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AAPL Q3 Estimates
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So now we have some guidance & Q2 performance known, what are the early ballpark predictions for Q3?
Working from 43.50% GM (2% higher than guidance), iPad growth, and iPhone shrinkage (clearing the channel before iPhone 5 in Q4):
20 million ipads
28 million iphones
5.5 million macs
7 million ipodsEPS $12.00
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- Long Apple
- Pro: Apple HDTV, iPhone Air, Stock split, Consumer robotics -
I don’t have near the insight everyone else has but I’ll give it a go.
iPads - 15.9 million
iPhones - 30.8 million
Macs - 4.6 million
iPods - 6.9 million -
Gregg Thurman
- [ Ignore ]
So now we have some guidance & Q2 performance known, what are the early ballpark predictions for Q3?
Working from 43.50% GM (2% higher than guidance), iPad growth, and iPhone shrinkage (clearing the channel before iPhone 5 in Q4):
20 million ipads
28 million iphones
5.5 million macs
7 million ipodsEPS $12.00
I haven’t done my numbers yet, but I think yours are going to be close.
One take away I got from the conference call, was that I think Apple is going to launch the next iPhone in late June, or early July. I do not not buy the decrease in demand/enough supply in the channel talk. It sounds more like June will be a draw down quarter in anticipation of a upgrade launch. Remember, Apple tried to warn us of that last July for the September quarter, and we didn’t take heed.
There is a good reason why I think Apple would want to launch in June/July. That would be the iPhone form factor. I don’t think it is getting long in the tooth. It is clean and very functional, BUT, the competition thinks so as well, hence the strong similarities (copies?) to the iPhone.
A new form factor enabled by liquid metal technology and Corning’s new gorilla glass make possible significant form factor changes that will visually differentiate the NEW iPhone from the competition.
At best, the competition won’t be able to react until after the December quarter, and by then it will be too late.
This time next year I see some dramatic consolidation among the following:
MSFT, GOOG, NOK, MOT, HTC, RIMM, LG and SE. The dominant players (Apple and Samsung) will command 75%-80% of the smartphone market worldwide. Samsung, being an unabashed copier, will be held in check with a form factor change by Apple, limiting Samsung’s share to under 10%.
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You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.
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adamthompson32
- [ Ignore ]
So now we have some guidance & Q2 performance known, what are the early ballpark predictions for Q3?
Working from 43.50% GM (2% higher than guidance), iPad growth, and iPhone shrinkage (clearing the channel before iPhone 5 in Q4):
20 million ipads
28 million iphones
5.5 million macs
7 million ipodsEPS $12.00
I see slightly fewer iPads, more iPhones, and gross margin % roughly 150 basis points higher than yours. Apple just guided to 42% and posted over 47%. Average GM% beat for the last 1-2 years is 350 basis points or so (haven’t updated my spreadsheets yet).
EPS guidance is up sequentially and actual EPS will be up sequentially too. TC mentioned just how huge January was and Apple couldn’t know exactly how much February and March would taper off so I think Apple actually came up short from what they wanted to do in the March quarter. The holiday quarter EPS beat was 50%. The March quarter EPS beat was 45%. I suspect we’ll get back closer to 50% now that there isn’t a huge January clowding the picture. I see EPS around $13.00.
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So now we have some guidance & Q2 performance known, what are the early ballpark predictions for Q3?
Working from 43.50% GM (2% higher than guidance), iPad growth, and iPhone shrinkage (clearing the channel before iPhone 5 in Q4):
20 million ipads
28 million iphones
5.5 million macs
7 million ipodsEPS $12.00
I see slightly fewer iPads, more iPhones, and gross margin % roughly 150 basis points higher than yours. Apple just guided to 42% and posted over 47%. Average GM% beat for the last 1-2 years is 350 basis points or so (haven’t updated my spreadsheets yet).
EPS guidance is up sequentially and actual EPS will be up sequentially too. TC mentioned just how huge January was and Apple couldn’t know exactly how much February and March would taper off so I think Apple actually came up short from what they wanted to do in the March quarter. The holiday quarter EPS beat was 50%. The March quarter EPS beat was 45%. I suspect we’ll get back closer to 50% now that there isn’t a huge January clowding the picture. I see EPS around $13.00.
Great posts today adamthompson32. You helped me carry EVERYTHING through. Thanks.
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adamthompson32
- [ Ignore ]
Deagol’s FQ3 estimates are included here. His FQ2 estimates were amazingly good.
http://aaplmodel.blogspot.com/2012/04/fiscal-2q-2012-final-estimates.html#more
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15 M iPads
33 M iPhones
4.7 M Macs
7 M iPods
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$ 12.20 EPS -
adamthompson32
- [ Ignore ]
So now we have some guidance & Q2 performance known, what are the early ballpark predictions for Q3?
Working from 43.50% GM (2% higher than guidance), iPad growth, and iPhone shrinkage (clearing the channel before iPhone 5 in Q4):
20 million ipads
28 million iphones
5.5 million macs
7 million ipodsEPS $12.00
I see slightly fewer iPads, more iPhones, and gross margin % roughly 150 basis points higher than yours. Apple just guided to 42% and posted over 47%. Average GM% beat for the last 1-2 years is 350 basis points or so (haven’t updated my spreadsheets yet).
EPS guidance is up sequentially and actual EPS will be up sequentially too. TC mentioned just how huge January was and Apple couldn’t know exactly how much February and March would taper off so I think Apple actually came up short from what they wanted to do in the March quarter. The holiday quarter EPS beat was 50%. The March quarter EPS beat was 45%. I suspect we’ll get back closer to 50% now that there isn’t a huge January clowding the picture. I see EPS around $13.00.
Great posts today adamthompson32. You helped me carry EVERYTHING through. Thanks.
You are welcome. Glad you made some money. I’m just glad I had the cojones to buy some May 600’s this morning when the sky was falling due to ATT iPhone sales numbers. Hoping for a double at the open tomorrow. Going forward nobody is going to pay nearly as much attention to domestic iPhone sales volumes as I think we’ll see 80%+ international sales going forward.
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adamthompson32
- [ Ignore ]
I know I’m getting ahead of myself here but early last year I started telling everyone in the world that Apple would post revenue of $50B in the holiday quarter and EPS of $13.00+. Then we got the actual results and revenue was a bit short but EPS beat me. I felt somewhat good about that. Now here I am thinking about what Apple is going to post for the holiday quarter this calendar year. And I’ve penciled it out a bit and I can’t believe my friggin’ eyes. I’m at $65B in revenue and $22.00+ EPS (net income margin of 32.5% and 950M shares outstanding). Am I insane? I really don’t think so. We’ll have the new iPhone on the market and iPad 3 for the holidays and possibly a new Apple TV product. Considering all that I think I’m being conservative at “only” 41% YoY revenue growth. The net income margin seems really high except when you consider that Apple just almost hit 30% net income margin on revenue that isn’t anywhere near $65B. So, as good as our TTM EPS looks today at $41.00, just remember that we are going to do more than half that in one quarter later this calendar year.
Now, please convince me I’m crazy.
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adamthompson32
- [ Ignore ]
And this probably isn’t the place for it but keep in mind that Apple has some tricks up its sleeve. Notably:
1. It is booking some tax expense for cash held overseas. If there is ever a tax holiday, Apple will take that accrued expense to net income. Basically, Apple is understating net income today but I don’t know by how much exactly.
2. The revenue deferral on its devices is still a drag on ASPs across all hardware product lines. This may be the right thing to do accounting wise but it causes Apple to understate its revenue a bit. Of course, guidance factors this in too but it’s worth noting.
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So now we have some guidance & Q2 performance known, what are the early ballpark predictions for Q3?
Working from 43.50% GM (2% higher than guidance), iPad growth, and iPhone shrinkage (clearing the channel before iPhone 5 in Q4):
20 million ipads
28 million iphones
5.5 million macs
7 million ipodsEPS $12.00
I haven’t done my numbers yet, but I think yours are going to be close.
One take away I got from the conference call, was that I think Apple is going to launch the next iPhone in late June, or early July. I do not not buy the decrease in demand/enough supply in the channel talk. It sounds more like June will be a draw down quarter in anticipation of a upgrade launch. Remember, Apple tried to warn us of that last July for the September quarter, and we didn’t take heed.
There is a good reason why I think Apple would want to launch in June/July. That would be the iPhone form factor. I don’t think it is getting long in the tooth. It is clean and very functional, BUT, the competition thinks so as well, hence the strong similarities (copies?) to the iPhone.
A new form factor enabled by liquid metal technology and Corning’s new gorilla glass make possible significant form factor changes that will visually differentiate the NEW iPhone from the competition.
At best, the competition won’t be able to react until after the December quarter, and by then it will be too late.
This time next year I see some dramatic consolidation among the following:
MSFT, GOOG, NOK, MOT, HTC, RIMM, LG and SE. The dominant players (Apple and Samsung) will command 75%-80% of the smartphone market worldwide. Samsung, being an unabashed copier, will be held in check with a form factor change by Apple, limiting Samsung’s share to under 10%.
I might add LTE. It’s the only real sales advantage some models have, and Apple has already gone there with the new iPad. I suspect the new form factor may have been ready before SJ passed, at least in prototype. Just a feeling.
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AT, you’re thinking three quarters ahead, which isn’t necessarily a bad thing. I’ll have to take a closer look and get back to you.
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The Summer of AAPL is here. Enjoy it (responsibly) while it lasts.
AFB Night Owl Team™
Thanks, Steve. -
I know I’m getting ahead of myself here but early last year I started telling everyone in the world that Apple would post revenue of $50B in the holiday quarter and EPS of $13.00+. Then we got the actual results and revenue was a bit short but EPS beat me. I felt somewhat good about that. Now here I am thinking about what Apple is going to post for the holiday quarter this calendar year. And I’ve penciled it out a bit and I can’t believe my friggin’ eyes. I’m at $65B in revenue and $22.00+ EPS (net income margin of 32.5% and 950M shares outstanding). Am I insane? I really don’t think so. We’ll have the new iPhone on the market and iPad 3 for the holidays and possibly a new Apple TV product. Considering all that I think I’m being conservative at “only” 41% YoY revenue growth. The net income margin seems really high except when you consider that Apple just almost hit 30% net income margin on revenue that isn’t anywhere near $65B. So, as good as our TTM EPS looks today at $41.00, just remember that we are going to do more than half that in one quarter later this calendar year.
Now, please convince me I’m crazy.
You are crazy.
But lets look at it by looking forward from this quarter in a backwards fashion.
If we project 80% eps growth from FY 12 to F13 we must look at this FY 3rd and 4th quarter growth so we can get at least 56. That means that this quarter or 3rd quarter needs to come in at 14 and then fourth quarter at 15. That would only be possible if we get the iPhone 5 in July.
If we grow 80% then we must get an eps of 25 for 1st quarter FY13. I am project an eps of 100 for FY13
So your number is too low. :-D
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I can get to $ 16-18. Sitting back in chair.
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adamthompson32
- [ Ignore ]
I know I’m getting ahead of myself here but early last year I started telling everyone in the world that Apple would post revenue of $50B in the holiday quarter and EPS of $13.00+. Then we got the actual results and revenue was a bit short but EPS beat me. I felt somewhat good about that. Now here I am thinking about what Apple is going to post for the holiday quarter this calendar year. And I’ve penciled it out a bit and I can’t believe my friggin’ eyes. I’m at $65B in revenue and $22.00+ EPS (net income margin of 32.5% and 950M shares outstanding). Am I insane? I really don’t think so. We’ll have the new iPhone on the market and iPad 3 for the holidays and possibly a new Apple TV product. Considering all that I think I’m being conservative at “only” 41% YoY revenue growth. The net income margin seems really high except when you consider that Apple just almost hit 30% net income margin on revenue that isn’t anywhere near $65B. So, as good as our TTM EPS looks today at $41.00, just remember that we are going to do more than half that in one quarter later this calendar year.
Now, please convince me I’m crazy.
You are crazy.But lets look at it by looking forward from this quarter in a backwards fashion.
If we project 80% eps growth from FY 12 to F13 we must look at this FY 3rd and 4th quarter growth so we can get at least 56. That means that this quarter or 3rd quarter needs to come in at 14 and then fourth quarter at 15. That would only be possible if we get the iPhone 5 in July.
If we grow 80% then we must get an eps of 25 for 1st quarter FY13. I am project an eps of 100 for FY13
So your number is too low. :-D
Haha. Loved that last line. I just checked Deagol’s site (I really love his estimates) and for the 12 months ending in March 2014 he sees EPS of $79.58.
http://aaplmodel.blogspot.com/2012/04/fiscal-2q-2012-final-estimates.html
I think we can get to $75.00 for FY13 (39% growth) and then $100.00 (33% growth) could be in the cards for FY14. Of course, cash will be $300+ per share by then without dividend growth (which we will in fact get).
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Gregg Thurman
- [ Ignore ]
And this probably isn’t the place for it but keep in mind that Apple has some tricks up its sleeve. Notably:
1. It is booking some tax expense for cash held overseas. If there is ever a tax holiday, Apple will take that accrued expense to net income. Basically, Apple is understating net income today but I don’t know by how much exactly.
2. The revenue deferral on its devices is still a drag on ASPs across all hardware product lines. This may be the right thing to do accounting wise but it causes Apple to understate its revenue a bit. Of course, guidance factors this in too but it’s worth noting.
Revenue deferral isn’t all that much. It starts at $30, then is recaptured over the next 7 quarters.
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You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.
