Tuesday, July 21, 2009

Apple on deck for earnings


What's wrong with this picture?

Isn't it dated?

And isn't the number already 1.5 billion?

But that picture, perfectly tells the story on AAPL's earnings tonight, and AAPL's phony guidance.

Put a picture out for a billion Apps, when they've done 1.5 billion, and it's misleading.

But purposely underestimate your earnings numbers, and it's not. It's just Wall Street.

After all, isn't that how AAPL works?

So tonight's headline, will once again be, "Apple beats estimates."

Remember AAPL's phony estimate for last quarter? And after that phony guidance AAPL gave to analysts, they were still only at $1.12. Who believes that? Now the analysts have creeped numbers up a nickel to $1.17. Boy, what a bold call!

What did AAPL say after their last reported numbers?

This:

Looking ahead to the third fiscal quarter of 2009, we expect revenue in the range of about $7.7 billion to $7.9 billion and we expect diluted earnings per share in the range of about $.95 to $1.00.”

AAPL should come in with at least $1.42 for earnings, instead of the $1.17 the street has for estimates. After all didn't they estimate $.95 to $1.00? $1.42 is just 50% above their low end guidance. Just like the picture on the top of the page, that understates the number of Apps that AAPL has sold.

Why would it be any different here?

Analysts, of course, don't "estimate" what the company will make because that's Wall Street's game. Beat the numbers.

So here's the history of AAPL since 2005, on what they said they would do for earnings, and then what they did.

On January 12, 2005 Apple reported earnings and gave this guidance:

“We’re pleased to report 74 percent revenue growth, 26 percent Mac unit growth and 525 percent iPod unit growth,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second quarter of fiscal 2005, we expect revenue of about $2.9 billion and earnings per diluted share of about $.40.”

Revenues were $3.24 billion, and earnings were .68 cents. On April 13, 2005, Apple gave this for guidance:

“Looking ahead to the third quarter of fiscal 2005, we expect revenue of about $3.25 billion and earnings per diluted share of about $.28.”

Revenue was $3.52 billion, and earnings were .37. On July 13, 2005 Apple gave this guidance:

“Looking ahead to the fourth quarter of fiscal 2005, we expect revenue of about $3.5 billion and earnings per diluted share of about $.32.”

Apple posted revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share. On October 11, 2005 Apple gave this guidance:

“Looking ahead to the first quarter of fiscal 2006 which will span 14 weeks, we expect revenue of about $4.7 billion. We expect GAAP earnings per diluted share of about $.46, including an estimated $.03 per share expense impact from non-cash share-based compensation, translating to non-GAAP EPS of about $.49.”

Apple posted revenue of $5.75 billion and a net quarterly profit of $565 million, or $.65 per diluted share, in this 14-week quarter. On January 18, 2006, Apple gave this guidance:

“Looking ahead to the second quarter of fiscal 2006, we expect revenue of about $4.3 billion. We expect GAAP earnings per diluted share of about $.38, including an estimated $.04 per share expense impact from non-cash stock-based compensation, translating to non-GAAP EPS of about $.42.”

The Company posted revenue of $4.36 billion and a net quarterly profit of $410 million, or $.47 per diluted share. On April 19, 2006 Apple gave this guidance:

“Looking ahead to the third quarter of fiscal 2006, we expect revenue of about $4.2 to $4.4 billion. We expect GAAP earnings per diluted share of about $.39 to $.43, including an estimated $.04 per share expense impact from non-cash stock-based compensation, translating to non-GAAP EPS of about $.43 to $.47.”

The Company posted revenue of $4.37 billion and a net quarterly profit of $472 million, or $.54 per diluted share. On July 19, 2006 Apple gave this guidance:

“Looking ahead to the fourth quarter of fiscal 2006, we expect revenue of about $4.5 to $4.6 billion. We expect GAAP earnings per diluted share of about $.46 to $.48, including an estimated $.03 per share expense impact from non-cash stock-based compensation, translating to non-GAAP EPS of about $.49 to $.51.”

The Company posted revenue of $4.84 billion and net quarterly profit of $546 million, or $.62 per diluted share. On October 18, 2006 Apple gave this guidance:

“Looking ahead to the first fiscal quarter of 2007, we expect revenue of $6.0 to $6.2 billion and earnings per diluted share of $.70 to $.73.”

The Company posted record revenue of $7.1 billion and record net quarterly profit of $1.0 billion, or $1.14 per diluted share. On January 17, 2007 Apple gave this guidance:

“Looking ahead to the second fiscal quarter of 2007, we expect revenue of $4.8 to $4.9 billion and earnings per diluted share of $.54 to $.56.”

The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. On April 25, 2007, Apple gave this guidance:

“Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”

The Company posted revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. On July 25, 2007, Apple gave this for guidance:

“Looking ahead to the fourth fiscal quarter of 2007, we expect revenue of about $5.7 billion and earnings per diluted share of about $.65.”

The Company posted revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share. On October 22, 2007 Apple gave this guidance:

“Looking ahead to the first quarter of fiscal 2008, we expect revenue of about $9.2 billion and earnings per diluted share of about $1.42.”

The Company posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share. On January 22, 2008 Apple then gave this for guidance:

"Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94.”

The Company posted revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share. On April 23, 2008 Apple then gave this for guidance:

“Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00.”

The Company posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share. On July 21, 2008 Apple then gave this for guidance:

“Looking ahead to the fourth quarter of fiscal 2008, we expect revenue of about $7.8 billion and earnings per diluted share of about $1.00.”

The Company posted revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share. On October 21, 2008 Apple then gave this for guidance:

“Looking ahead, visibility is low and forecasting is challenging, and as a result we are going to be prudent in predicting the December quarter. We are providing a wide range for our guidance, targeting revenue of $9.0 to $10.0 billion and earnings per diluted share between $1.06 and $1.35.”

The company posted revenue of 10.71 billion and net quarterly profit of $1.61 billion or $1.78. On January 21, 2009 Apple gave this guidance:

“Looking ahead to the second fiscal quarter of 2009, we expect revenue in the range of about $7.6 billion to $8 billion and we expect diluted earnings per share in the range of about $.90 to $1.00.”

The Company posted revenue of $8.16 billion and a net quarterly profit of $1.21 billion, or $1.33 per diluted share. Then Apple gave us this guidance:

Looking ahead to the third fiscal quarter of 2009, we expect revenue in the range of about $7.7 billion to $7.9 billion and we expect diluted earnings per share in the range of about $.95 to $1.00.”

So look for $1.42. That's the real number.

3 comments:

Anonymous said...

so it is not going to be 1.41? Are you sure? How can you be so sure that it is 1.42?

Anonymous said...

well, seems like your number 1.42 was taken out of a$$. Real one was $1.35 per share. But still right direction :-)

Palmoni said...

My number stands.

AAPL divides iPhone revenue by 730, which assumes that each individual iPhone user ends his contract only after two years.

So if you believe that no-one switched over to the 3GS phone, then you can take those numbers at face value.

How is that possible? We know that when AAPL came out with their new OS for the iPhone, that 75% of users had already upgraded their phone with it in the first five days.

Now we also know that if your contract was not up, then you had to pay over $200 more to upgrade to the new phone.

That's AAPL's fudge factor.

I just reported the real number; AAPL reported the number that Wall Street wanted, and already sandbagged the sandbag estimate for next quarter.