AAPL Q2 Estimates

  • Posted: 25 March 2012 01:39 PM #16

    Hamourabi - 25 March 2012 03:16 PM

    I expect Q2 EPS $12.5 ; will up the trailing one year EPS to 41.5 ; with some luck we could see AAPL @ $650

    That would be a ttm P/E of 15.7

    Do you think the P/E will compress from its current ~17 with earnings of $12.50?

         
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    Posted: 25 March 2012 02:11 PM #17

    roni - 25 March 2012 04:39 PM
    Hamourabi - 25 March 2012 03:16 PM

    I expect Q2 EPS $12.5 ; will up the trailing one year EPS to 41.5 ; with some luck we could see AAPL @ $650

    That would be a ttm P/E of 15.7

    Do you think the P/E will compress from its current ~17 with earnings of $12.50?

    Butting in here with my opinion:
    I’ll be VERY surprised if Q2 comes in outside 12 +- 0.5. However, predicting the actual share price (a week after the earnings release) is much harder. My WAG PE range is 15-17 so that “should” put aapl somewhere around $650 +- 50 depending on the actual earnings and the overall market and guidance. Just musing here, but I would be very happy with 650 by mid April…...............  given that I originally expected that # around the end of the year.

      cheers to all
        JohnG

         
  • Posted: 25 March 2012 02:27 PM #18

    roni - 25 March 2012 04:39 PM
    Hamourabi - 25 March 2012 03:16 PM

    I expect Q2 EPS $12.5 ; will up the trailing one year EPS to 41.5 ; with some luck we could see AAPL @ $650

    That would be a ttm P/E of 15.7

    Do you think the P/E will compress from its current ~17 with earnings of $12.50?

    Yes, I think the current 17 anticipate coming earnings.

         
  • Posted: 25 March 2012 02:50 PM #19

    Hamourabi - 25 March 2012 05:27 PM
    roni - 25 March 2012 04:39 PM
    Hamourabi - 25 March 2012 03:16 PM

    I expect Q2 EPS $12.5 ; will up the trailing one year EPS to 41.5 ; with some luck we could see AAPL @ $650

    That would be a ttm P/E of 15.7

    Do you think the P/E will compress from its current ~17 with earnings of $12.50?

    Yes, I think the current 17 anticipate coming earnings.

    Does that mean, in your opinion, that the earnings run-up has already happened or, does AAPL run higher pre-earnings.

         
  • Posted: 25 March 2012 03:07 PM #20

    Does that mean, in your opinion, that the earnings run-up has already happened or, does AAPL run higher pre-earnings.

    In my opinion the current price accounts for trailing earnings greater than 35 and the P/E ratio post earning could go back toward 15 with $42 trailing earnings.

         
  • Posted: 25 March 2012 03:19 PM #21

    New AAPL buyers should help support/expand its P/E going forward.  I’m hopeful we’ll keep at least a P/E of 16 post -earnings, which suggests $650-$675 PPS.  Plus, iPhone 5—er, the New iPhone—is on the Horizon.  Between that, we will likely have new MacBook Pros that will be more than an evolutionary upgrade.

    But Wall Street is Wall Street and the usual caveats apply

         
  • Posted: 25 March 2012 04:36 PM #22

    Mercel - 25 March 2012 06:19 PM

    New AAPL buyers should help support/expand its P/E going forward.  I’m hopeful we’ll keep at least a P/E of 16 post -earnings, which suggests $650-$675 PPS.  Plus, iPhone 5—er, the New iPhone—is on the Horizon.  Between that, we will likely have new MacBook Pros that will be more than an evolutionary upgrade.

    But Wall Street is Wall Street and the usual caveats apply

    Apple: Focus On Earnings Growth, Not The Earnings Multiple

    The market will continue to play catch up on the multiple as long as triple-digit or near-triple-digit earnings growth continues. For valuation purposes, a multiple of 15x times trailing 12-month earnings is more than sufficient to move the share price dramatically higher over the next nine months.

         
  • Posted: 25 March 2012 04:52 PM #23

    DawnTreader - 25 March 2012 07:36 PM
    Mercel - 25 March 2012 06:19 PM

    New AAPL buyers should help support/expand its P/E going forward.  I’m hopeful we’ll keep at least a P/E of 16 post -earnings, which suggests $650-$675 PPS.  Plus, iPhone 5—er, the New iPhone—is on the Horizon.  Between that, we will likely have new MacBook Pros that will be more than an evolutionary upgrade.

    But Wall Street is Wall Street and the usual caveats apply

    Apple: Focus On Earnings Growth, Not The Earnings Multiple

    The market will continue to play catch up on the multiple as long as triple-digit or near-triple-digit earnings growth continues. For valuation purposes, a multiple of 15x times trailing 12-month earnings is more than sufficient to move the share price dramatically higher over the next nine months.

    Yes, a 15 multiple moves the share price dramatically higher.  My calls and LEAPS are set up to do very well at considerably lower levels, but…..

    The sentence of DT’s that I bolded seems to carry a fairly strong implication of a rising multiple, though.  Did I misread that sentence?

         
  • Posted: 25 March 2012 06:06 PM #24

    If iPhone units are up sequentially the stock will be up ~$50 the day after earnings (almost regardless of pre-earnings PPS). Nothing else matters (nearly as much).

         
  • Posted: 25 March 2012 06:09 PM #25

    roni - 25 March 2012 07:52 PM
    DawnTreader - 25 March 2012 07:36 PM
    Mercel - 25 March 2012 06:19 PM

    New AAPL buyers should help support/expand its P/E going forward.  I’m hopeful we’ll keep at least a P/E of 16 post -earnings, which suggests $650-$675 PPS.  Plus, iPhone 5—er, the New iPhone—is on the Horizon.  Between that, we will likely have new MacBook Pros that will be more than an evolutionary upgrade.

    But Wall Street is Wall Street and the usual caveats apply

    Apple: Focus On Earnings Growth, Not The Earnings Multiple

    The market will continue to play catch up on the multiple as long as triple-digit or near-triple-digit earnings growth continues. For valuation purposes, a multiple of 15x times trailing 12-month earnings is more than sufficient to move the share price dramatically higher over the next nine months.

    Yes, a 15 multiple moves the share price dramatically higher.  My calls and LEAPS are set up to do very well at considerably lower levels, but…..

    The sentence of DT’s that I bolded seems to carry a fairly strong implication of a rising multiple, though.  Did I misread that sentence?

    Ron:

    I expect the multiple to gradually rise as the pace of earnings growth begins to slow. I know that sounds odd, but currently the rate of share price appreciation does not match the rate of earnings growth. The recent advance to around $600 per share is only a retracing of the valuation relative to earnings from more than one year ago. In other words, the share price advance is backfilling a lagging performance over the past 12 months.

    I’m not expecting a significant rise in the multiple as long as earnings are rising at or need a triple-digit pace. Following the release of the next iteration of the iPhone, the holiday quarter for the iPad and perhaps addition of China Mobile as a carrier, I expect the rates of revenue and earnings growth to begin to moderate. That’s not a bad thing. As the rates go growth begin to slow, the market may award a higher earnings multiple with the share price rising more in synch with growth and at a higher multiple than what the market can and will award today.

         
  • Posted: 25 March 2012 06:21 PM #26

    DawnTreader - 25 March 2012 09:09 PM
    roni - 25 March 2012 07:52 PM
    DawnTreader - 25 March 2012 07:36 PM
    Mercel - 25 March 2012 06:19 PM

    New AAPL buyers should help support/expand its P/E going forward.  I’m hopeful we’ll keep at least a P/E of 16 post -earnings, which suggests $650-$675 PPS.  Plus, iPhone 5—er, the New iPhone—is on the Horizon.  Between that, we will likely have new MacBook Pros that will be more than an evolutionary upgrade.

    But Wall Street is Wall Street and the usual caveats apply

    Apple: Focus On Earnings Growth, Not The Earnings Multiple

    The market will continue to play catch up on the multiple as long as triple-digit or near-triple-digit earnings growth continues. For valuation purposes, a multiple of 15x times trailing 12-month earnings is more than sufficient to move the share price dramatically higher over the next nine months.

    Yes, a 15 multiple moves the share price dramatically higher.  My calls and LEAPS are set up to do very well at considerably lower levels, but…..
    The sentence of DT’s that I bolded seems to carry a fairly strong implication of a rising multiple, though.  Did I misread that sentence?

    Ron:

    I expect the multiple to gradually rise as the pace of earnings growth begins to slow. I know that sounds odd, but currently the rate of share price appreciation does not match the rate of earnings growth. The recent advance to around $600 per share is only a retracing of the valuation relative to earnings from more than one year ago. In other words, the share price advance is backfilling a lagging performance over the past 12 months.

    I’m not expecting a significant rise in the multiple as long as earnings are rising at or need a triple-digit pace. Following the release of the next iteration of the iPhone, the holiday quarter for the iPad and perhaps addition of China Mobile as a carrier, I expect the rates of revenue and earnings growth to begin to moderate. That’s not a bad thing. As the rates go growth begin to slow, the market may award a higher earnings multiple with the share price rising more in synch with growth and at a higher multiple than what the market can and will award today.

    Although I can’t see why that would be the case at all, I sure as heck hope you’re right. We are looking at $100+ EPS in FY14. I think we will have a P/E lower than the S&P 500’s at that time but it’ll be mostly irrelevant relative to today’s stock price.

         
  • Posted: 25 March 2012 07:15 PM #27

    Please remember the broad market’s move higher will have a positive impact on the multiple and the share price. But earnings and earnings growth will remain the primary catalysts for share price appreciation.

    The recent expansion of the multiple is due in part to the broad market’s moves and in part due to the fact analysts now have more confidence in modeling the iPad’s potential. I’ve said countless times the iPad remains in a nascent phase of global market development. Analysts are now beginning to grasp the global unit sales potential of this popular device.

         
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    Posted: 26 March 2012 08:04 AM #28

    Horace Dediu estimates the following for Q2 (see asymco.com):
      * iPhone units: 37.3 million (100%)
      * Macs: 4.7 million (25%)
      * iPads: 12.2 million (160%)
      * iPods: 7 million (-22%)
      * Music (incl. app) rev. growth: 40%
      * Peripherals rev. growth: 25%
      * Software rev. growth: 10%
      * Total revenues: $42.7 billion (growth: 73%)
      * GM: 44.7%
      * EPS: $12.0 (88%)

    I do not understand how he gets to a revenue number of only 42.7 billion with that kind of unit sales?

    When I insert the above unit numbers into my model I receive a revenue number (keeping the ASPs constant from Q1) of 48.2 billion.

    Do you guys get the same revenue number with Horace’s unit sales?

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  • Posted: 26 March 2012 09:32 AM #29

    DawnTreader - 25 March 2012 09:09 PM

    Ron:

    I expect the multiple to gradually rise as the pace of earnings growth begins to slow. I know that sounds odd, but currently the rate of share price appreciation does not match the rate of earnings growth. The recent advance to around $600 per share is only a retracing of the valuation relative to earnings from more than one year ago. In other words, the share price advance is backfilling a lagging performance over the past 12 months.

    I’m not expecting a significant rise in the multiple as long as earnings are rising at or need a triple-digit pace. Following the release of the next iteration of the iPhone, the holiday quarter for the iPad and perhaps addition of China Mobile as a carrier, I expect the rates of revenue and earnings growth to begin to moderate. That’s not a bad thing. As the rates go growth begin to slow, the market may award a higher earnings multiple with the share price rising more in synch with growth and at a higher multiple than what the market can and will award today.

    Thanks for the reply, Robert.  My only thought is this:  as TTM earnings go over $40 a share and then approach and surpass $50 a share, a gradual rise in the P/E ratio will be significant smile.

         
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    Posted: 26 March 2012 11:12 AM #30

    FY2012 
    Q2         Revenue    Units      ASP
             
    (millions) (thousands)    
    CPU          5418      4300     1260
    iPods         990      6000      165
    iPhones     26650     41000      650
    iPads        8100     13500      600
    Music        1800        
    Periph        600        
    Software      700        
    TOTAL   
    $  44.258 billion        
                
    GM           43.7 
    %    
                
    EPS       12.90 
    Gross Revenue        44258
    COGS                 24917
    Gross Income         19341

    OpEx                  3450
    OperatingIncome      15891
    OI
    &E                   130
    PreTax               16021  
    Taxes                 3845  
    (24 %)
    Net                  12176

    Shares                 944

    EPS                
    12.90 

    On this officially submitted estimate, my iPhones unit sales and OpEx might be high and Macs might be low.