AAPL Q3 Estimates

  • Posted: 26 April 2012 01:38 AM #31

    adamthompson32 - 25 April 2012 03:54 AM
    Gregg Thurman - 25 April 2012 02:48 AM
    adamthompson32 - 25 April 2012 02:42 AM
    Gregg Thurman - 25 April 2012 02:39 AM
    adamthompson32 - 25 April 2012 02:14 AM

    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.

    I know, but since they only recently started it there is a real impact, at least for the next year or so, but the impact will be diminished slightly each quarter going forward.

    Not really. Apple started revenue deferral decades ago. Only back then the only item that required it was AppleCare. Income from the iPhone ($30/unit) has been deferred since original launch. The same thing is true of the iPad. The amount deferred, in the aggregate, increases each quarter.

    The amount deferred increases each quarter but is offset by the amortization of past sales such that the biggest negative impact occurs in the first quarters after such deferrals begin and I believe the deferral for iCloud began only two quarters ago.

    Look at the balance sheet. The deferred revenue figures are shown there - both current and non-current. As unit sales and ASPs increase the deferred revenue figure increases. At end of 2Q2012 the total deferred revenue is about 7.5billion of which 5.2billion will be recognised within one year! This deferred revenue is one of the reasons why Apple’s cash inflow is increasing so rapidly.

         
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    Posted: 26 April 2012 02:20 AM #32

    Mav - 25 April 2012 07:24 AM

    I’ll start a little conservative for now.

    31M iPhones, 18.95M iPads, 4.5M Macs, $40.28B revs / $12.13 EPS.

    Oppenheimer and Cook did craft a decent puzzle this time around.  Hammering home sequential downtick in iPhones, really trying to sell the supply/demand balance/channel fill angle.  At the same time, guiding sequentially up and projecting surprisingly high OpEx.  Among other things.

    I think your iPhone number is very aggressive….and your iPad number is very conservative.

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  • Posted: 26 April 2012 02:23 AM #33

    pats - 25 April 2012 01:05 PM
    Mav - 25 April 2012 03:10 AM

    No, I will bet you a virtual BENJAMIN a next-gen iPhone is not in the cards by July.

    Oh yes, I’m betting big virtual currency cribbed with a little help from Google Images or somewheres.

    The only condition is no iOS 6 preview by the end of this month.  And I bet (no virtual currency on this one) that iOS 6 will wait until WWDC.  October launch all over again?  No bad thing!

    Why October.  My betting money is on Sep.  The rollout of iCloud significantly increased the complexity of the software release which resulted in extra weeks of testing.  Apple likes to launch toward the end of fiscal qtrs.

    What a great couple of days!  Great weather for raking up @ the cabin yesterday and today for having some more titanium installed to soon replace the missing teeth in my smile challenged uppers.  Nothing was keeping the smile off my face yesterday so a belated congrats to the crew for your excellent work once again.  Still mystified how some get so close with the kind of data at hand but always humbled to see the results.

    I’m going with Pat’s on the September launch.  Apple bit the bullet last year moving the iPhone to the holidays filling the void left by the declining iPod sales and it’s formerly fall spotlight setting up the always important holiday buying season. 

    My dream scenario this year?  15” air, revised and updated MacBook Pro line and the sleeper of the year…, new iMacs.  Sleeper you say?  Revised form factor with Phil mentioning that some would like to hang one of these in their kitchen so they’re building in a tuner and an aTV.  This ships standard in the new 21”, 27” and 37” iMacs.  Much groaning ensues for the lack of really large displays igniting the press machine and blogosphere yet again.  WWDC kicks off a couple of weeks later where the SDK is officially released for the aTV.  (groans at the mention are shortly followed by cheers after it’s pointed out that it’s compatible with aTV2 and forward mentioning the number of units sold year to date and the expected sales numbers from the new iMac.

    Moving on to the Holiday special event with the introduction of the ALL NEW iPhone with the liquid metal case, LTE radio while preserving battery life in lighter/slightly thinner case.  Enthusiastic applause as Tim exits the stage…,returning shortly with “In the immortal words of our beloved founder there is…,ONE MORE THING! 

    42”, 54”, 80” and 96” iMacs shipping Tomorrow with free White Glove Shipping!  I’d like to share our thinking on this with you…,  and so it begins.    :smilesanta:

    [ Edited: 26 April 2012 02:26 AM by BillH ]

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  • Posted: 26 April 2012 02:40 AM #34

    Mav - 25 April 2012 07:24 AM

    I’ll start a little conservative for now.

    31M iPhones, 18.95M iPads, 4.5M Macs, $40.28B revs / $12.13 EPS.

    Oppenheimer and Cook did craft a decent puzzle this time around.  Hammering home sequential downtick in iPhones, really trying to sell the supply/demand balance/channel fill angle.  At the same time, guiding sequentially up and projecting surprisingly high OpEx.  Among other things.

    We are similar on everything except my total revs and EPS are slightly higher. EPS guidance is up sequentially and I think apple came up short last Q of its target so I’m looking at ~$13.00 (1.5x guidance).

         
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    Posted: 26 April 2012 02:44 AM #35

    I’m not overlooking that higher guidance (you _did_ notice I mentioned that, right? :innocent:) one bit.  My estimate seems to pick up more and more helium as the quarter passes so I’m trying to keep it in check as much as possible for now.

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  • Posted: 26 April 2012 03:19 AM #36

    Mav - 26 April 2012 05:44 AM

    I’m not overlooking that higher guidance (you _did_ notice I mentioned that, right? :innocent:) one bit.  My estimate seems to pick up more and more helium as the quarter passes so I’m trying to keep it in check as much as possible for now.

    Yre anonymous - accuracy should come easily for you.

         
  • Posted: 27 April 2012 08:07 AM #37

    Regarding iPhone 5 release and purely looking at it from a sales aspect. 
    IF demand is high (as measured through channel inventory and backlog) and margins are increasing because Cost Of Goods Sold (COGS) is decreasing, there is no need to release a new version. 
    Long known in tech companies, if you do this you don?t get the max return during a product lifecycle which among other things financially stretches your R&D units within the company.. 
    You want to maximize everything you can get while you can get it so to speak.  To release something new simply because it’s new or cool has no place in the financial decision.  The major factor as to when to pull the trigger on a new product (for Apple at least) is probably the competition.  If the competition is 12 months behind it makes little sense to release a new product and cannibalize your existing product too early. 
    Just my HO I beleive that given the competition is still 12-18 months behind AND the number of carriers that have just released or scheduled to release the iPhone 4, a July release is highly unlikely.  Given all that I am sure TC will be monitoring The two points in my seconds sentence closely.
    As a side note I beleive all this talk of carriers demanding price reduction on the iPhone is just crap and guesswork.  As the lead salesperson for the company he is in the prime position to tell carriers to take it or leave it:  at this point in time no carrier CEO I now of would go to share holders and tell them they decided to drop the iPhone from their offerings therefore giving the completion a massive customer market share advantage.
    Frank

         
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    Posted: 28 April 2012 12:43 AM #38

    BillH - 26 April 2012 05:23 AM
    pats - 25 April 2012 01:05 PM
    Mav - 25 April 2012 03:10 AM

    No, I will bet you a virtual BENJAMIN a next-gen iPhone is not in the cards by July.

    Oh yes, I’m betting big virtual currency cribbed with a little help from Google Images or somewheres.

    The only condition is no iOS 6 preview by the end of this month.  And I bet (no virtual currency on this one) that iOS 6 will wait until WWDC.  October launch all over again?  No bad thing!

    Why October.  My betting money is on Sep.  The rollout of iCloud significantly increased the complexity of the software release which resulted in extra weeks of testing.  Apple likes to launch toward the end of fiscal qtrs.

    What a great couple of days!  Great weather for raking up @ the cabin yesterday and today for having some more titanium installed to soon replace the missing teeth in my smile challenged uppers.  Nothing was keeping the smile off my face yesterday so a belated congrats to the crew for your excellent work once again.  Still mystified how some get so close with the kind of data at hand but always humbled to see the results.

    I’m going with Pat’s on the September launch.  Apple bit the bullet last year moving the iPhone to the holidays filling the void left by the declining iPod sales and it’s formerly fall spotlight setting up the always important holiday buying season. 

    My dream scenario this year?  15” air, revised and updated MacBook Pro line and the sleeper of the year…, new iMacs.  Sleeper you say?  Revised form factor with Phil mentioning that some would like to hang one of these in their kitchen so they’re building in a tuner and an aTV.  This ships standard in the new 21”, 27” and 37” iMacs.  Much groaning ensues for the lack of really large displays igniting the press machine and blogosphere yet again.  WWDC kicks off a couple of weeks later where the SDK is officially released for the aTV.  (groans at the mention are shortly followed by cheers after it’s pointed out that it’s compatible with aTV2 and forward mentioning the number of units sold year to date and the expected sales numbers from the new iMac.

    Moving on to the Holiday special event with the introduction of the ALL NEW iPhone with the liquid metal case, LTE radio while preserving battery life in lighter/slightly thinner case.  Enthusiastic applause as Tim exits the stage…,returning shortly with “In the immortal words of our beloved founder there is…,ONE MORE THING! 

    42”, 54”, 80” and 96” iMacs shipping Tomorrow with free White Glove Shipping!  I’d like to share our thinking on this with you…,  and so it begins.    :smilesanta:

    I was very confident apple was going to release an AppleTV SDK this year for the exisiting box, Until it was discovered that the new apple TV box only uses a single core A5 chip, which is less powerful than the iPad 2 & iPhone 4S. I figure the most obvious use of an apple tv SDK would be for games, but I struggle to see a single core A5 push around HD graphics with ease.

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    Posted: 22 May 2012 06:15 AM #39

    Peter Oppenheimer said the following on the last earnings call:

    “We are pleased to be providing gross margin guidance of 41.5% for the quarter. We expect about two-thirds of the sequential decline to be primarily driven by a higher mix of iPads and Mac.”

    I thought that this implied much higher Mac revenues for Q3. However, over half the quarter is over and no new introductions, yet. Is it possible that a few weeks of new Macs availability can increase sales in such a substantial way to decrease gross margins in Q3?

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    Posted: 22 May 2012 10:08 AM #40

    Big Al - 22 May 2012 09:15 AM

    Peter Oppenheimer said the following on the last earnings call:

    “We are pleased to be providing gross margin guidance of 41.5% for the quarter. We expect about two-thirds of the sequential decline to be primarily driven by a higher mix of iPads and Mac.”

    I thought that this implied much higher Mac revenues for Q3. However, over half the quarter is over and no new introductions, yet. Is it possible that a few weeks of new Macs availability can increase sales in such a substantial way to decrease gross margins in Q3?

    I read this as iPad and Mac ( including cannibalization effect between the two) which are a net lower margin piece of the pie than iPhone, will together be a higher share of revenues than last quarter, thus softening GM in toto. But not that Mac sales will grow hugely, just that iPhone slows as part of the total picture.

    But I think we still see 43-44 percent GM

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  • Posted: 22 May 2012 10:22 AM #41

    Red Shirted Ensign - 22 May 2012 01:08 PM
    Big Al - 22 May 2012 09:15 AM

    Peter Oppenheimer said the following on the last earnings call:

    “We are pleased to be providing gross margin guidance of 41.5% for the quarter. We expect about two-thirds of the sequential decline to be primarily driven by a higher mix of iPads and Mac.”

    I thought that this implied much higher Mac revenues for Q3. However, over half the quarter is over and no new introductions, yet. Is it possible that a few weeks of new Macs availability can increase sales in such a substantial way to decrease gross margins in Q3?

    I read this as iPad and Mac ( including cannibalization effect between the two) which are a net lower margin piece of the pie than iPhone, will together be a higher share of revenues than last quarter, thus softening GM in toto. But not that Mac sales will grow hugely, just that iPhone slows as part of the total picture.

    But I think we still see 43-44 percent GM

    43.0% = 150 basis point beat = smallest GM% beat in years.

    44.0% = 250 basis point beat = roughly average GM% beat but recent beats are growing

    I’m at 45.0% to 45.5% and I think it ends up being conservative.

         
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    Posted: 25 May 2012 05:53 AM #42

    I gave my numbers a quick adjustment and sense check. 

    Result:  $42.1B revs/$12.30 EPS based on share creep to 947 million shares. 

    Wow. 

    Sequential increase in EPS is certainly possible, and while iPhone may be a theoretical “drag” on revenues (Observable iPhone “seasonality”?  Finally?), iPad has the potential to make for a truly stunning quarter.

    Even though my provisionally revised early numbers look quite high, it’s “only” revs growth of about 47% and net income growth of about 59% (granted, on giant revs and net income bases, and I doubt any company has ever grown that fast at those revs/income levels before).  So I think I’ll still at least in the mildly conservative estimates ballpark on this one.

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  • Posted: 25 May 2012 09:01 AM #43

    Mav

    If you plug in iPhone 33m units, iPad 22m units, Mac 4.5m units, with your GM%, what EPS # comes out of the bottom of your model?

    EDIT: “Out of the bottom”, I might have phrased that better…

         
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    Posted: 25 May 2012 09:44 AM #44

    LongAAPLsince02 - 25 May 2012 12:01 PM

    Mav

    If you plug in iPhone 33m units, iPad 22m units, Mac 4.5m units, with your GM%, what EPS # comes out of the bottom of your model?

    EDIT: “Out of the bottom”, I might have phrased that better…

    I am not Mav, but using your unit numbers my model would result in an EPS of $13.17 (GM of 45.5%).

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  • Posted: 25 May 2012 09:49 AM #45

    Big Al - 25 May 2012 12:44 PM

    I am not Mav….

    No s%^& :-)  Thanks though.  Interesting.