50M iPhone sales, 'booming' iPad mini expected in Apple's holiday quarter

Posted:
in AAPL Investors edited January 2014
Upside to market consensus on Apple is expected from one Wall Street analyst, who sees a big holiday quarter for both the iPhone 5 and iPad mini.

Evercore


Rob Cihra of Evercore Partners updated his projections for Apple's December quarter on Thursday in anticipation of the company's quarterly earnings report, scheduled for Jan. 23. Cihra expects Apple to report sales of 50 million iPhones, a 35 percent year over year increase and 86 percent growth from the previous quarter.

As for Apple's newly expanded iPad lineup, Cihra believes the company sold 24 million touchscreen tablets in the quarter, representing 56 percent year-over-year growth and a 71 percent boost from the September quarter.

In particular, he expects iPad growth to be driven by the iPad mini, which he believes accounted for 10 million units during the quarter. Cihra also noted that supply of the iPad mini remains constrained with strong demand continuing after what he called a "booming launch."

Evercore


While strong performances are expected from the iPhone and iPad, Cihra believes Mac sales will decrease 3 percent year over year, hitting 5 million units in the December quarter. He attributed his forecast to limited early supply of the new iMac desktops.

Apple's record setting pace in the December quarter is expected to have consequences going forward, though. Cihra believes the company's rapid roll-out of the iPhone 5 will lead to production cuts in the March quarter, where he has forecast sales of 39 million units.

Cihra has trimmed his price target for AAPL stock to $750, down from his previous forecast of $775. But he has also maintained his "overweight" rating for the stock, and noted his figures are "wholly conservative."
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Comments

  • Reply 1 of 52
    ifij775ifij775 Posts: 470member
    Revenue on Nook readers and books down 12.6% from a year ago. Tablets are killing the e-reader market.
  • Reply 2 of 52


    Of course we are now going to hear all the good news. Have to drive that stock price up past $700 after trying so hard to drive it below $500.

     

  • Reply 3 of 52
    blackbookblackbook Posts: 1,361member

    Quote:

    Originally Posted by island hermit View Post


    Of course we are now going to hear all the good news. Have to drive that stock price up past $700 after trying so hard to drive it below $500.

     



    Smart investors are buying up Apple stock now. It's almost like an after Christmas clearance sale for the stock.

  • Reply 4 of 52
    tbelltbell Posts: 3,146member


    Except these types of comments do not help Apple because they greatly exceed Apple's own conservative guidance. Apple can beat last year's sales on all accounts, but if it fails to exceed these inflated guesses the stock will be hammered. The big boys, however, will likely make sure they are in on dividend day. 

  • Reply 5 of 52
    jragostajragosta Posts: 10,473member
    Of course we are now going to hear all the good news. Have to drive that stock price up past $700 after trying so hard to drive it below $500.

     

    That's not the way it works. This week, we'll have analysts trying to out-do themselves with their estimates of how many trillion phones Apple sold and zillions of tablets. Then, when Apple 'only' sells 20% more than their guidance, the stock will plummet.
  • Reply 6 of 52

    Quote:

    Originally Posted by jragosta View Post





    That's not the way it works. This week, we'll have analysts trying to out-do themselves with their estimates of how many trillion phones Apple sold and zillions of tablets. Then, when Apple 'only' sells 20% more than their guidance, the stock will plummet.


     


    Well, the stock will plummet for good reason because, as you know, the iPad is losing market share.


     


    /s

  • Reply 7 of 52
    jragostajragosta Posts: 10,473member
    Well, the stock will plummet for good reason because, as you know, the iPad is losing market share.

    /s

    Absolutely. 79% of 100 M units is obviously far worse than 80% of 10 M units.
  • Reply 8 of 52
    tbelltbell Posts: 3,146member

    Quote:

    Originally Posted by jragosta View Post





    That's not the way it works. This week, we'll have analysts trying to out-do themselves with their estimates of how many trillion phones Apple sold and zillions of tablets. Then, when Apple 'only' sells 20% more than their guidance, the stock will plummet.


     


    If I were Apple, I would consider stopping to give such guidance. It isn't considered anyway. 

  • Reply 9 of 52
    charlitunacharlituna Posts: 7,205member
    tbell wrote: »
    Except these types of comments do not help Apple because they greatly exceed Apple's own conservative guidance. Apple can beat last year's sales on all accounts, but if it fails to exceed these inflated guesses the stock will be hammered. The big boys, however, will likely make sure they are in on dividend day. 

    Bingo. That seems to be it in a nutshell. Feels a bit like revenge for Apple not splitting stocks like all the analysts said they should and would
  • Reply 10 of 52
    Can anyone explain why Apple's current P/E is so damn low compared to its historical levels? Why should it be lower than Microsoft's and even Cisco's? It's been dropping for years. Isn't there anything Apple can do to reverse that trend. I've owned Apple for years and even despite the introduction of the iPhone and iPad, Apple's P/E keeps getting lower and lower. The more products Apple sells, the lower the P/E gets. What makes it so different from other companies in this respect? I could understand if Apple's sales have stagnated, but they haven't. The P/E should have at least leveled out at some point.
  • Reply 11 of 52
    monstrositymonstrosity Posts: 2,194member

    Quote:

    Originally Posted by charlituna View Post





    Bingo. That seems to be it in a nutshell. Feels a bit like revenge for Apple not splitting stocks like all the analysts said they should and would


    You know 'splitting stocks' does nothing of particular good don't you?  


    It's just fodder for the analysts to get newbies excited over nothing.

  • Reply 12 of 52
    aaarrrggghaaarrrgggh Posts: 1,570member
    So, who thinks they can do better at guessing Apple's sales and margin? It is actually a pretty good analysis; it is about 10% higher on iPhones than I expect, and I think his ipad number is about 20% high (but I am staying conservative), but it gives you the numbers if you want to play the game yourself. The real question mark is on margin.

    I think his numbers would be a Q1 $17 EPS, or a TTM EPS of $47... Which would likely keep us range-bound between $517 and $705 until the March quarter results come in. We will be at the bottom end when the debt ceiling bickering comes around next time, and the top end at some other point.

    At this point, why not have some fun with the swings? Until Apple provides a more significant dividend, you can make some good money... If you can take the stress. If not, hey... You can always put your cash under the mattress.
  • Reply 13 of 52
    aaarrrggghaaarrrgggh Posts: 1,570member
    You know 'splitting stocks' does nothing of particular good don't you?  
    It's just fodder for the analysts to get newbies excited over nothing.

    Not entirely true. The high share price favors bigger players, especially in terms of options. It might not impact the company's financials, but it does impact retail investing.
  • Reply 14 of 52

    Quote:

    Originally Posted by aaarrrgggh View Post





    Not entirely true. The high share price favors bigger players, especially in terms of options. It might not impact the company's financials, but it does impact retail investing.




    I'm not sure how buying 10 shares at $540 makes anyone feel any better than buying 1 share at $540.


     


    If someone can't afford to buy one share then they shouldn't even be considering buying stocks.


     


    jmho

  • Reply 15 of 52
    aaarrrggghaaarrrgggh Posts: 1,570member
    Can anyone explain why Apple's current P/E is so damn low compared to its historical levels? Why should it be lower than Microsoft's and even Cisco's? It's been dropping for years. Isn't there anything Apple can do to reverse that trend. I've owned Apple for years and even despite the introduction of the iPhone and iPad, Apple's P/E keeps getting lower and lower. The more products Apple sells, the lower the P/E gets. What makes it so different from other companies in this respect? I could understand if Apple's sales have stagnated, but they haven't. The P/E should have at least leveled out at some point.

    In theory, a stock's value is the present value of future profits (less liabilities plus cash). "Accelerating" earnings growth makes small profits today potentially worth much more in the future. Constant earnings growth rates that exceed "cost of capital" are worth marginally more in the future, but as earnings growth flattens then future earnings are worth less than if the money was made today.

    So, if earnings are constant each year (say $1), the present value at 10% interest would be
    $1+(1-10%)*$1+(1-10%)^2*$1+(1-10%)^3*$1+(1-10%)^4*$1...

    Ultimately, you would end up with the stock being worth $7 or so in that case. If the company had $1/share in cash you might pay $8, or if it had $1/share debt it might only be worth $6.

    But, if earnings growth is at 10%, the company would be worth more, and at 20%, significantly more. The market doesn't have a good sense of what Apple's long term growth prospects are, as revenue approaches some percentage of world GDP.
  • Reply 16 of 52
    aaarrrggghaaarrrgggh Posts: 1,570member
    I'm not sure how buying 10 shares at $54 makes anyone feel any better than buying 1 share at $540.

    If someone can't afford to buy one share then they shouldn't even be considering buying stocks.

    jmho
    Simple... If they only have one share, what can they do to take some money out but keep the rest in? Moreover, trading in small lots gives you worse prices and higher commissions, limiting your ability to profit. A block of Apple is $55k today; that only helps large investors and options traders.
  • Reply 17 of 52


    I love when people think there is anything approaching rationality behind stock prices vs. any other metric they can recall. I also love when people think a single stock lives in its own economic microcosm, as if nothing external to the company's performance could possibly affect its stock price.


     


    Face it, the stock market is a glorified Kickstarter mixed with a healthy dose of Vegas, ruled by the same emotional and irrational expectations of the masses, except only the high rollers get free drinks.


     


    Perhaps I sound a bit more negative than I actually mean to but every word is true.

  • Reply 18 of 52

    Quote:

    Originally Posted by aaarrrgggh View Post





    Simple... If they only have one share, what can they do to take some money out but keep the rest in? Moreover, trading in small lots gives you worse prices and higher commissions, limiting your ability to profit. A block of Apple is $55k today; that only helps large investors and options traders.


     


    Worse prices and higher commissions? I think you should really think about what you are saying or maybe you should stay away from trading stocks.


     


    As far as taking some out and keeping the rest in... yes, that applies if you only have $1000 to spend... but then again, if you only have $1000 to spend then you should "really" worry about commissions if you continue to buy and sell... even if the stock is only $10 per.

  • Reply 19 of 52
    jragostajragosta Posts: 10,473member

    I'm not sure how buying 10 shares at $540 makes anyone feel any better than buying 1 share at $540.

    If someone can't afford to buy one share then they shouldn't even be considering buying stocks.

    jmho

    What if someone has $800 to invest? 1 share at $540 or 14 at $54. Or if they have an investment plan where they invest $400 per month. Or any other scenario. Not to mention that even if they have $2700 to invest. For some people, buying only 5 shares of something seems strange.

    I agree that it's not that big a deal, but it certainly keeps some small investors out. And given the way the institutions are beating the stock around, having a larger share of small investors would probably not be a bad thing.
  • Reply 20 of 52
    allenbfallenbf Posts: 993member

    Quote:

    Originally Posted by silverpraxis View Post


    I love when people think there is anything approaching rationality behind stock prices vs. any other metric they can recall. I also love when people think a single stock lives in its own economic microcosm, as if nothing external to the company's performance could possibly affect its stock price.


     


    Face it, the stock market is a glorified Kickstarter mixed with a healthy dose of Vegas, ruled by the same emotional and irrational expectations of the masses, except only the high rollers get free drinks.


     


    Perhaps I sound a bit more negative than I actually mean to but every word is true.



     


    This sums it up as well as I've ever read.

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