Mav
Member
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Posts: 10,784
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Post by Mav on Nov 13, 2012 21:07:59 GMT -8
My thinking is a tougher mix on iPad minis, iPhone 5 with attendant start up costs..... You were always good with GM...so what's the number? I've dropped my GM in three product categories. Also, I'm estimating 55M iPhones and still tipping over 40%. Oppie lowballed both sales and GM and the added iPhones missing in the sales # will push us over the top. Not sure if Sammy's recent blackmail on the processors was news before or after the earnings call. Nonetheless, I think it's worth around .5% overall to GM if the impact is felt FQ1 13. FWIW. Futures are green. Mercel's at 40.5%. It's a heads-Apple-wins, tails-the-competition-loses situation, Ensign, like I said: (1) iPhone 5 leads the way to 52B revs (and change) with a GM mix to Rule Them Allâ„¢. (2) iPad mini makes like a Higgs boson and accelerates its way to huge sales (ending the post-PC competition era in an instant), which somewhat lowers GM but boosts revs. (3) Both happen (quarter lands perfectly on its edge), and we dare to dream of a fiscal quarter approaching $60B?! I'm not buying the Samsung processor payup article until I hear corroboration from a WSJ/NYT-class source. Apple buys in guaranteed production batches and prepays in billions upon billions at a time, and IIRC they often include capital equipment funding as part of the deal. It would take a truly extraordinary situation for Apple to be forced to pay significantly more than the agreed-upon price.
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Post by mbeauch on Nov 13, 2012 21:15:42 GMT -8
One thing for sure, it will be over 38, the question is, by how much. If you use Apples 52 billion and a 39 GM it gives you about the same results as last years Q1. If you look at a higher OI&E the EPS the results are within a small margin of error.
HELLO, this is using Apple's revenue number. HA HA. Using 57 billion, my guestimate, gives us $15 EPS which should be considered very good using normalized earnings. Product mix is the key. if 32-33 billion of the 57b is at a 50% GM, the rest does not really matter. (IMO Apple does not sell anything for less that a 30% GM)
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jz
Member
"Study the natural order of things and work with it rather than against it." -- Lao Tsu
Posts: 162
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Post by jz on Nov 13, 2012 22:14:14 GMT -8
Here's another chart for gross margin: Guided (blue) and Actual (red). I think Apple is sandbagging GM this holiday quarter, FQ1 2013. I'm hopeful for 40.5, which would STILL be 420 basis points lower than FQ1 2012. Dial in 55M iPhones and it will be easier to beat Apple's sandbag. I think Mercel's AFB return heralds an AAPL ascent... Here, here! We we just talking about you last week, Mercel... Glad to see you and your charts!
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jz
Member
"Study the natural order of things and work with it rather than against it." -- Lao Tsu
Posts: 162
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Post by jz on Nov 13, 2012 22:39:08 GMT -8
Pain range, now 545-549.99, Stk Calls Puts 530 1,490 9,985 535 2,286 8,625 540 5,272 10,859 545 6,262 8,824 550 13,828 12,335 555 8,779 7,109 560 14,138 7,316 565 9,782 5,225 Sup, Mercel? JD, I'm glad to see you're still using the best TA out there. Travis tweeted earlier today that he's predicting AAPL at $630 in Jan. If the option writers bought back the calls they raped us with in September for pennies on the dollar, then the EO can make MORE money by running AAPL into Jan earnings. That call wall at $650 in Jan. means less if the option writers have locked in their gains Oct - Nov. Buying should return if it plays out this way. And past $630 too. Yes! I was thinking similar. And hoping so. I know this board is ready for some UP!
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Post by Zeke on Nov 13, 2012 22:39:55 GMT -8
Hi Lovey and Chas! I guess I flunked lurking.... ;D The coiled spring is dangerous...there's so much pent up energy in that damn spring I'm scared of it. Good to see you.
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Post by Zeke on Nov 13, 2012 22:47:19 GMT -8
You can find an article about Cooperman in the Oct. 8 issue of the New Yorker. Beware though: it's a political article about his political donations. I love Best in Show. Brilliant faux-documentary. I spent a little time with Fred Willard in a bookstore once upon a time. He's not like the characters he plays, at least not when talking to someone he just met, which is a good thing. His "do you know they eat those in Korea" routine makes me laugh every time I watch it. My ex was a show cat person. Now I raise registered hunting dogs. "Best in Show" is even funnier when you know it's completely accurate and not exaggerated at all.
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mark
fire starter
Posts: 1,552
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Post by mark on Nov 13, 2012 22:47:36 GMT -8
(2) iPad mini makes like a Higgs boson and accelerates its way to huge sales (ending the post-PC competition era in an instant), which somewhat lowers GM but boosts revs. Would be delightful, however, every iPad displaced by an iPad mini changes that sale in 2 ways: a. Reduces the total revenue by close to 1/2. b. Results in a margin of 25% (or whatever) instead of 35%. That means that gross profit is less than half of what it would have been for that particular sale.
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Post by Zeke on Nov 13, 2012 22:49:49 GMT -8
Here's another chart for gross margin: Guided (blue) and Actual (red). I think Apple is sandbagging GM this holiday quarter, FQ1 2013. I'm hopeful for 40.5, which would STILL be 420 basis points lower than FQ1 2012. Dial in 55M iPhones and it will be easier to beat Apple's sandbag. Great Chart, thanks for sharing! (and welcome!) I wonder if the appropriate quarter to compare margins to would be Q12011, which was the first big selling quarter for the new iPhone 4 form factor. Apple beat its guidance by 2.5% on that occasion. Q12012 was the iphone 4S launch - which shouldn't be compared to the iPhone 5, as the iphone 4S was the same form factor as the 4 - the 4S required very little in the way of new production tooling and there was no learning curves getting production ramped fast. Interestingly Apple has guided the same for Q12013 as it did for Q12011. (36%) This what I was saying a few days ago. A return to Q1 2011 GMs may not be great news, but it's not the beginning of the end for AAPL, as was being touted by CNBC. I suspect we will bounce around in this range depending on product timing and mix.
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JDSoCal
Member
Aspiring oligarch
Posts: 4,182
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Post by JDSoCal on Nov 13, 2012 22:52:30 GMT -8
Pain range, now 545-549.99, Stk Calls Puts 530 1,490 9,985 535 2,286 8,625 540 5,272 10,859 545 6,262 8,824 550 13,828 12,335 555 8,779 7,109 560 14,138 7,316 565 9,782 5,225 Sup, Mercel? JD, I'm glad to see you're still using the best TA out there. Travis tweeted earlier today that he's predicting AAPL at $630 in Jan. If the option writers bought back the calls they raped us with in September for pennies on the dollar, then the EO can make MORE money by running AAPL into Jan earnings. That call wall at $650 in Jan. means less if the option writers have locked in their gains Oct - Nov. Buying should return if it plays out this way. And past $630 too. All I need is 600+ in Jan, and 700+ in April. I agree, sandbagging. But damn, the assholes market didn't like TC having the temerity to threaten to make $52B in 90 days.
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Post by Red Shirted Ensign on Nov 13, 2012 23:02:57 GMT -8
That remains the BIG takeaway. 52 billion GUIDANCE....which means 56 billion in revs is darn near certain.....probably lots more. TC speaks code to Wall Street now fluently.. ( remember "100 million iPads two weeks ago, cough, cough"). Oppy said he was "pleased" to guide to 52 billion in revs..... Can I get a "cough,cough". Please....
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Post by kloot on Nov 13, 2012 23:22:14 GMT -8
I thought QE3 started in September. You are right -- I am confusing myself! QE3 = $40B monthly purchase of mortgage bonds. Now for some reason (not sure if I read this or dreamed it), I thought that hit this week... the settlements do begin wed (14th). somewhere I read because its MBS, it takes longer (eg until now) for the money to start sloshing around the system.
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Post by bloodylongaapl on Nov 14, 2012 1:16:04 GMT -8
Here's another chart for gross margin: Guided (blue) and Actual (red). I think Apple is sandbagging GM this holiday quarter, FQ1 2013. I'm hopeful for 40.5, which would STILL be 420 basis points lower than FQ1 2012. Dial in 55M iPhones and it will be easier to beat Apple's sandbag. Looking at this pessimistically. Q1 2011 saw the same EPS guidance of 36% and a beat of 2.5%. iPhone 4 was launched in JUNE that year so cost curve was already in action, and there was no such dramatic refresh of products, and no iPad mini. Leads me to believe we might be looking at around 38-39% this Q. I think shouts of 40% or thereabouts are going to lead to more pain come January. I just don't see it happening.
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Post by macoz on Nov 14, 2012 3:27:38 GMT -8
I think we have to be careful about being too optimistic about GMs for this quarter. PO already warned us why GMs will be lower. Just to recap why GMs may be lower:
1) Unfavourable foreign exchange rates; and 2) Impact of deferred revenues on iPad mini sales.
Let me elaborate:
1) Unfavourable exchange rates
Over 60% of Apple's sales are from outside the USA. US$ has so far been strong this quarter. This means overseas sales when translated into US$ at quarter end results in an accounting loss in Revenues and GMs. Apple may well have hedged its exchange exposures. However hedges are taken into OI&E and not into Revenues and Gross margins.
2) Deferred revenues of iPad mini sales
Apple defers a certain portion of its revenues over the following two years and four years. The portion of deferred revenues range from $5 to $25. I think for IOS products the deferred portion is $11. I don't know what is the corresponding deferred cost. However from a review of the balance sheet I suspect it is less than 20% of the deferred revenue portion.
What this means is that the revenue from the sale of each IOS product must be reduced by $11. This means the GM of each IOS product is $11 less. This means the GM %tage is reduced. The GM on the iPad mini has to be quite low especially as it is a new product. If we were to reduce the GM by a further $11 the GM %tage will be even lower. What this means is the more iPad minis are sold the lower the GM %tage. This will ultimately impact the overall GM %tage. Of course Revenues and GMs will be increased by recognising one-eight of $11 of the IOS products sold in the past two years. This however is not enough to neutralise the impact of this quarter's Deferred revenue especially as iPad mini is only sold this quarter as basically is iPhone5.
i am confident that this quarter's Revenues will be well above guidance. i am not so confident that GM %tage will be up to historical highs. Let's not set ourselves up for a disappointment.
JMHO.
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