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Post by Deleted on Feb 3, 2013 13:43:12 GMT -8
So apple provided a range for Revenue & GM%, but how are people treating the exact guidance for OI&E and Tax guidance?
Obviously apple isn't going to come in exactly with those guidance figures, what's everyone's variance for them?
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Mav
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Post by Mav on Feb 3, 2013 13:58:26 GMT -8
"Don't care."
Won't make much of a difference. Those data points are generally pretty accurate, so I just take them as is.
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Post by Apple II+ on Feb 4, 2013 13:32:28 GMT -8
A little crowdsourcing homework if anyone cares to look into it: As many here may already know, this isn't the first time Apple's issued range guidance, it was just under different macro circumstances. Range guidance has mostly been for revenue and earnings in the past 9 years. It has been very rare for Apple to guide a range for GM (Q1 F2009) and OpEx (Q1 F2007 and Q1 F2009). Looking at revenue and earnings, Apple beat the top end of the range in almost every case. The one non-beat I found was revenue of 4.37B for Q3 F2006 vs. guidance of 4.2-4.4. For revenue and earnings, range guidance was given for these quarters: Q1 F2005, Q3 F2006 through Q2 F2007, Q1 F2009 through Q3 F2010. Range guidance was also given for earnings for Q2-Q4 F2004. Some of this guidance data is from conference call transcripts available on Seeking Alpha back through F2006 and some of it is from press releases filed in quarterly 8-Ks.
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Mav
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Post by Mav on Feb 4, 2013 13:38:49 GMT -8
Awesome.
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Post by Apple II+ on Feb 4, 2013 14:45:18 GMT -8
iPhone 5 supply was short of demand until late in the quarter and iPhone 4 was short of demand the entire quarter, yet ending iPhone channel inventory of 10.6 million is within Apple's target of 4-6 weeks. Because of the short supply most of the quarter, I'm guessing that they were just within that 4-6 week target, so I'm putting the weekly channel rate at 2.65 million. 2.65 x 13 weeks is 34.45 million iPhones through the indirect channel. Anybody have a theory on how many iPhones are sold through the direct vs. indirect channels?
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Post by Apple II+ on Feb 4, 2013 15:13:55 GMT -8
Q2 ESTIMATE BASED ON APPLE GUIDANCE Assumes high range of guidance: $43B in revenues, 38.5% GM COGS: 26,439 GROSS MARGIN: 16,551 GM%: 38.5% OPEX: 3,850 OPINC: 12,701 O I/E: 350 PRETAX: 13,051 TAX: 3,393 NET INC: 9,658 SHARES: 947K EPS: $10.20 The EPS is higher than the high end of Mav's estimated range, so I welcome the board to look at the numbers and point out any miscalculations. The product line sales estimates in the previous post were used to hit the gross revenue number, and are subject to revision. But it's hard to hit $43 billion with YoY growth in iPhones, and continued growth in iPads. My number is close to yours. The main differences are that I have a GM of 16555 and to get the max EPS I use the low end of OpEx of 3800, which yields an EPS of 10.24.
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Post by Deleted on Feb 4, 2013 15:28:39 GMT -8
iPhone 5 supply was short of demand until late in the quarter and iPhone 4 was short of demand the entire quarter, yet ending iPhone channel inventory of 10.6 million is within Apple's target of 4-6 weeks. Because of the short supply most of the quarter, I'm guessing that they were just within that 4-6 week target, so I'm putting the weekly channel rate at 2.65 million. 2.65 x 13 weeks is 34.45 million iPhones through the indirect channel. Anybody have a theory on how many iPhones are sold through the direct vs. indirect channels? Are you saying that Apple is going to report around that iPhone figure for Q2? That would correspond nicely with the conference call comments emphasising that they expect an increase on last years sell through number of 32 rather than the 35 figure shipped. It would also bring us in nicely around 43 billion in revenue. However that number of iPhones represents rather horrible growth from a year over year comparison
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Mav
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Post by Mav on Feb 4, 2013 15:45:08 GMT -8
Don't forget, Oppenheimer is trying to get analysts used to sellthrough comparisons.
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Post by Apple II+ on Feb 4, 2013 16:05:06 GMT -8
iPhone 5 supply was short of demand until late in the quarter and iPhone 4 was short of demand the entire quarter, yet ending iPhone channel inventory of 10.6 million is within Apple's target of 4-6 weeks. Because of the short supply most of the quarter, I'm guessing that they were just within that 4-6 week target, so I'm putting the weekly channel rate at 2.65 million. 2.65 x 13 weeks is 34.45 million iPhones through the indirect channel. Anybody have a theory on how many iPhones are sold through the direct vs. indirect channels? Are you saying that Apple is going to report around that iPhone figure for Q2? That would correspond nicely with the conference call comments emphasising that they expect an increase on last years sell through number of 32 rather than the 35 figure shipped. It would also bring us in nicely around 43 billion in revenue. However that number of iPhones represents rather horrible growth from a year over year comparison No. It's one theory on the number through the indirect channel. It would be that plus however many Apple sells throught the direct channel (retail, web, education, corporate, others?). My other theory on weeks of channel inventory is that it's the rate as of the start of the quarter and not a good guide to the whole quarter.
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Post by tuffett on Feb 4, 2013 17:38:00 GMT -8
I certainly hope we see 40M+ iPhones, or things are not going to be good.
Does anyone have a logical explanation as to why the iPhone 4 was in supply shortage for an entire quarter? Just makes no sense to me. Are they expecting to reach a balance soon? This could be a significant factor in total iPhone sales.
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Mav
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Post by Mav on Feb 4, 2013 17:47:57 GMT -8
Just because they said "constrained" doesn't mean they didn't have enough for everyone. It's that sell-through vs. sell-in that we really need to start focusing on going forward.
iPhone can be below the target channel inventory range and still have enough iPhones for whichever corporate or individual customer wants one. There's just less inventory "buffer" or "sell-in" if I understand it correctly.
Sell-through is the more "honest" number, the true measure of demand, and I want Apple to continuously educate analysts and investors about making sell-through to sell-through YOY/etc. comparisons moving forward.
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Post by Deleted on Feb 4, 2013 17:49:51 GMT -8
I certainly hope we see 40M+ iPhones, or things are not going to be good. Does anyone have a logical explanation as to why the iPhone 4 was in supply shortage for an entire quarter? Just makes no sense to me. Are they expecting to reach a balance soon? This could be a significant factor in total iPhone sales. It's the international pricing. Average prices in the international market for the iPhone 4 is $200 cheaper than the iPhone 4S. Apple actually sells it at a discount to the US price.
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Post by mbeauch on Feb 4, 2013 19:44:47 GMT -8
I certainly hope we see 40M+ iPhones, or things are not going to be good. Does anyone have a logical explanation as to why the iPhone 4 was in supply shortage for an entire quarter? Just makes no sense to me. Are they expecting to reach a balance soon? This could be a significant factor in total iPhone sales. I may be reaching, but my guess is that the display was the issue, hint, Samsung. I have ranted for years about Apple decoupling from Samsung, but Apple kept on thinking that it was just business. Samsung did not think that way. The list of reasons why AAPL is down is very long. I won't even begin to list them, but execution is one of them. I also go back to the verdict. Once it was announced I think Samsung decided the working relationship was going to get ugly on their part as retaliation. I will have to say that the SS commercial was not bad. Seemed like a break in style. I wonder if SS is rethinking its strategy. I know the guy responsible for the ads left SS and is now with Google. Will be interested to see what comes of it.
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Post by tuffett on Feb 4, 2013 20:34:01 GMT -8
Yeah. Samsung no longer needs to run attack ads on Apple because they have their own strong brand image now. Yes, they've been around for a long time but their brand has never been stronger. I have to say, initial copying aside, they have done a good job from a business perspective. Their new ad was fine, a typical mildly humourous Superbowl ad.
Back on topic.
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Mav
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Post by Mav on Feb 4, 2013 20:53:01 GMT -8
MB, these kinds of relationships are NOT of the type you can unwind right away. You buy supply, you buy production, you pay for the production facilities that produce the supply, billions over years...
Did Apple "choose wrong"? Everywhere Apple turned for componentry, it found a competitor. And hey, it's been this way for a long time. Samsung RAM and stuff?
Now, Apple's finally, realistically in a position to free itself from that dependency. Samsung is just being Samsung. It's been a diversified megacorp long before Apple started making big-time orders, and it's sold metric tons of handsets long before Apple came along.
Strange bedfellows and all the rest. In any case, the game is far from over.
And yes, let's get back on topic.
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Post by Apple II+ on Feb 5, 2013 5:38:22 GMT -8
Key quote on the direct vs. indirect channel from TC in Q3 F2012 earnings transcript:
"the channel inventory is only for the indirect channel. But, it’s not used for to support any direct sales, and direct sales are Apple retail sales, Apple online sales, Apple education sales. ... it’s the case with all products. I know that there are some companies out there they refer to their channel inventory in terms of their gross sales, but we don’t do that, because we feel very strongly that it only supports the channel sales, so that’s how we calculate it."
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Post by Apple II+ on Feb 5, 2013 7:07:21 GMT -8
Key quote on the direct vs. indirect channel from TC in Q3 F2012 earnings transcript: "the channel inventory is only for the indirect channel. But, it’s not used for to support any direct sales, and direct sales are Apple retail sales, Apple online sales, Apple education sales. ... it’s the case with all products. I know that there are some companies out there they refer to their channel inventory in terms of their gross sales, but we don’t do that, because we feel very strongly that it only supports the channel sales, so that’s how we calculate it." Another one from PO in the F2007 Q2 transcript: "direct sales, which we define as sales through the retail stores, online, direct to education and enterprise customers and through the music store, were 50% in the quarter and that was reasonably close to our expectations." That transcript also contained this from PO on iPhone specifically: "On the iPhone hand set the factors will relate to we're going to ship two models, one at $499, one at $599. We're going to sell some direct and we will sell some indirect." The question is, how many iPhones are direct vs. indirect over time?
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Mav
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Post by Mav on Mar 21, 2013 14:07:15 GMT -8
I'm starting to wonder if the "cash conference" or whatever Apple has planned in terms of dividends, buybacks, share split, whatever isn't being pushed off til earnings or right before earnings.
That...makes me nervous...
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Post by sponge on Mar 27, 2013 20:05:02 GMT -8
As for the details of this quarter, I'd like to begin with iPhone. We were very pleased to sell 47.8 million iPhones compared to 37 million in the year ago quarter, an increase of over 10 million iPhones.
This represents a rate of almost 3.7 million iPhones per week in the current year quarter compared to 2.6 million per week in the year ago quarter. That’s an average increase of 39% per week consistent with IDC’s latest published forecast for the global smartphone market in the December quarter.
So, the underlying sell-through was about 32.5 million and we would expect sell-through growth year-over-year as it has for – in the quarter as it has for many quarters in a row.
i expect at least 13.5% growth YOY based on the slow down in smartphone growth and OP statements. That is consistent with rumors about a decrease in supply orders.
Given then in 2nd quarter last year benefited because they were constrainted from 1st quarter, I expected similar affect but not as drastic because the iPhone 5 came out in 4th quarter. That translates to over 1.7 million iPads per week in the current year quarter compared to 1.1 million per week in the year ago quarter, an average increase of 60% per week, ahead of IDC’s latest published estimate of 56% growth for the tablet market.
Keith I’ll add to that you know for total iPad sales we’re not going to, we don’t provide a sublevel forecast but we would expect a large year-over-year increase in iPad sales but a post-holiday sequential decline for iPad sales which I think is typical and as Tim said we expect to be able to meet demand for the mini.
I expect at least a 50% growth in YOY in iPads based on the market continuing to expand.
They seem to rely on IDC numbers so I use that as my guide.
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Mav
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Post by Mav on Mar 27, 2013 20:27:30 GMT -8
So Oppenheimer basically said:
"We expect sell-through growth year over year, as usual."
"We expect iPads to have great YOY growth and negative sequential growth."
Not a lot of particularly useful or new info there. Especially with iPhone, he's boldly forecasting more than 32.5M iPhones in sellthrough terms. Which is difficult if not impossible to translate into sell-in terms, which Apple uses to report sales.
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Mav
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Post by Mav on Mar 31, 2013 21:47:42 GMT -8
Mini-poll: If Apple announces cash/share updates AT the earnings call, is it a good, bad or neutral thing?
I'm leaning bad - pessimistic, yes, but hey, people were thinking "annual update" for cash and March is behind us. The logical progression is, "if Apple's gonna bring it up at earnings, the results might not be so hot." It's consistent with Apple's shifting metrics last quarter, too.
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Post by Deleted on Mar 31, 2013 23:41:09 GMT -8
Mini-poll: If Apple announces cash/share updates AT the earnings call, is it a good, bad or neutral thing? I'm leaning bad - pessimistic, yes, but hey, people were thinking "annual update" for cash and March is behind us. The logical progression is, "if Apple's gonna bring it up at earnings, the results might not be so hot." It's consistent with Apple's shifting metrics last quarter, too. I'm now in the camp that dividend increases are probably planned to take place annually, but that might mean annual increases from the first initial August 2012 payment, rather than the initial March announcement. However I hope we don't have to wait to July earnings report, and would be delighted to see something at April earnings instead.
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Post by rickag on Apr 1, 2013 5:06:54 GMT -8
Mini-poll: If Apple announces cash/share updates AT the earnings call, is it a good, bad or neutral thing? I'm leaning bad - pessimistic, yes, but hey, people were thinking "annual update" for cash and March is behind us. The logical progression is, "if Apple's gonna bring it up at earnings, the results might not be so hot." It's consistent with Apple's shifting metrics last quarter, too. I believe if Apple does announce an increased dividend at earnings the perception whether or not it is positive rests entiry on reported earnings and guidance.
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Post by qualitywte on Apr 9, 2013 4:18:34 GMT -8
Anyone think we could be in for a surprise earnings blowout?
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Post by rickag on Apr 9, 2013 5:04:33 GMT -8
Anyone think we could be in for a surprise earnings blowout? I dream of it, hope for it, but don't think it. It is possible but Apple was clear in their guidance when they guided a range.
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Mav
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Post by Mav on Apr 9, 2013 8:53:37 GMT -8
No.
I'd love to be wrong. iPhone will surprise and delight or disappoint. 37M - consensus, 40M - optimistic target IMHO.
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Mav
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Post by Mav on Apr 16, 2013 19:35:08 GMT -8
One week away people! Final estimates and related discussion are welcome!
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Post by sponge on Apr 20, 2013 9:57:20 GMT -8
My eps number for 2nd quarter is 11.28.
Based on 4.3 Million macs, 39.6 million iPHones, 6.4 million iPods, 17.5 million iPads with 39.5 GM.
I made these estimates the day after earnings were announced in Jan and have not changed them since then.
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Mav
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Post by Mav on Apr 20, 2013 14:01:01 GMT -8
$43.2B revs, $10.43 EPS over here. 37.7M iPhones or bust.
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Post by Deleted on Apr 21, 2013 12:50:53 GMT -8
$43.2B revs, $10.43 EPS over here. 37.7M iPhones or bust. With my 43.05B rev estimate, is my Bull+ reputation at risk? Anyway, I'm giving it 36.5M iPhones and 10.81 EPS. Margin is probably the difference; Even at 39.6%, this is already 800 (!) basis points lighter than last March. I have to believe Apple will show margin improvement > 100 basis points since the December quarter (even with fewer iPhone sold). I think everyone is LOW on gross margin given the revenues posted at Apple 2.0.
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