Earnings preview: Apple expected to deliver $25B quarter on 16.5M iPhones

2

Comments

  • Reply 21 of 52
    aaarrrggghaaarrrgggh Posts: 1,609member
    I couldn't resist taking a little profit today and investing in something more stable. Still have plenty of exposure, but I do think it is possible to see AAPL at $350 next week. I'm having trouble understanding how they could maintain 60% growth much longer; 30% long-term is not a problem in my book, but I can't see the market paying even a 15 P/E for Apple at 30% growth.
  • Reply 22 of 52
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by Dr Millmoss View Post


    In my experience (14 years as an AAPL investor), Apple has to beat the street consensus by at least 10% to sustain a rally. Meaning: if reported earnings are not in the neighborhood of $6.50 we are likely to see a selloff after hours and/or tomorrow. Not that any of this momentary stuff should matter too much to investors. The macro story is that AAPL is on a long term trend towards lower multiples, which means that earnings increases probably will not result in proportional increases in shareholder value.



    Also worth keeping in mind is AAPL's strong rally in anticipation of this earnings report, over the last couple of weeks. Sustaining that sort of momentum will require as massive blowout report, something like $7.00 or more with no blemishes on margins, revenues or guidance. That kind of trifecta is rare, even for Apple.



    Maybe.
  • Reply 23 of 52
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by aaarrrgggh View Post


    I couldn't resist taking a little profit today and investing in something more stable. Still have plenty of exposure, but I do think it is possible to see AAPL at $350 next week. I'm having trouble understanding how they could maintain 60% growth much longer; 30% long-term is not a problem in my book, but I can't see the market paying even a 15 P/E for Apple at 30% growth.



    That of course would be crazy. It's interesting that companies with 10% growth are given multiples higher than what Apple has now. If Apple drops to a 25% growth, it would be worth a 25 multiple.
  • Reply 24 of 52
    dr millmossdr millmoss Posts: 5,403member
    Over the last few years the markets collectively have been questioning how Apple can sustain annual earnings growth rates above 50%, but the company has managed it just the same. You can argue all you like with market psychology but you will rarely win that argument.
  • Reply 25 of 52
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by melgross View Post


    Maybe.



    Um, maybe what? (I did cover some ground in that post.)



    Quote:
    Originally Posted by melgross View Post


    That of course would be crazy. It's interesting that companies with 10% growth are given multiples higher than what Apple has now. If Apple drops to a 25% growth, it would be worth a 25 multiple.



    If Apple's earnings growth rate dropped to 25% annually, the multiples could also be expected to drop. Investors are already dramatically underpricing Apple's growth rates, so that hardly suggests that they'd start placing a premium on earnings growth if the rate actually declined. What we'd see more likely is a MSFT-like scenario, with multiples falling into the low teens and very dull performance. Value stock. We're already headed that way anyway.
  • Reply 26 of 52
    aaronjaaronj Posts: 1,595member
    Quote:
    Originally Posted by melgross View Post


    I've been seeing those crazy numbers on a number of sites beginning a bit over a week ago. Some software is bugging out.



    Heh. Yeah, who knows what's going on?



    Quote:

    Apple has moved down to about a buck up. But the overall market is still doing well. I wonder if so e late in for has come out, though I can't find anything, or if profit taking has already begun. Of course, some manipulation ahead of the report is also possible.



    I tend to see Apple move in ways, in the short term, opposite of what one might think. I don't pretend to know what the hell I'm talking about, though.



    The report is probably going to be fantastic, then the price will drop as people do ... something.



    I'm in it for the long haul, though. So little bumps and drops never really concern me that much, since it seems to go up and up, over the long run.
  • Reply 27 of 52
    brucepbrucep Posts: 2,823member
    Quote:
    Originally Posted by melgross View Post


    The market is up all around, about as much as Apple is, due to the news about housing. I expected Apple to be up more



    Well we saw goog jump a lot on a little bit of good news and apple may just jump also.

    Appl is up a bunch this last 9 days .



    so we may see appl streaking up on great news past 400 !!!!



    or sell down to 342 on great news ,





    yea yea

    take

    ,,,,,,take a

    a walk on the wild side



    and the colored girls go ... ,,, ,, , , ,
  • Reply 28 of 52
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by Dr Millmoss View Post


    Um, maybe what? (I did cover some ground in that post.)



    As I said, maybe. It's not always true, that is, what you were saying. I've seen it go both ways. You're correct, but not for each instance.



    Quote:

    If Apple's earnings growth rate dropped to 25% annually, the multiples could also be expected to drop. Investors are already dramatically underpricing Apple's growth rates, so that hardly suggests that they'd start placing a premium on earnings growth if the rate actually declined. What we'd see more likely is a MSFT-like scenario, with multiples falling into the low teens and very dull performance. Value stock. We're already headed that way anyway.



    in Apples' case, no doubt.



    MSs' growth last year was about 8.5%. it's hardly comparable. Their net margins have also been going down over time.
  • Reply 29 of 52
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by brucep View Post


    Well we saw goog jump a lot on a little bit of good news and apple may just jump also.

    Appl is up a bunch this last 9 days .



    so we may see appl streaking up on great news past 400 !!!!



    or sell down to 342 on great news ,





    yea yea

    take

    ,,,,,,take a

    a walk on the wild side



    and the colored girls go ... ,,, ,, , , ,



    I'd love to know what you're on, Bruce.
  • Reply 30 of 52
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by melgross View Post


    As I said, maybe. It's not always true, that is, what you were saying. I've seen it go both ways. You're correct, but not for each instance.



    As have I. It's a rule-of-thumb, not a law. But if I were a betting man, that's how I'd wager. We shall see for this quarter soon enough!



    Quote:

    in Apples' case, no doubt.



    MSs' growth last year was about 8.5%. it's hardly comparable. Their net margins have also been going down over time.



    I'm not predicting that AAPL will become MSFT any time soon, but the trend is already in that direction and would only accelerate if Apple started posting earnings gains closer to 25%.



    So how about that dividend?
  • Reply 31 of 52
    My estimate (I think is a tad conservative).



    Category Units ASP Revenue

    Mac 4.05 1290\t 5228

    iPod 8.5\t 175\t 1488

    iPhone 18\t 650\t 11700

    iPad 7.5\t 600\t 4500

    iTunes\tNA\t NA\t 1850

    Others\tNA\t NA\t \t1350

    TOTAL: 26116



    EPS $6.82
  • Reply 32 of 52
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by Dr Millmoss View Post




    So how about that dividend?



    I've been giving that some thought. With Apple spending on patents (twice), getting caught and having to pay for patents (Nokia), plus other large expenses, I think we're further away than ever.



    They wouldn't even talk about it at the shareholders meeting. We'll have to see what the cash is this time. If they subtract these expenses then it won't be too much. Or it will simply come out of profits. I keep thinking that it will pull down the bottom line a bit, depending on how much they had to pay right now.
  • Reply 33 of 52
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by melgross View Post


    I've been giving that some thought. With Apple spending on patents (twice), getting caught and having to pay for patents (Nokia), plus other large expenses, I think we're further away than ever.



    They wouldn't even talk about it at the shareholders meeting. We'll have to see what the cash is this time. If they subtract these expenses then it won't be too much. Or it will simply come out of profits. I keep thinking that it will pull down the bottom line a bit, depending on how much they had to pay right now.



    I've never expected a dividend that can't easily be paid out of cash flow. I suspect the objection on the part of the board to paying even a modest dividend is more religious than practical. They always avoid answering that question at stockholder's meeting, so that's nothing new.
  • Reply 34 of 52
    dr millmossdr millmoss Posts: 5,403member
    EPS $7.79. Can that be right?
  • Reply 35 of 52
    island hermitisland hermit Posts: 6,217member
    Quote:
    Originally Posted by Dr Millmoss View Post


    EPS $7.79. Can that be right?



    Crazy man... crazy!! [on edit: 7.79 does sound high]



    20.34 million iPhones! 9.25 million iPads!!



    Yowzer!!
  • Reply 36 of 52
    melgrossmelgross Posts: 33,510member
    Whoa! The numbers are off the wall! $11.1 billion cash flow.
  • Reply 37 of 52
    originalgoriginalg Posts: 383member
    Quote:
    Originally Posted by Dr Millmoss View Post


    EPS $7.79. Can that be right?





    "Sustaining that sort of momentum will require as massive blowout report, something like $7.00 or more..."
  • Reply 38 of 52
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by Dr Millmoss View Post


    EPS $7.79. Can that be right?



    The numbers are crazy. Missed a bit on Macs and iPods, but everything else is in orbit.
  • Reply 39 of 52
    originalgoriginalg Posts: 383member
    Quote:
    Originally Posted by OriginalG View Post


    Hoping we'll see $400+ today!



    After Hours: 403.06 +26.21 (6.96%)
  • Reply 40 of 52
    melgrossmelgross Posts: 33,510member
    Apples' after hours trading was halted, but just resumed.



    The price as of a minute ago is:



    $399.93
Sign In or Register to comment.