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Wall Street cheers Apple's "outstanding" second-quarter

post #1 of 38
Thread Starter 
Analysts on Wall Street are largely applauding Apple's performance during the March quarter, with many of them this week initiating more bullish views of the company's prospects going forward. Included is a run down analyst ratings and price target changes, along with some excerpts from their commentary.

Piper Jaffray: Buy ($180)

Piper Jaffray analyst Gene Munster, who maintained his Buy rating and $180 price target on Apple shares, encouraged investors to pour money into the Cupertino-based company, adding that he expects Steve Jobs to return to the company, though possibly in a reduced role such as Chairman with Tim Cook adopting the permanent CEO role.

"We remain buyers of AAPL; March quarter results confirm that demand for Apple's products remains strong despite a tough macro environment," he said. "New iPhones and the potential for Jobs to return in June should be catalysts for shares to move higher over the next several weeks. We expect growth to re-accelerate when macro trends improve."

Oppenheimer & Co: Outperform ($140)

Oppenheimer & Co. analyst Yair Reiner raised his estimates and price target on shares of Apple from $120 to $140.

"Apple continues to defy the common misconception that, as a premium brand, it's destined to underperform in a time of economic duress," he said. "Apple products aren't cheap, but the resiliency in their demand suggests they're creating a lot of value-not by cutting prices (like most peers) but primarily by increasing utility. The strategy is working now and should work doubly well when the world emerges from its current morass."

Barclays Capital: 1-Overweight ($155)

Barclays Capital analyst Ben Reitzes remains upbeat about Apple's product pipeline, maintaining an Overweight rating on the company's shares and edging his price target up from $143 to $155.

"In short, we believe the 2Q09 report was very solid and should provide more fuel for shares into the summer ahead of major new product launches and a potential return of Steve Jobs," he said. "We look forward to hearing from Apple next at its Worldwide Developers Conference June 8-12 in San Francisco and then we expect another major new product event in September."

Needham & Co: Strong Buy ($200)

Needham & Co. analyst Charlie Wolf, always one of the more colorful analysts covering Apple, maintained his Strong Buy rating and $200 price target on shares of the company.

"In an economy that shows only tentative signs of recovery, Apple reported what must be viewed as an outstanding quarter," he said. "The bigger news not captured in second quarter results is the phenomenal success of the iPhone/iPod touch App Store. [...] In our view, the iPhone is building a software competitive advantage in the smartphone market that competing platforms will find difficult, if not impossible to challenge. This advantage, in turn, should translate into market share gains for the iPhone down the road.

Caris & Company: Buy ($150)

Caris $ Co. analyst Robert Cihra reiterated his Buy rating and $150 price target on shares of Apple, adding that he sees "big" iPhone opportunity going forward.

"We continue to model a refresh to iPhone 3.0 late-June and lower priced model w/ China ramping CQ3E," he wrote. "We havent modeled but also continue to see the prospect of a new 7-inch iPhone-like Mac tablet (iPad?), particularly as Windows 7 now gets set to add native touchscreen support (including multi-finger touch) and we imagine Apple will want to have a competing large-screen touch Mac, particularly given its own in-house capacitive touch-sensing tech/investments."

RBC Capital Markets: Outperform ($165)

Even Royal Bank of Canada analyst Mike Abramsky crawled out from under his rock, upgrading shares of Apple from Underperform to Outperform and boosting his price target on the stock by a whopping $70 from a dismal $95 to a more respectable $165.

"Apple's valuation has outperformed Nasdaq by 37%, despite decelerating Macs, recession, management uncertainty," he said. "We underestimated Apple's 'VIP,' investor willingness to look beyond near-term challenges, focus on iPhone leadership and the stability of cash, and belief Apple will continue to out-innovate peers. We believe Steve Jobs is already reengaged with creative work, and is likely to return to helm Apple."

Other analyst

Goldman Sachs's David Bailey reiterated his Neutral rating and edged his price target from $125 to $130.

Citigroup's Richard Gardner reiterated his Buy rating and nudged his price target to $152 from $147.

Bernstein Research's Toni Sacconaghi maintained his Outperform rating and bumped his price target from $135 to $140.

Pacific Crest's Andy Hargreaves reiterated his Buy rating and raised his price target to $150 from $120.

Morgan Stanley's Kathryn Huberty maintained an Equal Weight rating with a price target of $105, up from $100.
post #2 of 38
At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise.

Back to work.
post #3 of 38
I love you AI but can you please be consistent in the way you present the figures? In other words make all of them read "from $$ to $$" or vice versa. Thanks.
post #4 of 38
Quote:
Originally Posted by teckstud View Post

I love you AI but can you please be consistent in the way you present the figures? In other words make all of them read "from $$ to $$" or vice versa. Thanks.

Agreed, they did make it unnecessarily difficult to understand the numbers at a quick glance. It is always fun to watch these "experts" keep shoving their foot down their mouths even further every quarter, though, no matter how the article is laid out.
post #5 of 38
blah blah blah.... do anybody listen to these guys?
Lesson one: Never buy shares in a company you do not know anything about.
Lesson two: If you know anything about Apple Inc you don't need to listen to this waffle.
post #6 of 38
Apple's Q2 results were much better than reported. If you add back in embargoed iPhone revenue, and $125 million in unrealized Other Income (macro forces), Apple would have reported $1.45 EPS.
post #7 of 38
Quote:
Originally Posted by Gyokuro View Post

At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise.

Back to work.

Yeah, it stinks but stock always goes down when they think it's being pumped (talked up), also, most investors, I kid you not, realize that Apple's bread and butter, the iPhone, could very well take a hit with the release of smarter phones and 50 million users with contracts about to expire.

Equally, the reason the stock has sored the past few months was due to the 3.0 software talk, not the refresh.

You have to know how to play the market, its normally the opposite of what you think.

VIsit the stock websites and read what STRONG BUYERS and STRONG SELLERS have to say, each has a goal to either scare or give confidence to the holder. After 911, if you were smart, you sold, but what happened, stocks went up, still sell though, why, well after 2-3 weeks it went down and some say since then, the market has crashed and never recovered.

Then google STOCK BASHER and STOCK PUMPER. (seller and buyer).

Good luck and always deal with someone you trust dude, please don't listen to anyone in a forum, even here and especially with money. Read, read, read. ..
post #8 of 38
Quote:
Originally Posted by teckstud View Post

I love you AI but can you please be consistent in the way you present the figures? In other words make all of them read "from $$ to $$" or vice versa. Thanks.

Yeah. Sorry.

K
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post #9 of 38
Quote:
Originally Posted by hiimamac View Post

... also, most investors, I kid you not, realize that Apple's bread and butter, the iPhone, could very well take a hit with the release of smarter phones and 50 million users with contracts about to expire. ...

Your analysis of how the stock market works is spot on, but this comment is patent nonsense.

If you want to speculate on what the impact of future hardware releases will be, you have to include the fact that Apple is itself going to be releasing new hardware in a month or two. There is absolutely no reason, based on the information available to expect Apple's leading position in the smart-phone horse race to change much at all, let alone go down because of the hypothetical introduction of "smarter" phones from other quarters.

Apple currently has the best product in the category and all indications are that the iPhone 3.0 products will be similarly so.

You've woven this fantasy out of pure hot air.
In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...
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In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...
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post #10 of 38
suck it Abramsky...
post #11 of 38
Quote:
Originally Posted by Gyokuro View Post

At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise.

Back to work.

Possibly linked to Apple cutting 1,600 retail jobs?
post #12 of 38
I M P O R T A N T
Memo To Balmer & Gates

Please disregard the praise heaped on that no account company Apple. Let them go on their merry old way. Just look at your performance despite the very difficult times look at all the money you made. So its less than usual big deal you are on the Right Track. Keep it up. For goodness sake---- Do Not Do what you have in the past "copy Apple". Do your own thing. !!!!

HT
post #13 of 38
Quote:
Originally Posted by paxman View Post

blah blah blah.... do anybody listen to these guys?
Lesson one: Never buy shares in a company you do not know anything about.
Lesson two: If you know anything about Apple Inc you don't need to listen to this waffle.

It's incredible how these guys can make money by acting like brainless lemmings...after hitting it all wrong all the time with their predictions about a "doomed" Apple in a recession-ridden environment, now they praise the company and predict wonderful times ahead with bullish stock prices...until they fall again or Apple does something they haven't "predicted", of course.

I am glad Apple doesn't get intoxicated by that kind of hype, the same hype that virtually destroys the global financial system with their vapor-based ratings and brings the U.S. and other countries close to bankruptcy (unless you wanna insist in acting like a Zealot and believing that the dollar's strength has an objective basis)...

Once more, keep it up Apple...and fuck the moronic analysts who haven't got a clue on the economy.
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post #14 of 38
Quote:
Originally Posted by Kasper View Post

Yeah. Sorry.

K

hah, techstud...you're a joke!

somebody said they think investors are aware that "the iPhone, could very well take a hit with the release of smarter phones"

however one of the analysts points out "the iPhone is building a software competitive advantage in the smartphone market that competing platforms will find difficult, if not impossible to challenge"

That's a pretty bold statement. I personally don't see anyone truly competing with the iPhone. Apple came in with the iPod and stole the entire market. We're watching it happen all over again, right before our very eyes.
post #15 of 38
This is the smartest thing Munster has said recently (other than his buy recommendation)...

Quote:
"...he expects Steve Jobs to return to the company, though possibly in a reduced role such as Chairman with Tim Cook adopting the permanent CEO role."

I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #16 of 38
Quote:
Originally Posted by SpamSandwich View Post

This is the smartest thing Munster has said recently (other than his buy recommendation)...



I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.


I really would be surprised if this happened. Once your the boss you don't want to be under someone again.


anyway that is what delegation is for. haha
Forgo Looking At The Past As A Judge; Instead Be a Student.
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Forgo Looking At The Past As A Judge; Instead Be a Student.
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post #17 of 38
Quote:
At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise

To add salt to the wound, MSFT is up 10% after reporting their first ever decline in quarterly revenue and their quarterly profits are off -32% as compared to a +15% in AAPLs quarterly earnings.

I have to admit that MSFTs P/E is pretty low for a company earning as much per share,and paying a dividend, as they do and with the Cash in the bank that they have.

Quote:
Possibly linked to Apple cutting 1,600 retail jobs?

Reference above numbers and consider Mr. Softy is cutting 5000 actual jobs. The "1600" is just a reduction in the number of hours consumed at Apple retail, not necessarily a reduction in staff. I think thats a pretty good idea, while it was neat, it always seemed they have about 30% more employees than space permitted in their retail stores.
post #18 of 38
Quote:
Originally Posted by SpamSandwich View Post

This is the smartest thing Munster has said recently (other than his buy recommendation)...

I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.

Anything like that would remind me of Bill Gates and his useless roles of "Chief Software Architect", "Chief Dumbass My-Fridge-Uses-Windows Clairvoyant" and "Chief Eternal Predictor of Successful Windows Tablets"...

SJ is NOT like that and will NOT settle with a symbolic role that has no decision-making power.
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post #19 of 38
Quote:
Originally Posted by brlawyer View Post

Anything like that would remind me of Bill Gates and his useless roles of "Chief Software Architect", "Chief Dumbass My-Fridge-Uses-Windows Clairvoyant" and "Chief Eternal Predictor of Successful Windows Tablets"...

SJ is NOT like that and will NOT settle with a symbolic role that has no decision-making power.

Jobs would still have input on product and direction of the company, but Cook would have to make the final decisions. Jobs has seen his mortality with these illnesses, and would likely understand this new reality. He wouldn't endanger Apple just to feed his ego. The fact that he did in fact take a leave of absence is proof of that. Otherwise, he would work at the helm until he dies or crashes the company. (Guess it's obvious I have Star Trek metaphors on the mind right now... can't wait to see the reboot!)

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #20 of 38
Quote:
Originally Posted by Virgil-TB2 View Post

Your analysis of how the stock market works is spot on, but this comment is patent nonsense.

If you want to speculate on what the impact of future hardware releases will be, you have to include the fact that Apple is itself going to be releasing new hardware in a month or two. There is absolutely no reason, based on the information available to expect Apple's leading position in the smart-phone horse race to change much at all, let alone go down because of the hypothetical introduction of "smarter" phones from other quarters.

Apple currently has the best product in the category and all indications are that the iPhone 3.0 products will be similarly so.

You've woven this fantasy out of pure hot air.

I was merely mentioning that Apple has done well with the iPhone and to use extreme caution right now. The iPhone is doing well, the netbook, while great on paper and possible by Apple, it doesn't have a place right now between the air and MacBook.

If you a or anyone is serious, to to message boards and watch to see what company execs do. I have seen sting buys only to see an executive dump millions of shares a few days later, sure enough, about a week after the dump, news comes out that damages the stock price, just a tip. Also visit sites like the register or inquirer as these site will have info weeks before it makes it to wall street and most owners if these site will understand Wallm Street.

With regard to new iPhone, sure it will probably be great but none of this changes the fact that millions of users will have contracts expire in June, the same time that near smartphones are supposed to come out. If any if these non iPhones have an app store, flash and tethering, this could be a headache for Apple.

We've never seen Apple at a time like this so we don't know what will happen. Now imagine microsoft releases the new os without having to worry about 6 more various operating systems and runs fine on older hardware.

IMHO and this is all it is, an opinion, personally I believe Apple could be facing situations it's never had to face before. Worse is when you have a failing economy, expected to get worse, and all stock firms suggest a string buy. Normally when you see this, use caution.

Cheers.
post #21 of 38
Quote:
Originally Posted by SpamSandwich View Post

Jobs would still have input on product and direction of the company, but Cook would have to make the final decisions. Jobs has seen his mortality with these illnesses, and would likely understand this new reality. He wouldn't endanger Apple just to feed his ego. The fact that he did in fact take a leave of absence is proof of that. Otherwise, he would have worked until he died at the helm.

Well, if he is at the stage of passing the helm, he is either dead or seriously ill already, so any symbolic roles are irrelevant.

On the other hand, if SJ is back on track by June, he will be firing on all cylinders...nothing less.
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post #22 of 38
Quote:
Originally Posted by brlawyer View Post

Well, if he is at the stage of passing the helm, he is either dead or seriously ill already, so any symbolic roles are irrelevant.

On the other hand, if SJ is back on track by June, he will be firing on all cylinders...nothing less.

I don't see it as quite so black and white. Based on the professional medical opinions of doctors familiar with his condition, I happen to think his time and position with Apple in the not-so-distant future is limited, but I still wish him well.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #23 of 38
Quote:
Originally Posted by Gyokuro View Post

At this moment the DOW is up plenty as wall as the NASDAQ but APPL is down almost 2 bucks. Someone help me understand this in light of the article's information and gushing praise.

Back to work.

Apple lost a patent infringement suit today. That may be a reason, just a though....
post #24 of 38
Quote:
Originally Posted by SpamSandwich View Post

This is the smartest thing Munster has said recently (other than his buy recommendation)...



I wouldn't mind seeing Jobs take on the role of "Chief Visionary" or some such title and pass the torch to Cook while it still makes sense. Apple is doing great, despite the pressures of this economy, and the world didn't end when Jobs took his leave of absence.

Actually, the Wall Street Journal or the New York Times had speculated that in a story about two or three weeks ago. I am unable to recall either the name of the author or the publication, so unfortunately, I can't point you to a link (but I remember thinking at that time, "wow, that's a pretty smart observation.").

Wait a second: a dreaded thought passes through.... it could be Shaw Wu that WSJ or NYT was quoting, now that I think about it!
post #25 of 38
Quote:
Originally Posted by SpamSandwich View Post

Jobs would still have input on product and direction of the company, but Cook would have to make the final decisions. Jobs has seen his mortality with these illnesses, and would likely understand this new reality. He wouldn't endanger Apple just to feed his ego. The fact that he did in fact take a leave of absence is proof of that. Otherwise, he would work at the helm until he dies or crashes the company. (Guess it's obvious I have Star Trek metaphors on the mind right now... can't wait to see the reboot!)

I didn't realize you were so close to Steve Jobs to speak for him.
post #26 of 38
Quote:
Originally Posted by OriginalG View Post

Possibly linked to Apple cutting 1,600 retail jobs?

Although explained above, let's make it clear: Apple did NOT cut 1,600 jobs. If they did, we should know, because the rules require this to be announced, and there wold be severance spendings associated with this.

It is amazing how creative some guys are at spreading FUD when it comes to Apple! How that happens that Microsoft's results are OK, pretty good for the current environment. Yes, and Apple's is also pretty good, no need for discount because of the economy. And surprise! surprise! Microsoft is going to update its software in the forceable future, they have an amaizing product pipeline, that is. Like Apple does not?

And those hints about "smarter phones"! Rest assured, the best which could happen to Palm along with it's Pre is to be acquired by Microsoft. Well, the Pre may have better luck than the bestseller Zune (BTW, to you remember the hype about the fact that MS is going to ship - to the store shelves that is, not to the real customers - ONE MILLION UNITS IN ONE YEAR!!! - amazing!!!), but the iPhone and the AppStore ARE YEARS AHEAD OF THE COMPETITION. Most of the people just don't get it! The iPhone might not be the best phone on Earth, but it's potential is enormous! The talk about the lack of multitasking and this feature and those feature bla-bla-bla should not hide the big picture. The forthcoming third-party hardware support is going to give a hefty boost to the already powerful iPhone/iPod ecosystem. Add the AppStore and you have a combination which can not be challenged for at least a couple of years.

Many seem to be obsessed by the netbook numbers. Don't get me wrong! I want a sub-notebook from Apple. But I trust their management and I am sure they know better what they are doing. My point is about those marketshare numbers which have the netbooks added to the total number on par with the normal notebooks. It makes no economic sense to treat them that way. I can guess Apple makes more money on one iPod touch than Acer makes on 3 netbooks, but they are a separate category. If you look the consumer side: all those people who buy netbook are knowingly making a compromise. They want a more portable sub-computer, and they don't want to spend a lot of money on it. That's it. They don't even expect to really enjoy it. I am pretty sure no one is tempted to buy a netbook.

Apple is different. Sometimes when a new product comes out I can hardly resist to buy it not because I really need it that much, but because I like it! Because of the budget constraints I may end up buying something cheeper from time to time, but this only re-inforces my feeling towards Apple. Every time I see something working not-quite-like-you-would-expect, I know: there IS a better way!
post #27 of 38
Quote:
Originally Posted by shadow View Post

Although explained above, let's make it clear: Apple did NOT cut 1,600 jobs. If they did, we should know

Haven't looked at the news today, have you? -> Apple cuts 1600
post #28 of 38
Quote:
Originally Posted by Chris_CA View Post

Haven't looked at the news today, have you? -> Apple cuts 1600

"The reduction of numbers wasn't a result of any particular directive or massive layoff, Apple just slowed hiring as the normal high turnover of retail lowered job numbers."
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post #29 of 38
Quote:
Originally Posted by AppleInsider View Post

Morgan Stanley's Kathryn Huberty maintained an Equal Weight rating with a price target of $105, up from $100.

Hello from Earth, Ms. Huberty!
post #30 of 38
Quote:
Originally Posted by hiimamac View Post

With regard to new iPhone, sure it will probably be great but none of this changes the fact that millions of users will have contracts expire in June,

How many millions will that be hii ? Can you share your thoughts re the percentage you expect to switch to another phone?

Thanks
post #31 of 38
Quote:
Originally Posted by Chris_CA View Post

Haven't looked at the news today, have you? -> Apple cuts 1600

Let's look at FTEs from a year ago, and then extrapolate for the additional stores.

Here are the numbers:

March 2008 = ~12,000 FTEs

March 2009 = ~14,000 FTEs

Both figures were preceded by the word approximately, so they are clearly + or - 500 FTEs. Around 17% more FTEs this year than last, HOWEVER, you have to factor in the number of stores open.

March 2008 = 205 stores

March 2009 = 251 stores

So, number of stores increased by 22%, and FTEs increased roughly 17%, but given the vagueness, the range would be from, 8% to 26%.

In other words, the increase is in the margin of error. Much ado about very little.
post #32 of 38
Caris and company? So that's what that cow is doing now!
post #33 of 38
What about Andy Zacky?! Has he stopped shorting AAPL? It's funny because his original Q2 estimate was pretty close to actual numbers.
post #34 of 38
Quote:
Originally Posted by Chris_CA View Post

Haven't looked at the news today, have you? -> Apple cuts 1600

Thats exactly my point. Someone was clever enough to make [negative] news out of nothing and everybody, the mac enthusiasts sites including, picked up the "news". My understanding is better explained here:

Did Apple Just Fire 1,600 Retail Workers? Nope.

Quote:
Question of the day: Did Apple somehow lay off 10 percent of its retail staff in the last quarter without anyone noticing until today? Answer: No.
...
But lets be clear: Those arent 14,000, or 15,600, employees. Those are 14,000, or 15,600 full-time equivalentsbasically, an accounting term that measures the number of man-hours Apple (AAPL) is paying for, not the number of men (or women) it employs. So the very strong likelihood here is that Apple cut a lot of workers hours, but not workers themselves.
post #35 of 38
Quote:
Originally Posted by OriginalG View Post

Possibly linked to Apple cutting 1,600 retail jobs?

Their "full-time equivalent" employees went down by 1600, but that could also mean that they knocked down 3200 employees to part time (with two of each then being equivalent to one full-timer). I guess that wouldn't be as bad.
post #36 of 38
Damn target prices are all over the place. Apple must have the weirdest way of accounting than any other company. Nobody can figure out what Apple is worth. That guy Abramsky was so far off, it's unbelievable. K. Huberty will never be able to come close to guessing Apple's value. All these people are looking at one company and yet get such widely varied figures. I didn't know evaluating a company's worth was that difficult. Apple's share price may never go up if nobody is able to determine the company's value. Too bad. A company loaded with cash, retail stores, deferred revenue and decent product line with high profit margins turns out to be no better an investment than RIM which doesn't have any of that.
post #37 of 38
Apple's market cap is 111B. Take out the $29 in cash and it is $82B. Last quarter earnings were $1.66B if all the deferred iPhone and TV earnings are recognized. If the interest on $29B is taken out, earnings should be around $1.6B. For simplicity if those earnings are annualized, then operating PE is a lowly 12 at the current run rate.
post #38 of 38
For those of you who believe Apple should venture into the netbook market:

Acer Leads Netbook Market as Profit Drops 31 Percent

Quote:
Acer has taken the lead in the netbook market, shipping more than five million last year to top competitor ASUS. But Acer also reported its first-quarter profit dropped 31 percent, and Acer reduced its sales forecast for the year. While netbook sales are the hottest computer category, the profit margins are small and require volume sales.

Acer sold more than 5 million netbooks and their profit is down 31%!! Witness the difference between volume sales and margin sales.

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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