Apple Cheat Sheet: What To Expect from Apple’s Earnings
AAPL Climbing As Market Drops
Stocks are trading lower on Monday after the market’s best two-week run since 2009 as Germany said a forthcoming summit would not yield a definitive solution to Europe’s debt crisis. Shares of AAPL were flat after the open but are currently climbing, lifted by good iPhone sales this past weekend (see below). Catalysts include fiscal fourth quarter earnings release TOMORROW at 5:00 pm ET; upgrade cycle and conversion to the iPhone 4S and response to the free iPhone 3GS; update to the iPad; continued growth of the Mac business line; mobile adoption in China and emerging markets; iCloud / iOS 5 rollout and adoption; the continued evolution of Apple TV; and platforms such as mobile advertising (iAd), books / publishing and social (Ping). Shares of Apple trade at 10.9x Enterprise Value / Trailing Twelve Months Free Cash Flow(including long-term marketable securities).
LIVE Coverage Of Apple’s Fiscal Fourth Quarter Earnings Tomorrow (Silicon Alley Insider)
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Analysts Predict That Apple Will Deliver A Stellar Quarter (Various)
Like that isn’t a given. Street is at $29.9B in revenue at EPS of $7.29/share.
- Deutsche Bank: Chris Whitmore believes that Apple to deliver another strong quarter. Apple remains the dominant force in mobility and maintains an enormous competitive lead (App store, HW/SW integration, iOS 5, etc). Although he expects conservative December guidance, iPhone, iPad and Macs continue to track strongly. Apple remains his top pick.
- Ticonderoga: Brian White is raising his estimates to $30.78 billion and EPS of $7.87. He continues to believe investors have plenty to look forward to from Apple this year, including stronger than expected demand for the iPhone 4S, a strengthened digital ecosystem with the recent launch of the iOS 5 and iCloud, the continued momentum around the iPad 2 and the robust uptake of the new MacBook Air. He believes Apple represents the most attractive tech stock to own.
- Wedbush: Scott Sutherland is raising his holiday quarter estimates, as checks indicate record domestic demand for the iPhone 4S and he expects robust global sales. He also anticipates Apple to report solid fiscal fourth quarter results tomorrow, though anticipate typical conservative guidance. With 24% long-term EPS growth expected through fiscal 2015, he find shares attractively valued.
- Citigroup: Richard Gardner says that despite significant year-to-date outperformance, Apple shares are his top large-cap hardware pick. He expects the company to report significant upside to consensus revenue and EPS estimates tomorrow and he is raising his quarterly estimate as well as his fiscal year 2012 estimates accordingly. Valuation, at just 10X forward-twelve-month operating EPS (ex-tax effected net cash), remains conservative even after a run in the stock.
Then there’s this guy who just downgraded Apple.
Apple Sells 4 Million iPhones In First Weekend (AppleInsider)
The phone’s on fire. The iPhone 4S got off to a record breaking start over the weekend, selling a total of 4 million units in its first three days of availability. “iPhone 4S is off to a great start with more than four million sold in its first weekend—the most ever for a phone and more than double the iPhone 4 launch during its first three days,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. That more than doubles the company’s previous record of 1.7 million iPhone 4 units sold in the summer of 2010.
iPad 3 Heading Into Production Early? (All Things Digital)
Since the iPhone 4S is old news, rumors are starting to gather surrounding iPad 3 production. According to Susquehanna Financial analyst Jeff Fidacaro, the device is headed into production. Supply chain checks suggest that Apple is ramping up its fourth-quarter iPad builds to between 12 and 14 million, from between 11 million and 13 million. And, importantly, that upward adjustment is due in part to an early iPad 3 production run. Couldn’t just be a holiday demand adjustment?
Apple Fans Show Their Loyalty, 73% Of iPhone 4S Buyers Are Upgrades (AppleInsider)
Piper Jaffray analyst Gene Munster polled 550 people at Apple retail stores Friday morning regarding iPhone 4S purchase patterns. In all, 73% of iPhone 4S buyers said they are upgrading from a previous version, compared with 77% for the iPhone 4 launch in 2010, 56% in 2009, and 38% in 2008. That’s some brand loyalty building.
iPhone 4S Grabbing Blackberry Users (Electronista)
Buyers being switchers from the BlackBerry and other platforms to get the new iPhone 4S. In a similar poll, UBS analyst Maynard Um saw 75% coming from an existing iPhone versus 80% a year ago. Of the remaining group, about 10% were jumping from a BlackBerry, while 5% each were coming from LG and Samsung phones; 4% were coming from Motorola. Rest in peace Research In Motion.
The iPhone 4S Is Anything But A Disappointment, Breaking Sales Records (AppleInsider)
Sprint confirmed that launch day sales of Apple’s iPhone 4S and iPhone 4 topped the carrier’s previous one-day sales record, taking only four hours for Sprint to break its previous one-day sales record after starting nationwide sales this morning. While AT&T has yet to announce sales numbers, the company released a statement saying that is “is on-track to double (its) previous record for activations on a single day.”
Apple Spent $750 Million On Data Center So Far (Asymco)
Apple has already sunk at least $750 million into its North Carolina data center according to filled financials. Roughly $1 billion was spent on PP&E in 2010; the $750 million figure comes from deducting an estimated $250 million dedicated to the future “spaceship” campus. And that figure only includes the building itself. The original goal was to spend invest $1 billion in the facility over nine years, but Apple may already be well past that amount. The data center mainly exists to support iCloud, a set of iOS- and Lion-focused Internet services.
Acer Says Apple Will Fall To Android BGR
Acer founder Stan Shih thinks Apple’s days at the top are numbered (are they at the top?), and Google’s Android operating system will be the victor in the industry’s heated mobile platform wars. Mildly self-serving considering the two companies will develop solutions that optimize Android’s speed and performance. Shih believes that Android-powered, Atom-based mobile devices will outsell Apple’s portable gear.
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