Earnings preview: Wall Street expects Apple to impress
Expectations are high for Apple, set to report its fourth-quarter results Monday afternoon, as analysts believe the Mac maker will once again beat projections and defy the recession.
Analysts polled by Thomson Reuters Financial expect the hardware maker to report earnings of $1.42 per share, a 13 percent increase from the year-ago quarter and well above Apple's own projection of $1.18 to $1.23, according to The Wall Street Journal. Last year, Apple saw its fourth quarter profit rise 26 percent to $1.14 billion, or $1.126 per diluted share.
Apple is scheduled to report its earnings Monday at 2 p.m. pacific, 5 p.m. eastern.
During the last quarter, Apple unveiled new iPods at a September media event, including an iPod nano with video camera. But many analysts believe that market will continue to shrink, as consumers gravitate toward media-playing phones over standalone MP3 players. Analyst Mike Abramsky has predicted sales of 9.9 million iPods for the quarter, down 10 percent year over year, though the iPod touch is expected to be a strong seller based on access to the App Store.
Based on margins and explosive growth, the real driver of AAPL stock is the iPhone. Piper Jaffray analyst Gene Munster believes the company will have sold 7.5 million handsets during the September quarter. He, along with most others on Wall Street, expects the company's stock price to go well above $200 in the next 12 months.
With expectations so high, some have cautioned that Apple could disappoint with its earnings. Analyst Yair Reiner with Oppenheimer said in a note to investors last week that supply constraints of the iPhone 3GS due to high demand could lead to fewer handset sales than are expected. He views December as a "catch-up quarter," when Apple could easily sell more than 8 million iPhones.
Mac sales are predicted to be at a record setting pace, with analysts forecasting around 2.8 million in sales for the fourth quarter. If accurate, that would be the company's best-ever frame, topping a year ago when it sold 2.6 million Macs during the September 2008 quarter. Those sales, along with 6.5 million iPhones, helped the company's profits rise 26 percent year-over-year.
Looking ahead, analysts already expect December earnings of $1.91 per share, according to Thomson Reuters. They also expect Apple, which traditionally gives very conservative guidance, to forecast $1.68 per share.
Analysts polled by Thomson Reuters Financial expect the hardware maker to report earnings of $1.42 per share, a 13 percent increase from the year-ago quarter and well above Apple's own projection of $1.18 to $1.23, according to The Wall Street Journal. Last year, Apple saw its fourth quarter profit rise 26 percent to $1.14 billion, or $1.126 per diluted share.
Apple is scheduled to report its earnings Monday at 2 p.m. pacific, 5 p.m. eastern.
During the last quarter, Apple unveiled new iPods at a September media event, including an iPod nano with video camera. But many analysts believe that market will continue to shrink, as consumers gravitate toward media-playing phones over standalone MP3 players. Analyst Mike Abramsky has predicted sales of 9.9 million iPods for the quarter, down 10 percent year over year, though the iPod touch is expected to be a strong seller based on access to the App Store.
Based on margins and explosive growth, the real driver of AAPL stock is the iPhone. Piper Jaffray analyst Gene Munster believes the company will have sold 7.5 million handsets during the September quarter. He, along with most others on Wall Street, expects the company's stock price to go well above $200 in the next 12 months.
With expectations so high, some have cautioned that Apple could disappoint with its earnings. Analyst Yair Reiner with Oppenheimer said in a note to investors last week that supply constraints of the iPhone 3GS due to high demand could lead to fewer handset sales than are expected. He views December as a "catch-up quarter," when Apple could easily sell more than 8 million iPhones.
Mac sales are predicted to be at a record setting pace, with analysts forecasting around 2.8 million in sales for the fourth quarter. If accurate, that would be the company's best-ever frame, topping a year ago when it sold 2.6 million Macs during the September 2008 quarter. Those sales, along with 6.5 million iPhones, helped the company's profits rise 26 percent year-over-year.
Looking ahead, analysts already expect December earnings of $1.91 per share, according to Thomson Reuters. They also expect Apple, which traditionally gives very conservative guidance, to forecast $1.68 per share.
Comments
Apple has become like the Energizer Bunny of tech stocks. It just keeps going, and going and going. This is something so remarkable during this uncertain economic climate that many of these analysts don't know quite what to make of the company. Having tried being consistently cautionary, only to look like fools as the company continues to advance, they are now opting for a if-you-can't-beat-em-join-em approach.
My prediction, for what it's worth, is that Apple will come in with numbers that beat their own projections but fall short of the lofty projections some analysts have conjured up, the stock will temporarily decline and a month from now that decline will be seen as an insignificant blip.
I've been betting on Apple consistently since 2003 and been quite pleased. Jobs pretty much spelled out what he intended to do years ago when he did a presentation positioning the Mac as a hub for a digital lifestyle. When the iPod was brought in, many thought that it was just a case of Apple having a successful product but one that would lose its popularity when something better came along. Instead, the iPod was basically the first step in a very clever plan to promote the digital lifestyle Jobs talked about a few years back. While the competition has foolishly planned one move at a time, Jobs was operating like a good chess player, planning out several moves in advance. The company's success has been no fluke.
I don't care what numbers Apple reports. They have a winning strategy with competition so far behind, most still haven't figured out what hit them. Maybe down the road that changes but it will take years for there to be a significant change in Apple's fortunes on account of no other company is positioned to deliver the complete solution to digital delivery and playback that Apple can. Analysts have generally been wrong about Apple because they don't tend to think in terms of the big picture. They crunch numbers quarter by quarter and assume that nothing lasts.
"Expectations are high for Apple, set to report its fourth-quarter results Monday afternoon ...
Don't you mean 3rd quarter results?
Don't you mean 3rd quarter results?
Apple just started the first quarter of its fiscal year. The quarter that ended September 30th was the fourth quarter of their 2009 year. I don't know why they start on 10/1 instead of 1/1, but they do!
Don't you mean 3rd quarter results?
No it's 4th quarter, Apple financial year ends september 30th.
So it's
Q1=1/10-31/12
Q2=1/1- 31/3
Q3=1/4-30/6
Q4=1/7-30/9
Apple just started the first quarter of its fiscal year. The quarter that ended September 30th was the fourth quarter of their 2009 year. I don't know why they start on 10/1 instead of 1/1, but they do!
It may have something with the fact the US government's fiscal year also starts on 10/1 (most states start on 7/1)
In other words, if Apple reports very good results, better than what they promised to deliver but short of the impressive numbers analysts are anticipating, the stock will take a hit in the next short while.
Apple has become like the Energizer Bunny of tech stocks. It just keeps going, and going and going. This is something so remarkable during this uncertain economic climate that many of these analysts don't know quite what to make of the company. Having tried being consistently cautionary, only to look like fools as the company continues to advance, they are now opting for a if-you-can't-beat-em-join-em approach.
My prediction, for what it's worth, is that Apple will come in with numbers that beat their own projections but fall short of the lofty projections some analysts have conjured up, the stock will temporarily decline and a month from now that decline will be seen as an insignificant blip.
I've been betting on Apple consistently since 2003 and been quite pleased. Jobs pretty much spelled out what he intended to do years ago when he did a presentation positioning the Mac as a hub for a digital lifestyle. When the iPod was brought in, many thought that it was just a case of Apple having a successful product but one that would lose its popularity when something better came along. Instead, the iPod was basically the first step in a very clever plan to promote the digital lifestyle Jobs talked about a few years back. While the competition has foolishly planned one move at a time, Jobs was operating like a good chess player, planning out several moves in advance. The company's success has been no fluke.
I don't care what numbers Apple reports. They have a winning strategy with competition so far behind, most still haven't figured out what hit them. Maybe down the road that changes but it will take years for there to be a significant change in Apple's fortunes on account of no other company is positioned to deliver the complete solution to digital delivery and playback that Apple can. Analysts have generally been wrong about Apple because they don't tend to think in terms of the big picture. They crunch numbers quarter by quarter and assume that nothing lasts.
Well said.
analysts don't know quite what to make of the company.
They never have. Regardless of the times.
Now would be a good time to announce that iMac event Apple... hint thint
I'm wondering if they might have run into QC problems again? That is an unexpected delay. Apple really needs to get new iMac out the door. The Mini could get by with a 750 MHz bump.
Hurry up Apple!
Dave
Now would be a good time to announce that iMac event Apple... hint thint
Ten bucks says the new "tablet" is named... wait for it... iMac.
I predict new iMacs between January and June. Tablet actually slides in and out of the iMac (as we've all seen in the patent application). The iMac price stays the same, but you actually get "two" computers. One is the iMac desktop which works great. The second is the tablet that slides out with most of the computing guts.
It's too perfect, and it's another paradigm shift, which Mr. Jobs and Apple love to do. To me this is feeling more and more likely. And it'll be killer. If you don't think a tablet is "useful" then leave it in your iMac. No loss. But twenty bucks says you'll find it very, very useful once you give it a shot.
C'mon, big money, no whammies!
Great minds think alike.
I'm hoping for 3 million Macs sold. That would blow the pants off Wall St.
In other words, if Apple reports very good results, better than what they promised to deliver but short of the impressive numbers analysts are anticipating, the stock will take a hit in the next short while.
Yeah cool isn't it! Analysts have one of the best jobs in the world as they pull numbers out of their ass and are accountable to no one.
Apple has become like the Energizer Bunny of tech stocks. It just keeps going, and going and going. This is something so remarkable during this uncertain economic climate that many of these analysts don't know quite what to make of the company.
First off there is absolutely nothing uncertain about this economy. The government and regulators knew the banking system was headed for a colapse at least two years before it happened. Some where pointing out the issues even before that. The problem was no body was in a position to speak up and do somthing because in part the government promoted some of the policies that drove the colapse. Oh GM and Chysler desrve to die along with the UAW.
Having tried being consistently cautionary, only to look like fools as the company continues to advance, they are now opting for a if-you-can't-beat-em-join-em approach.
If you are a contrarian investor now is the time to look out. If next month Apple has the same basic line up, that is iMac and Mini, then I'd be very very concerned as they need new products to promote growth. Same thing goes for the iPod and iPhone business which has stagnetted product development wise. Eventually the lack of innovation here will result in a rapid decline in sales. Except for Nano the last rev was a non event. More so it was silly for them to focus on a camera in the Touch, GPS would drive far more sales especially tied in to the gaming world. It really feels like Apple has lost it as far as the iPod and Touch goes.
My prediction, for what it's worth, is that Apple will come in with numbers that beat their own projections but fall short of the lofty projections some analysts have conjured up, the stock will temporarily decline and a month from now that decline will be seen as an insignificant blip.
So now you are the analyst! I actually hope you are right but this analyst (self proclaimed) doesn't see it that way. I see an iPod division a float but without a rudder. I also see Apple underplaying the desktop way to much. The reality is devices like iPhone and improved Touch devices could have people leaving the compromised environment of a laptop to return to the desktop. To put it kindly Apples desktop line up sucks.
I've been betting on Apple consistently since 2003 and been quite pleased. Jobs pretty much spelled out what he intended to do years ago when he did a presentation positioning the Mac as a hub for a digital lifestyle.
This is garbage as Apple has yet to produce a desktop consummer machine passable as a hub for a digital life style. The number one issue being the lack of storage space for all the digital media Apple sells.
When the iPod was brought in, many thought that it was just a case of Apple having a successful product but one that would lose its popularity when something better came along. Instead, the iPod was basically the first step in a very clever plan to promote the digital lifestyle Jobs talked about a few years back. While the competition has foolishly planned one move at a time, Jobs was operating like a good chess player, planning out several moves in advance. The company's success has been no fluke.
Even Apple has admitted that they have been surprised at the success of iTunes and the iPods. They where just lucky to have the right solution at the right time.
I don't care what numbers Apple reports. They have a winning strategy with competition so far behind, most still haven't figured out what hit them. Maybe down the road that changes but it will take years for there to be a significant change in Apple's fortunes on account of no other company is positioned to deliver the complete solution to digital delivery and playback that Apple can.
I truly hope the above was a joke as Apple is no where near a complete solution. If they where people wouldn't be out buying HP media servers or hacking a Linux solution just to store their media purchased from iTunes. In fact the more I deal with it the more obvious what a joke Apples product matrix is.
That is not to say it isn't improving, they have actually come a long way. A complete solution isn't in the cards otherwise though.
Analysts have generally been wrong about Apple because they don't tend to think in terms of the big picture. They crunch numbers quarter by quarter and assume that nothing lasts.
Not really, being an Analyst is like being in the business of appealing to peoples insecurities. To make money you have to make people feel good no matter what the numbers say. Oh an there needs to be a black sheep to slag.
Frankly unless I see Apple becoming more agressive with new products I see them falling on hard times in the near future. The only significNt development all year has been Nano and software. That folks is a recipe for a crash.
Dave
That would blow the pants off Wall St.
This is something I'd rather not see.
Ten bucks says the new "tablet" is named... wait for it... iMac.
They will come up with a new name just for marketing.
I predict new iMacs between January and June. Tablet actually slides in and out of the iMac (as we've all seen in the patent application). The iMac price stays the same, but you actually get "two" computers. One is the iMac desktop which works great. The second is the tablet that slides out with most of the computing guts.
I could see this patent being realized but the last thing I would want is for that tablet to contain the guts of an iMac. The problem is it would be a huge regression performance wise. I'd rather the tablet was simply a storage device that maybe also provided for a few communication ports and maybe a support computer.
In any event anything that slides into an iMac needs it's own name. I here by offer up this name "Core". This would be an excellent play on words as it brings up images of Apples the fruit and the mainframes of old. Try it out.
It's too perfect, and it's another paradigm shift, which Mr. Jobs and Apple love to do. To me this is feeling more and more likely. And it'll be killer.
It is all in the implementation details. Remember Apple Took a great idea in what became AIR and turned it into a piece of junk. The potential is there for them to sink the laptop world but I suspect that with todays technology that iMac would be a rather poor performer and short on expansion prospects. This is not exactly something Apple needs right now.
If you don't think a tablet is "useful" then leave it in your iMac. No loss. But twenty bucks says you'll find it very, very useful once you give it a shot.
I have an iPhone so I already know tablets are useful. The question though relates to size. Too big and people will not use it.
Overall that patent isn't a bad idea. However I would like just as much to see that iMac take a Touch or iPhone. It would be nice to leave the house in the morning with a cache full of news, updates and mails. You are likely to say you have a connection 100% of the time so what is the problem. The problem is I don't as the building I work in is resistant to all cell services. Besides a smart program on the make could consolidate a lot of info into a few web pages.
Dave
Apple just started the first quarter of its fiscal year. The quarter that ended September 30th was the fourth quarter of their 2009 year. I don't know why they start on 10/1 instead of 1/1, but they do!
I do! When Apple as founded (1976) the market for [micro]computers was hobbyists -- mainly people who bought parts and kits and built their own computers. The Apple I was an assembled circuit board-- you had to supply your own case, power supply, keyboard, video adapter, TV display and cassette tape deck.
Apple was incorporated in 1977, and later that year the Apple ][ was released. The Apple ][ was more self-contained -- including a (expensive to build*) case, power supply, keyboard and game paddles and built-in Integer BASIC. As such it targeted an emerging market-- the home/personal market ** The Commodore Pet appeared at about the same time and included a cassette deck, B/W video and a chicklet keyboard.
Anyway, one of the considerations for Apple's fiscal year, was so that its 1st quarter would include the Holidays (Thanksgiving, Christmas, Chanukkah... the main buying time for big-ticket home-personal purchases.
* While others used metal or wooden cases, the Apple ][ used a molded plastic case-- molds for this type of case cost in the hundreds of thousands of dollars, and were well beyond the means of [startup] competitors.
** That's why Apple [rightly] claims to have originated the Personal Computer
*
Releasing a tablet, for example, that isn't useful for very much, is pointless. Apple didn't invent the MP3 player. They were late to that game. Apple didn't invent the smartphone. They were late to that party. Apple isn't about being the first out of the gate but rather being the best, most well thought out option.
What Apple does that others have more trouble doing is providing hardware and software that is integrated more rationally. The truth is that the iPod would just be another media player without iTunes. iTunes, the App Store, rational interfaces, and so on and so on. This is Apple's strength.
As for the state of Apple's desktop offerings, whether it's a Mini, iMac or Mac Pro, we're not talking bad machinery. These are devices that in the hands of consumers work rather well. The megahertz race is over. Good performance is a given with even more modestly specced machines, like the Mini. What allows Apple's computers to stand out is that they come bundled with very good software, including arguably the best operating system on the market today. Fact is that the percentage of customers who are worried about having the latest and greatest technology under the hood is dramatically diminished compared to a few years ago. This is because the worst of today's components are light years ahead of what used to be state of the art not so long ago. If you don't believe that Apple offers a better class of software, you don't buy an Apple, regardless of the hardware driving that software. So it comes down to having good enough hardware to get the job done. Even Apple's desktops are good enough for most people. If you have to have more power than is available from the consumer line, at around $3,000, the pro desktops are hardly prohibitively expensive. In short, going on and on about the shortcomings of Apple's desktop hardware misses the point that if the software is what you need, the hardware is good enough. Where's the problem?
I here by offer up this name "Core". This would be an excellent play on words as it brings up images of Apples the fruit and the mainframes of old.
I can't say that I agree with much of what you've said so far today (I think that the 3Gs was a significant improvement), but I LOVE that name!