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Post by dreamRaj on Dec 19, 2013 14:07:00 GMT -8
So if I'm understanding you Artman - you think Apple issued a guidance reiteration to stop any expectations of an earnings blowout. One way to interpret that: if apple doesn't issue a guidance reiteration before earnings, then a unexpected earnings blowout is one possibility (as would simply meeting guidance). I agree with Artman on why that reiteration happened. Keeping expectations in line. I also think that there is no way Apple keeps quiet about an unexpected earnings blowout. They have worked too hard to force Wall Street to think properly about the company to let that happen. I think they even modulate channel inventory if necessary to report in-line with expectations. Bingo!
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Mav
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Post by Mav on Dec 19, 2013 14:13:18 GMT -8
Yes and no.
They won't do it "deliberately" - because it'd be too "obvious"/potentially hurt a future quarter - but they do have considerable wiggle room. 4-6 weeks after all.
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Post by archibaldtuttle on Dec 19, 2013 14:51:49 GMT -8
Didn't launch CM partnership in September/October/November, it must be coming in Decem-- I mean January! Didn't raise guidance in a monster quarter? It must be because they are intentionally pushing sales to the following quarter!
You know, sometimes it's not bad to consider the bear case, or even the Occam's razor simple case... Maybe there won't be a deal with China Mobile. Maybe Apple needs to fire on all cylinders with perfect design and execution simply to meet the gargantuan quarterly earnings precedents, let alone exceed them...
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chinacat
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Post by chinacat on Dec 19, 2013 15:06:48 GMT -8
Apologies for disrupting the "All-CM, All The Time!" programming, but... This article, "Apple’s iPhone 5c Did Its Job Well," makes the point that the 5c was actually an attack on two fronts. First, by widening the perceived gap between the top two tiers of the iPhone lineup, it has pushed a larger percentage of buyers to the top tier, which certainly seems to be true so far. Second, those who do choose the second tier generate greater gross margins than under the old strategy. We now return you to your regularly scheduled China Mobile programming.
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Post by Deleted on Dec 19, 2013 15:26:12 GMT -8
Apologies for disrupting the "All-CM, All The Time!" programming, but... This article, "Apple’s iPhone 5c Did Its Job Well," makes the point that the 5c was actually an attack on two fronts. First, by widening the perceived gap between the top two tiers of the iPhone lineup, it has pushed a larger percentage of buyers to the top tier, which certainly seems to be true so far. Second, those who do choose the second tier generate greater gross margins than under the old strategy. We now return you to your regularly scheduled China Mobile programming. Not only that, the 5C is more DURABLE, susceptible to fewer returns from nicks, scratches and blems. Combine this with lower BOM and we have higher GM. I like the 5C, but I opted for 5S Black and 5S Gold, because Gold is Best, Best, Best!
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Post by Deleted on Dec 19, 2013 15:31:32 GMT -8
As a matter of opinion, I can get to $60B+ in sales without drinking something poured by Sponge.
CM would have given Tim added incentive to revise guidance: 1. Defuse wild expectations and 2. $58B + in revenues.
But the way AAPL is trading, who the F knows. Last Friday's subpar performance suggests WS knew CM was still flirting with Apple. This week, it's the pin, buffeted by CM's official "No, I'm not ready to date"
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Post by Red Shirted Ensign on Dec 19, 2013 15:37:21 GMT -8
Apologies for disrupting the "All-CM, All The Time!" programming, but... This article, "Apple’s iPhone 5c Did Its Job Well," makes the point that the 5c was actually an attack on two fronts. First, by widening the perceived gap between the top two tiers of the iPhone lineup, it has pushed a larger percentage of buyers to the top tier, which certainly seems to be true so far. Second, those who do choose the second tier generate greater gross margins than under the old strategy. We now return you to your regularly scheduled China Mobile programming. Not only that, the 5C is more DURABLE, susceptible to fewer returns from nicks, scratches and blems. Combine this with lower BOM and we have higher GM. I like the 5C, but I opted for 5S Black and 5S Gold, because Gold is Best, Best, Best! It's not black....its Space Gray........like this....
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Post by Red Shirted Ensign on Dec 19, 2013 15:41:26 GMT -8
As a matter of opinion, I can get to $60B+ in sales without drinking something poured by Sponge. CM would have given Tim added incentive to revise guidance: 1. Defuse wild expectations and 2. $58B + in revenues. But the way AAPL is trading, who the F knows. Last Friday's subpar performance suggests WS knew CM was still flirting with Apple. This week, it's the pin, buffeted by CM's official "No, I'm not ready to date" You should know the feeling...found this shot of you....
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Post by Red Shirted Ensign on Dec 19, 2013 15:46:02 GMT -8
Apple continues to sell massive amounts of product at every level. My neighborhood Apple Store representatives (several of whom are multi year vets of the Christmas season) say that this year is better...because every product is fresh and supplies are plentiful.....nobody walks out disappointed. No rain checks....This includes Macs which, after last year's Imac goofup, is refreshing....
CM or no CM, revenues will be very, very good based on just what we know and what can be deduced from marketing surveys and, yes, analyst checks.....
GMs? can't be bad. Simply can't be at the low end of guidance. Product mix and supply won't support such a finding.
A lot of product gets opened on Christmas Eve and Christmas Day, with downloads following shortly thereafter...
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Post by Deleted on Dec 19, 2013 16:04:40 GMT -8
As a matter of opinion, I can get to $60B+ in sales without drinking something poured by Sponge. CM would have given Tim added incentive to revise guidance: 1. Defuse wild expectations and 2. $58B + in revenues. But the way AAPL is trading, who the F knows. Last Friday's subpar performance suggests WS knew CM was still flirting with Apple. This week, it's the pin, buffeted by CM's official "No, I'm not ready to date" You should know the feeling...found this shot of you.... Red, You know I'm not shorter than my paramours. Shame on you. You offend me. The Pin is In tomorrow. $545 - $550, pending updated OI this evening and CM confirmation of a deal with Apple ;D
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Mav
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Post by Mav on Dec 19, 2013 16:11:45 GMT -8
You're dual-wielding 5Ses, Mercel? #poweruser #one5Sisenoughforme
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Post by Red Shirted Ensign on Dec 19, 2013 16:20:28 GMT -8
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Mav
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Post by Mav on Dec 19, 2013 16:45:09 GMT -8
Too bad Mac Pro has very little sentiment impact on AAPL, IMHO.
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Post by Red Shirted Ensign on Dec 19, 2013 16:56:11 GMT -8
Too bad Mac Pro has very little sentiment impact on AAPL, IMHO. Well, this stock is simply unloved. The current quarter will set all kinds of records for profitability, not just by Apple, or a tech company, but by virtually any public company. We will return to growth YOY on both revenues AND earnings...but, alas, Amazon is so much sexier, Google has robots that run down the street, Netflix has House of Cards, and Priceline has Shatner...how to compete with that.
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Post by archibaldtuttle on Dec 19, 2013 16:56:52 GMT -8
The only thing that's gonna continue the uptrend is the elusive CM deal, which could come any day, or never.
Otherwise, I could see a slide down to $500 for a January pin, then a bump back up on good Jan earnings and guidance.
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Post by sponge on Dec 19, 2013 17:58:28 GMT -8
We hit 575 this month. I expect that number again in January with an extra $20 for good measures before earnings.
I agree regarding revision guidance announcement. I see $58.6Billion with no revision. Anything above that will require one. They beat top end by that amount in 2nd quarter and there was not a revision.
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Post by Deleted on Dec 19, 2013 18:06:06 GMT -8
One iPhone for bidness and one for pleasure, or one for each ear.
No Mac Pro on the floor of Apple Retail to get the white glove inspection. All the early reviews make we want one.
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Post by Deleted on Dec 19, 2013 18:34:28 GMT -8
Revenue for the quarter was $37.5 billion (The difference with upper guidance was $500 million OR 1 million iPhones). I think OPPIE nailed it. In total we expect revenue to be between $55 billion and $58 billion compared to $54.5 billion in the year ago quarter. We expect gross margins to be between 36.5% and 37.5%GUIDANCE must be believed. Until HE changes it. Apple guided 34 - 37B for the Sept quarter in July on the June earnings call. That it reported 9M iPhones at the same time gave Apple an added reason to curtail expectations, but nonetheless, it exceeded guided revenues. Nailing guidance would have been 35.5B, not 37.5B Apple guides in a range. I do not find it surprising that Apple tends to report at the high end of the stated range. The lower of the range is to provide some downside cushion should Apple miss the higher of the range. For the six quarters since Apple commenced using the new Guidance format, results have exceeded the lower range (Revenue) by an AVERAGE of 5.93%, which, not surprisingly, is nearly spot on the higher end of the range. This does not mean that Apple will not exceed the upper range of Guidance. It is just unlikely that Apple will do so. In the aforementioned 6 quarters Apple has exceeded the upper range twice, once by $603 million, and once by $472 million. In both cases Apple did not change its previously stated Guidange range, electing instead to reaffirm the range. Reports of short supply of iPhones has many thinking Apple will blow out its Guidance. I don't agree with that logic (although, like some, I am having trouble getting my forecast model to fit within Apple's Guidance). Going from ~34 million iPhones in FQ4 to ~57 million in FQ1 is a huge jump upward. In that environment you are going to have a prolonged period of supply/demand imbalance. That imbalance does not mean that Apple is going to exceed its Guidance. You cannot make that leap in logic with the data available. PERIOD. Given Apple's record of the past 6 quarters I do not feel one can question management's Guidance. Further, some feel that Apple does not include new products/carrier deals, etc., in its Guidance. Wrong. Those events are material to Apple's performance and most certainly would be included. Lastly, given the logistics required to furnish a new carrier with stock, any new carrier deal will precede announcement/launch by up to 6 months. The CM agreement is a done deal having been formalized last August when TC was in China. CM will not come on line until production capacity can handle the increase in demand. This is Supply Chain management in the extreme, and very, very few are as good at that as TC.
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Post by Deleted on Dec 19, 2013 18:54:10 GMT -8
I disagree.
By your reasoning, if CM came on board in early November, Apple would have guided, for example, $62B + revenues. At the time of CM's announcement in Nov, all the analysts go, whoa, it's now $65B. Apple launches are STRATEGIC, and they're not going to pre announce products or launches in guidance! There is NO history of that. None.
Apple started guiding a range with additional precision for only the most recent 4 quarters, not 6.
Apple knows its production better than demand. A range of $3B for revenues is relatively narrow (one-half of 1 percent!) and given that Apple significantly raised the bar this time with a full slate of new products makes it entirely possible its guidance will prove conservative.
Finally, the iPhone bar is from 48M for Dec 12 to 58M (21%) for Dec. 13. This is a smaller increase sequentially than between Dec 11 of 37M iPhones to 48M (30%) for Dec 12. Plus the fact the launch was bigger (e.g. Docomo) this Dec quarter and earlier.
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Post by Deleted on Dec 19, 2013 19:00:27 GMT -8
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Post by Deleted on Dec 19, 2013 19:05:50 GMT -8
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Post by gtrplyr on Dec 19, 2013 19:22:19 GMT -8
Shortage .... Apple is DOOOOOMMMMED !!! ;D
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Post by Deleted on Dec 19, 2013 19:27:18 GMT -8
Shortage .... Apple is DOOOOOMMMMED !!! ;D Yep. And more proof: The opening page on www.apple.com features a photo that is OOF! It's really bugging me.
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Post by Deleted on Dec 19, 2013 19:31:54 GMT -8
I disagree. By your reasoning, if CM came on board in early November, Apple would have guided, for example, $62B + revenues. That's correct. No. They understand that nothing was announced. The alleged "announcement" was pictures of posters and signage. This isn't, and never has been, Apple's modus operandi I will agree with you to the extent that Apple does not announce products during the conference call. The revenue from those products is another matter. Consider that, after announcing a new product, Apple has never revised its Guidance. Wrong. Apple changed its Guidance format in April 2012 for the June quarter 2012, results announced in July. FQ2/2012 Revenue beat Guidance by 20.57%. FQ3/2012 Revenue beat Guidance by 3.1%. Results have beat Guidance (lower of range when given) by an average of 5.93% since then. Prior to July earnings 2012 Revenue results beat Guidance by an average of 18.2%. $3B is 0.5% of $600,000,000,000. Apple has never guided that high (wouldn't mind seeing it). On the other hand, the difference between $55 billion and $58 billion ($3 billion) is 5.556% of $54 billion. That is true if the perception of the increase were based on YoY comparisons. They aren't. Bloggers are making their claims of blow out numbers based on their most recent experience (FQ4/2012).
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Mav
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Post by Mav on Dec 19, 2013 19:38:02 GMT -8
Well, Mercel did make a minor math error on the guidance range. Happens to the best of us. As far as iPhone - the compare is YOY. I don't care if bloggers don't get it. WS _does_. Now if Apple does that sequential goalpost-switching deal from fiscal Q1 2013, I'll be a bit worried. Let's be factual on guidance. Never mind beat factor or whatever, actual methodology according to Oppenheimer did not change until fiscal Q1 2013 or so.
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Mav
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Post by Mav on Dec 19, 2013 19:39:54 GMT -8
Would be nice to be able to quantify that. Not counting on Apple to provide any color on that, at all. The only hint we'll likely have is the effect Mac Pros are almost certain to have on Mac "ASP". It doesn't take _too_ many sales to move combined ASP up $50 or more...
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Post by Deleted on Dec 19, 2013 20:03:01 GMT -8
Well, Mercel did make a minor math error on the guidance range. Happens to the best of us. Yes it does. Oppenheimer made a point of the change during the January conference call, for those that weren't getting it. Too many "analysts" (myself included) were still using the old format, and were forecasting way to high as a result. Guidance to Results DeltaFY2010 FQ2 20.54% FQ3 18.94% FQ4 13.00% AVERAGE 17.49% FY2011 FQ1 16.27% FQ2 12.12% FQ3 24.22% FQ4 13.08% AVERAGE 16.42% FY2012 FQ1 25.22% FQ2 20.57% Pre-change AVERAGE 22.89% FQ3 3.01% FQ4 5.78% Post change AVERAGE 4.39% (~75% drop from AVERAGE delta) FY2013 FQ1 4.83% FQ2 6.35% FQ3 5.37% FQ4 10.21% AVERAGE 6.69% Moments after the FQ1/2013 results PR was made, and fully a half hour before PO discussed the change, I posted that management had changed its guidance format. That statement was based on a thrice observed results to guidance % decline to the low to mid single digits. I was correct then, and I'm correct now.
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Post by Deleted on Dec 19, 2013 20:47:33 GMT -8
I would like to point out that beating management's top Revenue Guidance for FQ1/2014 by $1 billion ($59 billion results vs $58 billion Guidance) would entail a beat of the low of the Guidance range of 7.78%. A beat of this magnitude is not without precedent. Note the FQ4/2013 beat % in my previous post.
$1 billion in Revenue equals about 1.7 million iPhones, or about 2.2 million iPads, or about 800K Macs, or some combination of all 3.
Underestimating top end Revenue by $1 billion represents an error of about 1.7%.
This is a thought exercise, and should not be viewed as an argument that a Guidance beat of this degree, should be expected.
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Post by Deleted on Dec 19, 2013 20:49:40 GMT -8
When does discussion of what to expect for FQ2/2014 start? Discussing FQ1 is nice, but the future of AAPL will be in management's Guidance for FQ2.
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Mav
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Post by Mav on Dec 19, 2013 21:00:33 GMT -8
You're free to start a discussion in Apple Fundamentals. I'm not much of a forecaster so I can't think that far ahead in specific revs/EPS terms at this point in time.
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