Apple Earnings
On July 17, 2008, Neatguy posted the following:
Most of the reports out concerning Apple earnings have been pretty tepid, with lots of concerns. I’m having a difficult time seeing anything less than $1.20. Here’s why:
- Historically, 3rd quarter sales and earnings are a bit higher than 2nd quarters.
- Data that has come out shows Mac sales will be in the 2.6 Million area vs. 2.3 Million last quarter. There is a give-away program for students getting a free ipod. So, margins will be a bit less than last quarters.
- Most ipod estimates are above last quarters.
- iPhone sales for the quarter will be less due to shortages, and not recognizing iphone sales until the new software package was released. However, because of subscription accounting, it won’t make much difference. In fact, the iphone should add more to eps than last quarter since there will be more phones getting the AT&T revenue sharing, and one more quarter (of
adding to the iphone subscription revenue. I’m estimating the iphone will add close to 30c to this quarters eps. I get this from assuming 6 million total iphones sold, and Apple getting $10 per month per phone from AT&T. This translates to $180 Million, virtually all of which goes to the bottom line. That yields about 20c. I’m assuming Apple will report about $200 Million for the actual phone (500,000 phones on subscription model at $400 each). Assuming a 35% margin, this would add about 8c.
So, assuming similar percentages for operating costs, and assuming the same margins (even Apple forecasted slightly higher margins than last quarter, if I remember correctly), I think revenue will be higher as well as eps vs last quarter.
What am I missing?
techstock2000 @ July 17, 2008
I am already down 2K on my apple investment ( http://www.savingtoinvest.com/2008/07/did-i-buy-apple-to-late-2k-loss-to-date.html) and as I lamented, I wish I had the bought the stock this week, rather than before the iPhone. Anyway, I will wait and see if my paper losses grow or disappear today.. Hopefully they beat the streets views and give strong guidance. Also, Steve Jobs health is still a cause for concern.