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Post by Deleted on Jul 3, 2013 18:32:48 GMT -8
What revs number do you have? One troubling range that can't be dismissed out of hand: Apple is providing the following guidance for its fiscal 2013 third quarter: Since PO changed guidance metrics Apple has beat low end of guidance by the following percentages: FQ3/2012 3.01% FQ4/2012 5.78% FQ1/2013 4.83% FQ2/2013 6.35% Note that $35.5 billion is 6% (actually 5.97% but whose counting?) higher than $33.5 billion. I think PO expects Apple to generate revenue 6% higher than the range low. Expressed another way, I think PO expects revenue of $35.5 billion, and gave Apple a 6% cushion ($33.5 billion) just in case. That means that in only FQ2/2013 did Apple beat expectations, but its performance is improving. Expecting revenue $1.4 billion above the range high represents a 10% beat. I find that highly unlikely.
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Post by Deleted on Jul 3, 2013 18:41:42 GMT -8
Actually, I do too in my alpha estimates and it bugs me considerably. Though Apple did top revs range guidance last quarter by about $500M IIRC, so a beat can happen. It's the problem of extent. Was just perusing your q3 unit & ASP estimates on your blog aapltree.wordpress.com/2013/07/02/aapl-earnings-watch-fiscal-q3-2013-edition-part-2-a-second-small-leap-of-logic/I think the iPad number is possibly going to come in lower than expected this quarter (although I hope I'm wrong). Last years Q3 had 2 significant iPad factors going for it: The iPad 3 with retina display had been released just a couple of weeks before the quarter started, and it was also just a few weeks after the introduction of a cheaper entry level iPad at $399 (the iPad 2) This year we had an iPad line up that was already 6 months old coming into the quarter and almost 9 months old at quarter end (of course) so the presence of a hot new product was absent, and this year there might even be a tiny amount of lost sales due to some now waiting for the iPad 5 & iPad mini 2. But to offset that we likely had organic growth within the tablet market and of course the availability of the popular iPad mini at $329 will add sales. Will the lack of a new model introduction this quarter be more than offset by the positive factors of the iPad mini? I'm picking only slightly, which is why I'm only at 18 million units. However if I'm wrong and iPads come in significantly above my estimate, then I guess my already quite high $8.11 EPS is only going to go higher, so on this occasion I will be pleased to be wrong (the more wrong I am the better!). Specific unit sales numbers are not important. What is important is recognizing that Apple is going to sell some quantity, of some product mix, that totals implied revenue (guidance+). As an exercise its fun to argue unit sales, but knowing does not improve revenue estimates. For that we have PO's guidance, and guidance to actual history, to calculate implied revenue expectations.
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Post by Deleted on Jul 3, 2013 18:43:40 GMT -8
Burgess, that's not an estimate actually. That's an "estimate" designed to fit within Oppenheimer's revenue guidance. Which is the way I feel it should be done.
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Post by Deleted on Jul 3, 2013 20:03:36 GMT -8
What revs number do you have? One troubling range that can't be dismissed out of hand: Apple is providing the following guidance for its fiscal 2013 third quarter: Since PO changed guidance metrics Apple has beat low end of guidance by the following percentages: FQ3/2012 3.01% FQ4/2012 5.78% FQ1/2013 4.83% FQ2/2013 6.35% Note that $35.5 billion is 6% (actually 5.97% but whose counting?) higher than $33.5 billion. I think PO expects Apple to generate revenue 6% higher than the range low. Expressed another way, I think PO expects revenue of $35.5 billion, and gave Apple a 6% cushion ($33.5 billion) just in case. That means that in only FQ2/2013 did Apple beat expectations, but its performance is improving. Expecting revenue $1.4 billion above the range high represents a 10% beat. I find that highly unlikely. Apple gave a $2 billion revenue guidance range last quarter, and also gave a $2 billion guidance range this quarter as well despite the expected revenue being $5 billion less, so I don't think there is any sort of % cushion built into it - its just a $2 billion buffer. Using Unit & ASP estimates did ok for me last quarter, providing a revenue estimate figure that was only 1% out from the actual reported revenue. I think the iTunes & accessories segments are also curiously quite low on the few estimates I've seen for Q3, whereas last year from Q2 -> Q3 there was a sequential increase in revenue - this year for some reason most are expecting large sequential drops for both.
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Post by Deleted on Jul 4, 2013 18:14:37 GMT -8
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Mav
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Post by Mav on Jul 4, 2013 20:39:21 GMT -8
Look out below if Apple turned in 10% YOY growth on iPads. Hmm.
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Post by Deleted on Jul 4, 2013 20:47:35 GMT -8
Look out below if Apple turned in 10% YOY growth on iPads. Hmm. It should be said that there are a couple of uber bears on Braeburn who will have dragged all the combined estimate numbers down a little. I think a 10% increase for iPads is probably fine if explained adequately as being due to the change in annual refresh cycles to fall. I'm wondering where the Pros will come in for iPads on PEDs analyst smack down prediction list, which should start this weekend probably.
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Mav
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Post by Mav on Jul 4, 2013 23:04:10 GMT -8
No IMHO - I think Oppeneimer would need (1) a sellthrough comparison excuse that (2) was adequately communicated AND understood by analysts/WS (that second part is never a sure thing). If anything I'm betting iPad is the stronger story - perhaps iPhone will "stagnate" briefly. I'm thinking Macs (Apr-Jun) did better than Braeburn suggests. MBA is probably the top seller - guess what, refresh in June. MBP retinas didn't exist last Apr-Jun and there is a little boost to the 13" rMBP due to the price drop. All Macs were fully available this quarter, vs. some supply constraint into fiscal Q2 (Jan-Mar). I'd better keep these notes for later in my earnings blog series.
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Post by rickag on Jul 5, 2013 4:17:17 GMT -8
If you don't mind my asking why do you have revenues exceeding the top end of guidance by $1.4 billion? I work from predicting unit sales and ASPs first and then work from there. Apple has always beat revenue guidance, even the recently provided guidance ranges, its just a question of by how much. $1.4 billion beat is less than 4% beat of the top guidance range. Thank you for the response and thanks to Mav for the input.
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Post by appledoc on Jul 5, 2013 4:18:18 GMT -8
Look out below if Apple turned in 10% YOY growth on iPads. Hmm. I thought 18.8M was too high. No new iPads since the fall, everyone waiting for the retina mini and YoY against a quarter that had the early life of the first retina iPad.
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Post by rickag on Jul 5, 2013 4:21:14 GMT -8
Anything below YOY eps will be used for a new round of FUD. ummm, no. Investors do not buy the past. They buy the future. Guidance is much more important than earnings. Somewhat correct. The market doesn't care how revenue is generated, as long as it is. Spot on. Well we agree on the most important point "guidance".
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Mav
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Post by Mav on Jul 5, 2013 8:29:37 GMT -8
Sorry appledoc, I forget, do you run a spreadsheet for earnings?
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Post by appledoc on Jul 5, 2013 9:20:49 GMT -8
Sorry appledoc, I forget, do you run a spreadsheet for earnings? Nope. Don't really have a need to since I refuse to ever play earnings again.
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Post by Deleted on Jul 6, 2013 8:34:57 GMT -8
Sorry appledoc, I forget, do you run a spreadsheet for earnings? Nope. Don't really have a need to since I refuse to ever play earnings again. I'd take a long look at Oct earnings. I think we'll have both earnings growth in October and strong guidance for the Dec quarter. That should fuel the kind of post earnings pop we're more accustomed to.
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Post by Deleted on Jul 7, 2013 0:58:20 GMT -8
Nope. Don't really have a need to since I refuse to ever play earnings again. I'd take a long look at Oct earnings. I think we'll have both earnings growth in October and strong guidance for the Dec quarter. That should fuel the kind of post earnings pop we're more accustomed to. Agree with you Gregg, I'm wondering if any Pros pick up on this potential for strong Q4 guidance before July earnings, I'm thinking yes. Presuming a September iPhone refresh, regardless of whether its one new model or two new models, Apple will undoubtedly be able to ship many more units into the channel before quarter end compared to last years constrained iPhone 5 launch. Its not even dependant on launch demand, because regardless of launch sales apple will be building channel inventory with every single unit it can crank out for impending Q4 demand.
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Post by Red Shirted Ensign on Jul 7, 2013 9:56:34 GMT -8
I'm now at 36 billion or a smidgen less on revs....$7.77 on earnings. It's been creeping up...
I am presuming net shares have been reduced by nine million....but am very curious to see what actually happened this quarter...there have been many chances to buy sub 405, which should be a godsend....
I hope revs don't disappoint.....
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Post by rickag on Jul 7, 2013 16:51:27 GMT -8
Mav
Nice article you penned on your blog about OpEx. Thanks for the research.
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Mav
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Post by Mav on Jul 7, 2013 17:08:26 GMT -8
Thanks. At the end of the day, OpEx was bugging me, so I just looked back a couple years in search of an answer, which for now appears to be more prosaic than I'd originally thought.
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Post by Deleted on Jul 10, 2013 2:54:58 GMT -8
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Post by rickag on Jul 10, 2013 4:45:24 GMT -8
As many here have pointed out guidance will dictate the direction of AAPL.
I am really trying hard to wait and see where guidance will be, AAPL below a P/E 10 and below is so damn tempting.
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Post by Deleted on Jul 10, 2013 12:03:55 GMT -8
As many here have pointed out guidance will dictate the direction of AAPL. I am really trying hard to wait and see where guidance will be, AAPL below a P/E 10 and below is so damn tempting. Unless iPhone sales are cratering (and all usage stats & market surveys suggest otherwise), the risk reward ratio seems rather favourable at present. Any downside risk seems far outweighed by upside potential (in my opinion at least)
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Mav
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Post by Mav on Jul 22, 2013 15:04:35 GMT -8
One last hurrah for estimates topics? Hm. Anyway, if you've got 'em, post 'em here! If they're buried in the weekend thread, _re-post_ 'em here. Mine are: Revenues: $36.2B EPS: $7.67 GM – 36.5% OpEx – $3.85B Tax rate – 26% (same as Apple guidance) Outstanding shares – 936M (assuming a net share reduction of about 11M) iPhone – 29.5M sold @ $585 “ASP” (about 13% YOY unit growth) iPad – 17.25M sold @ $430 ASP (about 1% YOY unit growth) Mac – 4.1M sold @ $1310 ASP (2% YOY growth) iPod – 5.25M sold @ $160 ASP (-22% YOY growth) iTunes/software – $3.84B (assumes ~ 20% YOY growth rate) Accessories – about $1.472B (assumes ~ 20% YOY growth rate)
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Post by prazan on Jul 22, 2013 18:44:28 GMT -8
Thanks for the estimates! My spreadsheet looks like my lawn. Gone to seed. So I really appreciate seeing your view on things. Braeburn estimates are so all over the map, and in past quarters my view has aligned with Mav's and Red's, so thanks for doing all the work!
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Mav
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Post by Mav on Jul 22, 2013 18:45:19 GMT -8
You have estimates too, right prazan? Post 'em here!
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Post by prazan on Jul 22, 2013 19:31:39 GMT -8
You have estimates too, right prazan? Post 'em here! You're just rubbing it in, aren't you? Take a look again at the post above. If I had estimates this Q, I'd share them.
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Mav
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Post by Mav on Jul 22, 2013 20:11:47 GMT -8
No, I might just be ignorant.
Upon further reflection, I _do_ see how parenting and life might get the way of that Excel spreadsheet. ;D
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Post by Red Shirted Ensign on Jul 23, 2013 15:05:01 GMT -8
Mav, you had the wrong Boeing model...It wasn't the 767, it turned out to be the 747...
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Mav
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Post by Mav on Jul 23, 2013 15:49:21 GMT -8
Har har.
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