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Earnings Preview: Apple could beat revenue estimates by $2 billion

post #1 of 30
Thread Starter 
As investors continue to mull-over the consequences of Steve Jobs' abrupt and immediate health-related leave of absences from the company, Apple will be posting its fiscal first quarter results after the bell this afternoon. AppleInsider contributor Andy Zaky, of Bullish Cross, provides a closer look.

The huge story this quarter will undoubtedly be the gigantic $2 billion top-line beat that Apple is likely to dish out when it releases results. This will prove once again how analysts continue to under-estimate just how explosive Apple's growth really is.

Wall street Analysts polled by Thomson Reuters expect Apple to post $5.38 in earnings per share (EPS) on approximately $24.38 billion in revenue. Yet, bloggers and unaffiliated analysts who tend to almost always outperform Wall Street analysts are looking for significantly stronger numbers out of the company. The spread between analysts and bloggers isn't always necessarily very wide, but when it is, Apple tends to smash all expectations.

Bloggers are looking for Apple to post $6.32 in earnings per share (EPS) on approximately $26.4 billion in revenue. This according to a poll recently taken by Philip Elmer-DeWitt at Fortune. As anyone can see, the bloggers are looking for Apple to beat on the top-line by over $2 billion.



Q1 2011 Earnings Estimates Apple

Now while I don't doubt this report is likely to be well received by investors and Apple will probably pop on the report in after-hours despite Jobs' health related leave of absence, I think the stock is likely to sell-off a bit within a day or two after its report. It has tended to be almost always prudent to take profits whenever Apple has run-up big ahead of its earnings report and then gaps-up big in the following trading session. The tendency has been to see Apple trade sideways to down from either its opening price after earnings or the following few trading session.

The Steve Jobs news won't help matters very much either. In fact, I think it's even possible that Apple could be immediately sold-off on great earnings given the humongous run it has had since August. The stock is up over 50% in just 6 months time. So if Apple trades very poorly into the close, I wouldn't be surprised to see further downside on the earnings release. The chart below shows how Apple has tended trade following its past quarterly earnings results.



Apple Earnings Releases

Also the broader market is extremely over-extended and it is now getting increasingly likely that we'll see a 10% or so correction within the next few weeks. Whenever the S&P 500 trades 10% above its 200-day moving average, the broader market tends to see some sort of a pull-back which might present opportunities for those waiting to jump into Apple.
For those who wish to take advantage of hedging strategies or reduce earnings volatility, please refer to my article on how to protect Apple profits ahead of its earnings releases.

Disclosure: No position in Apple.

Andy Zaky is a graduate from the UCLA School of Law, an AppleInsider contributor and the founder and author of Bullish Cross -- an online publication that provides in-depth analysis of Apple's financial health.
post #2 of 30
Select:

A) "Now while I don't doubt this report is likely to be well received by investors and Apple will probably pop on the report in after-hours despite Jobs' health related leave of absence,I think the stock is likely to sell-off a bit within a day or two after its report."

or

B) "The Steve Jobs news won't help matters very much either. In fact, I think it's even possible that Apple could be immediately sold-off on great earnings given the humongous run it has had since August."

Given that all bases are covered, in 5 or 10 years you will be able to write that you were correct!
post #3 of 30
Quote:
Originally Posted by lolick View Post

Select:

A) "Now while I don't doubt this report is likely to be well received by investors and Apple will probably pop on the report in after-hours despite Jobs' health related leave of absence,I think the stock is likely to sell-off a bit within a day or two after its report."

or

B) "The Steve Jobs news won't help matters very much either. In fact, I think it's even possible that Apple could be immediately sold-off on great earnings given the humongous run it has had since August."

Given that all bases are covered, in 5 or 10 years you will be able to write that you were correct!

It is a lazy edit job from Andy. The first paragraph, sans mention of Steve was posted Sunday night. The second is new to this story, AFAIK.
post #4 of 30
Maybe this'll allow them to reduce the Apple Tax just a smidge for us poor commoners...
post #5 of 30
Whatever happens, please protect us from the wishy-washy Apple of the past in favor of the confident and decisive Apple of these last few years...

UPDATE: Opening bell sees an immediate 5% drop in AAPL, which is not as severe as I thought it would be... (now, after 15 minutes the stock has leveled off at 3% down).

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

Reply
post #6 of 30
Quote:
Originally Posted by xSamplex View Post

Maybe this'll allow them to reduce the Apple Tax just a smidge for us poor commoners...

this user has nothing better to do with their time than to post persistently anti Apple or anti Jobs statements on AppleInsider despite how foolish or preposterous they turn out to be, just view their last 25 posts.

That's all I'm going to do to feed this troll, don't waste any more time, it's precious as anybody who's been seriously unwell can attest to.
post #7 of 30
If anyone had told me in the year 2000, that Apple would be selling over 30 million computers 10 years later - in ONE quarter, I would have had trouble believing it - even if I wished it.

(Macs, iPads, iPhones, iPod touches, are all computers in any sense of what we called a computer in 2000)

Apple has fulfilled my wildest dream of making the world a better place for more and more people, if only to displace any further suffocation of progress by that wrong-doer Microsoft.

And the next five years are going to be a wild ride - hold onto your hats, and your APPL's..
post #8 of 30
Quote:
Originally Posted by lolick View Post

Select:

A) "Now while I don't doubt this report is likely to be well received by investors and Apple will probably pop on the report in after-hours despite Jobs' health related leave of absence,I think the stock is likely to sell-off a bit within a day or two after its report."

or

B) "The Steve Jobs news won't help matters very much either. In fact, I think it's even possible that Apple could be immediately sold-off on great earnings given the humongous run it has had since August."

Given that all bases are covered, in 5 or 10 years you will be able to write that you were correct!

Or perhaps one day you'll discover (maybe 10-years from now) that there's a difference between what is possible and what is likely. Read the two paragraphs again and you'll see I'm committed to a position. Nota poor editing job - a poor interpretation of the reading. It's not about being right or wrong. It's about laying out what is likely to happen and could happen so people can hedge accordingly.
Andy M. Zaky
Bullish Cross
www.bullcross.com
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Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
post #9 of 30
unlike his previous leave of absence Jobs remains as the CEO. He hopes to be back as soon as possible. We can see from the previous couple of years that the Apple board have delivered well: new products and a new class of product which have rattled their competitors and have them scrambling over each other in a rush to imitate the successful iPad.
post #10 of 30
Quote:
Originally Posted by Jon T View Post

If anyone had told me in the year 2000, that Apple would be selling over 30 million computers 10 years later - in ONE quarter, I would have had trouble believing it - even if I wished it.

(Macs, iPads, iPhones, iPod touches, are all computers in any sense of what we called a computer in 2000)

Apple has fulfilled my wildest dream of making the world a better place for more and more people, if only to displace any further suffocation of progress by that wrong-doer Microsoft.

And the next five years are going to be a wild ride - hold onto your hats, and your APPL's..

Thanks for this post. Dear all, please look at this with a long perspective. In a couple of days we will be remembering the short lived market panic over yesterday´s news. AAPL was down 21 bucks a share and at this time is down 13. Chances are that it will reach 350 quite soon.
post #11 of 30
Sell, sell, sell, all you short-sighted investors.

If you really can't see what is coming down the pipe for the next two years that has obviously been in planning stages internally at Apple, I will gladly take your cheap stock off your hands.

Jobs does not the company make. At one time he did, but that mantle has been passed.
He is purely figurehead at this point.

Sadly, this type of thing feeds the flames of anti-Apple-fanboi attitudes making him out to be much more than he is.
post #12 of 30
Great- now perhaps Apple can reinstate its philanthropy programs that Steve Jobs abolished in the late 90's.
post #13 of 30
Quote:
Originally Posted by andyzaky View Post

Or perhaps one day you'll discover (maybe 10-years from now) that there's a difference between what is possible and what is likely. Read the two paragraphs again and you'll see I'm committed to a position. Nota poor editing job - a poor interpretation of the reading. It's not about being right or wrong. It's about laying out what is likely to happen and could happen so people can hedge accordingly.

That's a interesting analysis of the past quarter.

Do you have any projections going forward? More specifically how many iDevices, iPhones and iPads, do you see Apple selling this year?
post #14 of 30
Quote:
Originally Posted by SpamSandwich View Post

UPDATE: Opening bell sees an immediate 5% drop in AAPL, which is not as severe as I thought it would be... (now, after 15 minutes the stock has leveled off at 3% down).

The drop isn't even close to what I predicted.

This is a very good sign... to me it shows that Apple has shown investors that a proper post Jobs management team has been installed... either that or investors are so damned confused today that they have no idea of what to do... "Jobs left... sell!! sell!! Earnings are through the roof... buy!! buy!!"
na na na na na...
Reply
na na na na na...
Reply
post #15 of 30
Quote:
Originally Posted by JimDreamworx View Post

Sell, sell, sell, all you short-sighted investors.

If you really can't see what is coming down the pipe for the next two years that has obviously been in planning stages internally at Apple, I will gladly take your cheap stock off your hands.

Jobs does not the company make. At one time he did, but that mantle has been passed.
He is purely figurehead at this point.

Sadly, this type of thing feeds the flames of anti-Apple-fanboi attitudes making him out to be much more than he is.

The actual term is "down the pike" (for turnpike) or "in the pipe" (for pipeline)
post #16 of 30
steve laying on a cold marble slab
dead from cancer
was factored in a long time ago in AAPL stock price .

MAN O MAN THERE ARE STUPID PEOPLE HERE

I hope steve can take 24 months to lay down and recover .
I wish mr Jobs all the best.



this is a rare chance to buy aapl with a built in 10% bounce

buy buy buy

apple can do no wrong


peace

9



.

GO APPLE

GO J E T S !!!!!!
whats in a name ? 
beatles
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whats in a name ? 
beatles
Reply
post #17 of 30
inadequate timewaster.
Quote:
Originally Posted by xSamplex View Post
Maybe this'll allow them to reduce the Apple Tax just a smidge for us poor commoners...
this user has nothing better to do with their time than to post persistently anti Apple or anti Jobs statements on AppleInsider despite how foolish or preposterous they turn out to be, just view their last 25 posts.

****

Thank you for your comment. We will review and get back to you. BTW, to acknowledge that Apple charges a pretty penny is hardly a crazy thing to point out. Where else do these monster margins come from? The profit fairy? Sometimes you gotta stop being a fan and have to think for yourself. Even if you really, really, really like the products.

That's all I'm going to do to feed this troll, don't waste any more time, it's precious as anybody who's been seriously unwell can attest to.
post #18 of 30
Quote:
Originally Posted by island hermit View Post

The drop isn't even close to what I predicted.

This is a very good sign... to me it shows that Apple has shown investors that a proper post Jobs management team has been installed... either that or investors are so damned confused today that they have no idea of what to do... "Jobs left... sell!! sell!! Earnings are through the roof... buy!! buy!!"

Steve is ever the strategist, even when he's absent!

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #19 of 30
Quote:
Originally Posted by xSamplex View Post

Maybe this'll allow them to reduce the Apple Tax just a smidge for us poor commoners...

As an AAPL shareholder (and Apple customer), I trust that they will not reduce their gross margins. Apple should keep those high and invest heavily in R&D which will result in innovative new products in the future.
post #20 of 30
Quote:
Originally Posted by SpamSandwich View Post

Opening bell sees an immediate 5% drop in AAPL, which is not as severe as I thought it would be... (now, after 15 minutes the stock has leveled off at 3% down).

It was actually a 6.4% drop, down to $326. It's clawing its way back up. Real-time trading shows it down 1.29% at 1:40pm EST.

At this rate, it might actually hit $350 by the closing bell. So much for the big panic.

Impressive.
post #21 of 30
Quote:
Originally Posted by xSamplex View Post

Quote:
Originally Posted by xSamplex View Post
Maybe this'll allow them to reduce the Apple Tax just a smidge for us poor commoners...

BTW, to acknowledge that Apple charges a pretty penny is hardly a crazy thing to point out. Where else do these monster margins come from? The profit fairy? Sometimes you gotta stop being a fan and have to think for yourself. Even if you really, really, really like the products.

Well I hope you're just as busy posting on Ferrari fan sites campaigning to reduce the Ferrari Tax or Continental Airlines to reduce the First Class Tax, after all you're on the same plane heading the same direction as economy so why pay so much more?

If you took your own advice and thought for yourself you'll realise Apple doesn't force anyone into buying their products, unlike taxes; if people felt they were overpriced there are plenty of alternatives as you've often pointed out in your previous posts. Those profits come from people deciding Apple's products are better than what the competition has to offer.

The people and the market have decided that the Apple price is right.
post #22 of 30
Quote:
Originally Posted by brucep View Post

this is a rare chance to buy aapl with a built in 10% bounce

buy buy buy

apple can do no wrong


peace

9it was

Bought on the dip.

Surprised it was so small and so short-lasting!

No hedge fund stampede.

Anticipate runup after earnings call.

Go Steve, Tim, Apple, AAPL, Steelers!
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
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"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #23 of 30
Quote:
Originally Posted by Dick Applebaum View Post

Bought on the dip.

Surprised it was so small and so short-lasting!

No hedge fund stampede.

Anticipate runup after earnings call.

Go Steve, Tim, Apple, AAPL, Stealers!

I stayed out so far - I think we will see a bigger dip later this week. Andy also makes a good observation about a general market correction.

BTW, I think the team you are pulling for is the Steelers although a team named the Stealers would be interesting (I guess it would be no worse than a team named the Bandits).
post #24 of 30
Quote:
Originally Posted by penchanted View Post

I stayed out so far - I think we will see a bigger dip later this week. Andy also makes a good observation about a general market correction.

BTW, I think the team you are pulling for is the Steelers although a team named the Stealers would be interesting (I guess it would be no worse than a team named the Bandits).

Thanks for the heads-up.

My late wife, Lucy, was from Ambridge (a steel town suburb of Pittsburgh) -- AIR, there was some guy who played football from Beaver Falls

Anyway, I corrected my post! Had I not done that, Lucy would come to me in my dreams and say:

Yah-RIG-na-RUNT!
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #25 of 30
Nice job Andy...

EPS: 6.29 (Andy) 6.43 (Actual)
Revenue: 26325 (Andy) 26740 (Actual)
Gross Margin: 38% (Andy) 38.5% (Actual)


Why are you always underestimating Apple!
post #26 of 30
Quote:
Originally Posted by lolick View Post

Select:

A) "Now while I don't doubt this report is likely to be well received by investors and Apple will probably pop on the report in after-hours despite Jobs' health related leave of absence,I think the stock is likely to sell-off a bit within a day or two after its report."

or

B) "The Steve Jobs news won't help matters very much either. In fact, I think it's even possible that Apple could be immediately sold-off on great earnings given the humongous run it has had since August."

Given that all bases are covered, in 5 or 10 years you will be able to write that you were correct!

I don't need 5 or 10 years. Classic sell the earnings pop. The "even possible" immediate sell-off didn't materialize. Why is 'even possible' immediate sell-off important? Because people should hedge for the possibility that Apple could have opened down today. That way if it pops up, you sell the pop and remove the hedge.
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
Andy M. Zaky
Bullish Cross
www.bullcross.com
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post #27 of 30
Quote:
Originally Posted by Serendip7 View Post

Nice job Andy...

EPS: 6.29 (Andy) 6.43 (Actual)
Revenue: 26325 (Andy) 26740 (Actual)
Gross Margin: 38% (Andy) 38.5% (Actual)


Why are you always underestimating Apple!

I don't know. I keep trying to overestimate but they keep kicking my butt!
Andy M. Zaky
Bullish Cross
www.bullcross.com
Reply
Andy M. Zaky
Bullish Cross
www.bullcross.com
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post #28 of 30
Quote:
Originally Posted by andyzaky View Post

I don't know. I keep trying to overestimate but they keep kicking my butt!

Well, you are finally getting some competition from the paid analysts who seem to be peeing themselves to set the highest estimates.
post #29 of 30
Quote:
Originally Posted by penchanted View Post

Well, you are finally getting some competition from the paid analysts who seem to be peeing themselves to set the highest estimates.

The "they" refers to Apple. Analysts missed by $2 billion. They're nowhere to be found.
Andy M. Zaky
Bullish Cross
www.bullcross.com
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Andy M. Zaky
Bullish Cross
www.bullcross.com
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post #30 of 30
Quote:
Originally Posted by andyzaky View Post

The "they" refers to Apple. Analysts missed by $2 billion. They're nowhere to be found.

I knew that you meant Apple.

I was referring to the recent spate of forecasts for the current quarter - the analysts seem to finally be stretching a bit. Then again, you may think they are still being too conservative.
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