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Last minute estimates have Apple selling 2.8m Macs in Sept. Q

post #1 of 26
Thread Starter 
With just one day to go before Apple announces the results of its fourth fiscal quarter, market research firm NPD is out with its preliminary sales data for the three-month period, leading one expert to suggest the company sold upwards of 2.8 million Macs systems.

"We have analyzed NPD data for all 3 months of the September quarter (July, Aug & Sep) [and] it leads us to a Mac number of between 2.7 million and 2.8 million," Piper Jaffray analyst Gene Munster told clients in a report Monday afternoon.

The analyst said those figures suggest Mac sales grew anywhere from 25 percent to 29 percent during the quarter, inline to slightly ahead of Wall Street consensus estimates which have the Cupertino-based company selling approximately 2.7 million systems on 25 percent yearly growth.

Specifically, Munster said NPD's data suggest Mac sales grew 19 percent year-over-year in September, down from 23 percent in August, and about 43 percent in July.

"The months of August and September were tough year-over-year compares, as new iMacs were introduced in August 2007, but new Macs were not introduced until [October] in 2008," he explained. "Also, it appears that the weak consumer environment is negatively impacting Apple's business."

As far as iPods go, Munster said the three full months of NPD data suggests Apple sold approximately 11 million units on 7 percent growth, which is slightly above expectations on Wall Street. Given lingering concerns that the company's digital media player business may be showing signs of weakness, the segment's outperformance in relation to the Street should be seen as a slight positive, he said.

For the quarter, the analyst is modeling Apple to report revenue of $8.368 billion and net quarterly profit of $1.06 billion, or $1.17 per diluted share, driven by sales of 2.8 million Macs, 11 million iPods and 5 million iPhones. He expects gross margin to come in around 32 percent.

"Despite the expectation for an extended consumer slowdown hitting the consumer electronics space, we believe Apple is well-positioned to weather the storm," he told clients. "The company has recently leveraged its unit volumes in the iPod, Mac, and iPhone businesses to lower prices moderately while generally maintaining margins."

Munster maintained his Buy rating and $250 price target on shares of Apple.

As usual, AppleInsider will offer comprehensive coverage of Tuesday's Apple earnings report and conference call.
post #2 of 26
Quote:
Originally Posted by AppleInsider View Post

Munster maintained his Buy rating and $250 price target on shares of Apple.

I commend Gene Munster for having the courage to stand by his original call AND his convictions while so many other "so-called" experts cover their keesters!
post #3 of 26
Quote:
Originally Posted by MJ Web View Post

I commend Gene Munster for having the courage to stand by his original call AND his convictions while so many other "so-called" experts cover their keesters!

Amen.

These idiots have no clue. Munster is an optimist, but he's realistic, and looks long-term, which is where my money has always been.
post #4 of 26
Quote:
Originally Posted by echosonic View Post

Amen.

These idiots have no clue. Munster is an optimist, but he's realistic, and looks long-term, which is where my money has always been.

I kind of agree - but he's been calling for $250/share for an eternity. I think he's realistic, but I'm surprised to see his estimate holding in this market. Will Apple be able to meet a $1.63 per share profit for the holiday quarter (isn't that the street's estimate)? That seems difficult to me in a holiday quarter that has our current issues. Maybe they'll pass this stupid stimulus package in time for holiday shopping and people will actually spend it on gifts - but that'll only buy one iPod.

I'm not sure what to think, but I do see Gene as an honest broker of information.

P
post #5 of 26
Quote:
Originally Posted by MJ Web View Post

I commend Gene Munster for having the courage to stand by his original call AND his convictions while so many other "so-called" experts cover their keesters!

Or, he doesn't know well enough to make an adjustment.
Not that he's wrong, but there's certainly no harm or repercussions if he is.

How many of us could screw up royally at work and not get fired like these analysts?
post #6 of 26
he's he only one sticking to his price target. I don't think he wants to lower it since he wants to pump it up high. I think it is reasonable when the stock market turns around apple yes 250. for now no one wants to buy apple. but its only a matter of time before it hits 250.
post #7 of 26
Quote:
Originally Posted by Pachomius View Post

I kind of agree - but he's been calling for $250/share for an eternity. I think he's realistic, but I'm surprised to see his estimate holding in this market.
P

Maybe Munster knows something the others don't! I don't believe AAPL is impervious to the economy. Macbooks aren't mansions or Ferraris on the other hand. $1300 to $1600 is affordable when one demands quality. But AAPL's rapid iPhone expansion is what boggles my mind most!
post #8 of 26
Quote:
Originally Posted by MJ Web View Post

Maybe Munster knows something the others don't! I don't believe AAPL is impervious to the economy. Macbooks aren't mansions or Ferraris on the other hand. $1300 to $1600 is affordable when one demands quality. But AAPL's rapid iPhone expansion is what boggles my mind most!

I bought the new MacBook this weekend - 2GHz model - it wasn't exactly what I had hoped for, but my personal notebook kicked the bucket about two months ago and I've been waiting for this update. My iMac helped to hold me over, but...
post #9 of 26
I get a kick out of the $250/share number myself, but looking at how badly hit AAPL is compared to the overall market, I don't think it is completely unreasonable. Apple is clearly one of the market leaders; the question really comes down to where will we see PE ratios in 12 months, and not how well Apple itself is doing.

But wow... growth on iPod units is amazing to me. Average selling price might be more telling though.
post #10 of 26
Quote:
Originally Posted by satchmo View Post

Or, he doesn't know well enough to make an adjustment.
Not that he's wrong, but there's certainly no harm or repercussions if he is.

How many of us could screw up royally at work and not get fired like these analysts?

That's what pisses me off. These guys don't have to suffer any repercussions at all if their numbers are all wrong. Only their clients suffer. When somebody gives a target price of $250 and the client starts jumping for joy and buys a crapload of stock and then ends up with a stock sitting at $100, I'm pretty sure a firing squad or necktie party would be in order in certain countries. Unless you consider this just a SLIGHT miss. If I recall all the analysts pumping Apple up to the sky, only to reverse it in a month, makes me want to fire the whole batch of number crunchers. What they did makes sense, no doubt since the economy crashed that quickly, but I wouldn't have needed them to tell me that I should prepare for the worst since any fool could see that much.

Just as board of executives reward their CEOs for destroying the company, there seems to be some gap of logic that gives certain elitists a free pass in life.

I'm just pissed cause I lost a lot of money this year that wasn't really part of Apple's doing or the analysts doings. But let's face it, the analysts didn't really help all that much, either.
post #11 of 26
The big question is, what will be Apple's guidance tomorrow for this quarter? It won't matter that much that its Q4 was spectacular. What matters is this quarter, the December quarter, Apple's Q1. If guidance is too low, the stock will go down even more. If it's higher than expected, it'll soar.

Ahead of earnings, AAPL only went up about $1 today, barely more than 1%, while the rest of the market did great. Investors are waiting to see what Oppenheimer says. My guess is there will be one of two possible scenarios playing out tomorrow:

1. Apple offers guidance of $1.16, citing uncertainties in the consumer market this quarter.
2. Apple offers guidance of around $1.40, saying this quarter should be nearly as good as the year ago quarter, despite doubts about the economy and the stock soars.

Peter Oppenheimer was overheard at last week's Book announcement saying that Apple's pricing market was better than expected. That's a really good sign that scenario #2 just might play out.
post #12 of 26
The real question is how many AppleTVs did Apple sell.
post #13 of 26
Quote:
"Also, it appears that the weak consumer environment is negatively impacting Apple's business."

[...] He expects gross margin to come in around 32 percent.

"Despite the expectation for an extended consumer slowdown hitting the consumer electronics space, we believe Apple is well-positioned to weather the storm," he told clients. "The company has recently leveraged its unit volumes in the iPod, Mac, and iPhone businesses to lower prices moderately while generally maintaining margins."

Munster maintained his Buy rating and $250 price target on shares of Apple.


You have to love these predictions. Like an astrologer, Gene Munster's predictions contain their own contradictions:

While "the weak consumer environment is negatively impacting Apple's business", "Apple is well-positioned to weather the storm," he told clients. "The company has recently leveraged its unit volumes in the iPod, Mac, and iPhone businesses to lower prices moderately while generally maintaining margins."

"Munster maintained his Buy rating and $250 price target on shares of Apple."


The reality check:
===========

Before Apple renewed its MacBooks and MacBook Pros, Apple portables were $300 more expensive than the Wintel competition. With the introduction of all new aluminum enclosures, Apple raised prices by another $200. And no quad-core mobile Penryns, although they were launched by Intel in late August 2008.

See: Intel set to introduce mobile quad-core processors @ http://www.tgdaily.com/content/view/38830/135/

Asus announces quad-core gaming laptop @ http://www.tgdaily.com/content/view/39641/145/

Wouldn't it be great if Apple were to offer a MacBook Pro model with a quad-core Q9100 processor? Give us at least an option to buy it.

I don't believe that Apple will be able to maintain its market share or production volumes in the looming world recession. Moreover, the failure to lower prices is inexcusable.

Apple's shares will never reach the target price of $250 with the current weak market conditions. Sorry to break your bubble, but consumers and businesses are lowering their spending, favoring lower priced items and cancelling or postponing any unnecessary spending.

post #14 of 26
Quote:
Originally Posted by MJ Web View Post

I commend Gene Munster for having the courage to stand by his original call AND his convictions while so many other "so-called" experts cover their keesters!

Heh.... while I'm bullish on Apple and own way too much stock in it... Munster has been the wrongest of everyone in the past 6 months. Listening to ANYONE other than him would have saved you some money if you own Apple stock. So let's temper our praise... the goal is not to be bullish, the goal is to be right.
post #15 of 26
Quote:
Originally Posted by satchmo View Post

How many of us could screw up royally at work and not get fired like these analysts?

Well, let's see - there are financial analysts, TV weathermen, Wall Street CEOs, and anyone in the Bush administration. Oh, and don't forget Steve Ballmer.
post #16 of 26
Quote:
Originally Posted by elroth View Post

Well, let's see - there are financial analysts, TV weathermen, Wall Street CEOs, and anyone in the Bush administration. Oh, and don't forget Steve Ballmer.

Actually that's been studied, and TV weathermen have among the best records when it comes to predicting the future. Basically, the most often predictions are tested, and the shorter term the predictions are, the more likely they are to be good at it.

Don't believe me? Watch the history channel tonight at 8.
post #17 of 26
A good market analyst would have a keen instinct in predicting the future of a stock. Maintaining a buy at $250 while the stock fluctuated from over $200 to below $90 is anything but instinctive. It's true that love is blind, and that applies to Apple fans too.

An avid invester would 've sold the stock at $200+ and bought at below $100.

A typical Apple fan usually buys the stock at awhatever price, and holds on to it for dear life.
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post #18 of 26
Quote:
Originally Posted by cameronj View Post

Heh.... while I'm bullish on Apple and own way too much stock in it... Munster has been the wrongest of everyone in the past 6 months. Listening to ANYONE other than him would have saved you some money if you own Apple stock. So let's temper our praise... the goal is not to be bullish, the goal is to be right.

all depends on the timeframe though.
post #19 of 26
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Originally Posted by bloggerblog View Post

A typical Apple fan usually buys the stock at awhatever price, and holds on to it for dear life.

"for dear life" you make it sound like Apple are not rocking the discotheque right now.

Most "typical Apple fans" bought shares as long term investments as they share the same vision and they know Apples potential is huge and has barely scratched the surface.
post #20 of 26
Quote:
Originally Posted by cameronj View Post

Heh.... while I'm bullish on Apple and own way too much stock in it... Munster has been the wrongest of everyone in the past 6 months. Listening to ANYONE other than him would have saved you some money if you own Apple stock. So let's temper our praise... the goal is not to be bullish, the goal is to be right.

Note that I didn't praise Munster for being right or wrong. I commneded him for having the balls and the conviction to stand by his call. Time will tell if and when AAPL hits $250. Only then will we know how accurate Gene Munster actually was.
post #21 of 26
Quote:
Originally Posted by MJ Web View Post

Note that I didn't praise Munster for being right or wrong. I commneded him for having the balls and the conviction to stand by his call. Time will tell if and when AAPL hits $250. Only then will we know how accurate Gene Munster actually was.

Eh, that's just not true.

His job is to advise investors about what to do. Anyone who was bullish was wrong in the past 6 months, there's no denying that. The more bullish you were, the more wrong you were, and he was the most bullish.
post #22 of 26
Quote:
Originally Posted by cameronj View Post

Anyone who was bullish was wrong in the past 6 months, there's no denying that. The more bullish you were, the more wrong you were, and he was the most bullish.

Based on Munster's $250 call in September in 08 AAPL has still has over 10 months left to meet his 52 week price expectation.
post #23 of 26
Quote:
Originally Posted by MJ Web View Post

Based on Munster's $250 call in September in 08 AAPL has still has over 10 months left to meet his 52 week price expectation.

I'm too lazy to look it up, but Gene had a $250 guidance months ago - I'd guess he has about 6-8 month left on that to come true
post #24 of 26
It is clear from anyone living in San Francisco that the proper estimate for the quarter is 3.1 to 3.2 million mac computers for the quarter. This has nothing to do with Munster - Wall Street analysts typically play a game to underestimate the numbers.

But a clear view from this perspective yields the estimate of 3.1 to 3.2 million units for the quarter. This has no particular bearing on the stock price (which has fallen quite a bit), but Apple marches onward despite the economic troubles, especially in the current quarter before consumers lost their confidence.

From what I can see, even those who are living paycheck-to-paycheck are saving their pennies for Mac computers - I have several friends in this category; I speak from experience, not ideology.
post #25 of 26
Very little has changed for Apple, and I would argue that Apple may even see a bit of upside from the recession.. People will spend less eating out, going out, driving and other things. Using the internet and TV at home in between growing vegetables will be the order of the day.

And if that is important people may well splurge and feel good on something that will do the job more enjoyably...

The APPL price has been clobbered far too hard. In recent years the view was it was a buy when the P/E was down to 30 and a sell if it got close to 40.

Well, today it is 19. And that doesn't even take into account a few hundreds of millions of deferred iPhone and AppleTV revenues...

250 is certainly achievable by the end of 2009.
post #26 of 26
Quote:
Originally Posted by monstrosity View Post

"for dear life" you make it sound like Apple are not rocking the discotheque right now.

Most "typical Apple fans" bought shares as long term investments as they share the same vision and they know Apples potential is huge and has barely scratched the surface.

If you want long-term stocks do not look at the technology market, it fluctuates like mad, it always has.
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