apple will attempt to enter/create a new market with a new product within the next 18 months.

    There is no guarantee they will of course, and if they do there is no guarantee they will succeed, but the fact is that apple has now an established history of successfully entering/creating new markets with new products, yet this potential is obviously not reflected at all in the AAPL share price.

    (the discussion regarding what a possible new market may be, is of course a whole seperate issue, but I’m sure we all have ideas…)

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  • Posted: 25 July 2011 07:11 AM #27

    $ 50.00

    [ Edited: 25 July 2011 07:13 AM by danthemason ]      
  • Posted: 25 July 2011 08:57 AM #28

    $50.03625

         
  • Posted: 25 July 2011 11:30 AM #29

    Apple could reach $30 eps this fiscal year. What’s to slow the eps growth to less than 67% in FY 2012 considering the huge FQ1 that’s expected?

         
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    Posted: 25 July 2011 02:45 PM #30

    Analyst estimates.  wink LOL raspberry

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