I'll post about Apple's latest quarter in a day or 2, but I just stumbled on this nugget, which has nothing to do with Apple or investing.. Or does it?
The Dalai Lamai, when asked what surprised him most about humanity, answered:
"Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived."
Wednesday, October 19, 2011
Wednesday, October 12, 2011
4th quarter projections for Oct 18th
Hello Folks,
It's that time again.. Apple reports numbers on October 18th which is next Tuesday. It will be somewhat somber without the presence of Steve Jobs, but Timmy boy will be his usual non-chalant self while the numbers speak for themselves. There has been much concern in the media and the blog-o-sphere about the delay of the much rumored iPhone 5. As it turns out, there was no iPhone 5 - Apple launched the iPhone 4s and sold a million of them on launch day. Another record, another day in the life of Apple. Of course, this is not news.. I'm merely repeating what everybody else has already said..
So how does a blogger write anything new about Apple? It's practically impossible. I mainly enjoy reading these bloggers: Andy Zaky (Bullish Cross) / Horace Deidu (Asymco), and Robert over at Posts at Eventide. Andy now charges for his opinions (rightfully so) and Robert is a wealth of statistics, and objective information that he freely posts for the world to consume.. A repository of information as he calls it. Horace is a guy that assimilates vast quantities of data, then draws these incredibly creative charts, which are accompanied by his equally creative commentary. Horace (Asymco) is a little more broad, he talks about the mobile industry, but Apple is usually a big part of his subject matter. Also - over at the Apple Finance board, there are a whole slew of intelligent opinions bantied about. This board has long term members that are experienced traders whether it be options, day trading, or buy and hold.. I check into these places on most days. Of course, I have to mention Apple 2.0 and Phillip Elmer Dewitt, at Fortune - If you are looking for info on Apple - PED's blog is the place to be.
There is a guy that cruises most of these sites by the name of Falkirk that writes very creative and interesting opinions on Apple as a company.. he's really insightful - you will see him comenting in most of these destinations. All of these websites are a click away from this blog.
My opinion on Apple stock is buy as much as you can, and hold as long as you can..
The weird thing about Apple is this:
Everybody waits and anticipates Apple's next big move. There are arguments on both sides bullish and bearish.. People go back and forth for months, but Apple never reveals their hand until the day they say they are going to announce something - Then they do just that. They take one hour or so to make a presentation, then they shut down and let the world argue over what they just presented for 3 or 4 months.. Usually the quarterly earnings calls get the most hoopla.
Consistent through all of this is one big thing. Apple keeps exceeding expectations when REAL numbers are published. We can argue all day long about the recent announcement of the iPhone 4s being not good enough.. They still sell a million in 24 hours and break another record. They just keep doing it over and over again. I don't see that trend stopping anytime soon. I've been saying this since I first started this blog. We've still got all of 2012 for this type of growth.. it won't start tapering off until end of 2013 / beginning of 2014 - there's just too much momentum, and market share to grab. I'm not saying the growth will stop at the end of 2013, you just won't see the 80% YOY growth in revenue / 100% growth in EPS anymore.
Ok - here's my prediction for Q4 - I sent these numbers to PED on September 24th, also at that time submitted to the AAPL independent analysts group that I belong to.
YOY in parenthesis
Revenue - $36,419,000,000 (79%)
EPS ----- $9.94 (114%)
iPhones - 26,750,000 (90%)
iPads - - 14,800,000 (261%)
Macs - - 4,750,000 (22%)
iPods - - - 7,450,000 (-18%)
Gross margin - 42.6%
Int'l sales - 66%
Of the 47 or so analysts polled on Fortune, my revenue is third highest.. The rest of my numbers have a similar rank. The gross margins will be that high because they have NOT changed the basic form of the iPad or iPhone. They changed the guts of the iPhone, but they did not create a case re-design.
For the record - I came in 4th place overall last quarter, 12th place prior quarter, and 8th the quarter before that. Like I said, there's 47 or so analysts in the smackdown now.
Q1 preliminary numbers..
Revenue - 46 b
EPS - 11.30
iPhones - 30m +
iPads - - 20m
Macs - - - 5.5m (33% growth)
ipods -- 9m
GM - - - 42%
Int'l sales - 70%
Finally 2010 - 2011 YOY stats (with my Q4 numbers added in)
Revenue - 78%
EPS - - 102%
iPhones - 105%
iPads - - 389%
Macs - - 22%
iPods - -15%
GM 2010 = 40.00%
GM 2011 = 40.80%
Astounding!
Thats it - see you online on the 18th during the conference call on one of the many live blogs..
It's that time again.. Apple reports numbers on October 18th which is next Tuesday. It will be somewhat somber without the presence of Steve Jobs, but Timmy boy will be his usual non-chalant self while the numbers speak for themselves. There has been much concern in the media and the blog-o-sphere about the delay of the much rumored iPhone 5. As it turns out, there was no iPhone 5 - Apple launched the iPhone 4s and sold a million of them on launch day. Another record, another day in the life of Apple. Of course, this is not news.. I'm merely repeating what everybody else has already said..
So how does a blogger write anything new about Apple? It's practically impossible. I mainly enjoy reading these bloggers: Andy Zaky (Bullish Cross) / Horace Deidu (Asymco), and Robert over at Posts at Eventide. Andy now charges for his opinions (rightfully so) and Robert is a wealth of statistics, and objective information that he freely posts for the world to consume.. A repository of information as he calls it. Horace is a guy that assimilates vast quantities of data, then draws these incredibly creative charts, which are accompanied by his equally creative commentary. Horace (Asymco) is a little more broad, he talks about the mobile industry, but Apple is usually a big part of his subject matter. Also - over at the Apple Finance board, there are a whole slew of intelligent opinions bantied about. This board has long term members that are experienced traders whether it be options, day trading, or buy and hold.. I check into these places on most days. Of course, I have to mention Apple 2.0 and Phillip Elmer Dewitt, at Fortune - If you are looking for info on Apple - PED's blog is the place to be.
There is a guy that cruises most of these sites by the name of Falkirk that writes very creative and interesting opinions on Apple as a company.. he's really insightful - you will see him comenting in most of these destinations. All of these websites are a click away from this blog.
My opinion on Apple stock is buy as much as you can, and hold as long as you can..
The weird thing about Apple is this:
Everybody waits and anticipates Apple's next big move. There are arguments on both sides bullish and bearish.. People go back and forth for months, but Apple never reveals their hand until the day they say they are going to announce something - Then they do just that. They take one hour or so to make a presentation, then they shut down and let the world argue over what they just presented for 3 or 4 months.. Usually the quarterly earnings calls get the most hoopla.
Consistent through all of this is one big thing. Apple keeps exceeding expectations when REAL numbers are published. We can argue all day long about the recent announcement of the iPhone 4s being not good enough.. They still sell a million in 24 hours and break another record. They just keep doing it over and over again. I don't see that trend stopping anytime soon. I've been saying this since I first started this blog. We've still got all of 2012 for this type of growth.. it won't start tapering off until end of 2013 / beginning of 2014 - there's just too much momentum, and market share to grab. I'm not saying the growth will stop at the end of 2013, you just won't see the 80% YOY growth in revenue / 100% growth in EPS anymore.
Ok - here's my prediction for Q4 - I sent these numbers to PED on September 24th, also at that time submitted to the AAPL independent analysts group that I belong to.
YOY in parenthesis
Revenue - $36,419,000,000 (79%)
EPS ----- $9.94 (114%)
iPhones - 26,750,000 (90%)
iPads - - 14,800,000 (261%)
Macs - - 4,750,000 (22%)
iPods - - - 7,450,000 (-18%)
Gross margin - 42.6%
Int'l sales - 66%
Of the 47 or so analysts polled on Fortune, my revenue is third highest.. The rest of my numbers have a similar rank. The gross margins will be that high because they have NOT changed the basic form of the iPad or iPhone. They changed the guts of the iPhone, but they did not create a case re-design.
For the record - I came in 4th place overall last quarter, 12th place prior quarter, and 8th the quarter before that. Like I said, there's 47 or so analysts in the smackdown now.
Q1 preliminary numbers..
Revenue - 46 b
EPS - 11.30
iPhones - 30m +
iPads - - 20m
Macs - - - 5.5m (33% growth)
ipods -- 9m
GM - - - 42%
Int'l sales - 70%
Finally 2010 - 2011 YOY stats (with my Q4 numbers added in)
Revenue - 78%
EPS - - 102%
iPhones - 105%
iPads - - 389%
Macs - - 22%
iPods - -15%
GM 2010 = 40.00%
GM 2011 = 40.80%
Astounding!
Thats it - see you online on the 18th during the conference call on one of the many live blogs..
Sunday, June 5, 2011
Preliminary numbers for the June quarter
Greetings,
We are about a month and a half away from the July news conference that Apple reports their Fiscal Q3 earnings. Here are a few statistics that might be interesting and my predictions.
Revenue - The last 5 Q3 year over year percentage increases and consecutive quarter increases are as follows: (YOY in blue)
2006 - 24% - 0%
2007 - 27% - 5%
2008 - 36% - 0%
2009 - 29% - 7%
2010 - 61% - 14%
2011 - 77% - 11% - projected..
27.830 billion is the number - driven by international sales of the iPhone and the full ramp up to fulfill "the mother of all backlogs" on the iPad.
EPS will be at 6.95 which is a 98% YOY increase
iPhones - 18.900 million - 125% YOY increase
iPads - - - -9.810 million - 200% YOY increase
Macs - - - - 4.337 million - 25% YOY increase
iPods - - - - 9.000 million - 4% YOY decrease
GM - 40.7%
International sales - 65%
I know that the macro economic view right now is quite bearish with the US job growth numbers in the tank, coupled with the woeful real estate market. You also have the Japan disaster and concerns about the Euro, Greece, and the rest of that quagmire. I do not believe that any of these factors restrict Apple's ability to grow their sales. They continue to build stores all over the US and the world. They are expanding every day, and will continue to expand until they reach world dominance. It's the international sales that are fueling the massive growth right now, and this will continue at this pace until they have reached saturation in China. What's crazy is that Apple is no where near China saturation. They're working on it, but they have a ways to go. What will it look like when China has half as many stores that the US has? USA has roughly 236 Apple stores, and there are another 87 spread out around the rest of the world with only 5 stores in China. Can you imagine 118 stores in China? We've truly got a couple more years of this type of growth.
Speaking of international sales - here is the history since 2006 in quarters from Fiscal Q1 to fiscal Q4:
all numbers are percentages
2006 - 40 / 43 / 39 / 40
2007 - 42 / 43 / 40 / 40
2008 - 45 / 44 / 42 / 41
2009 - 46 / 46 / 44 / 46
2010 - 58 / 58 / 52 / 57
2011 - 62 / 58 / 65....
Just look at the pattern - In all of 2010, international sales said good bye to the 40% range, and in Q1 of 2011, broke through 60% for the first time ever! At this rate, we'll break through 70% in 2012 by Q2 or Q3... because of the China dynamic.
Here's another thought -
I invested in Apple back in 2004 because I wanted to bet on who would win the battle of media convergence. Of course, there will be more than one winner, but I wanted to pick the one company that had the vision to converge television and internet with movies and everything else, and find a way to deliver it seamlessly to us consumers. I picked Apple because of the way that they entered the music business with the iTunes store, and of course the ipod. It looked to me at that time, that Apple had a long term vision, and I thought that they had the biggest head start by designing world class software with the usual excellent hardware designs. In addition to that, they already had ALL those people used to buying media through iTunes. It just looked like they were the ones to do it.
Now enter the iPhone in 2007. Apple decides to give you the ability to make phone calls and access your media all in one device. Add the app store with 300,000 choices of tools and games to use, and I'm starting to see this convergence thing unfold before my eyes..
The iPad is next in 2010 - Facetime and TV with movies, and everything else - all on a 10" screen..
OK - while this is happening, the majority of people are still hooked to cable and satellite. But guess what? People use their DVR's and watch shows at their own convenience, in the time that is available to them. My wife and I do that.. We DVR the shows we like and watch them later for all of the conveniences that we all enjoy. You can plan your life the way you want to - Exercise and play whenever you want.. your shows are waiting for you.
The problem with all of this is - how do you manage all of this? It's too expensive and It's all scattered on different devices, and I don't know about the rest of you, but my hard drive fills up fast.
Tomorrow - Enter the iCloud - Another giant leap towards full convergence.
Imagine this.... 3 years from now:
You come home from work after a a hard day.. You throw on your running / walking shoes, and run/walk around town for 45 minutes or so.. That's done, now you want to sit down with your family, eat and watch your favorite show.
Right next to your chair is one of your iPads. You check out your iCloud service and see that you have a couple of your favorite shows that have been automatically downloaded. (Of course, you already knew this - you were expecting it, because YOU set it up)
You tell iCloud that you want to watch this show on iTV - Yes, that's right - your iTV. It looks just like your iPad, except it's 40" and is hanging on the wall like any flat screen TV. So you put your iPad down, and turn on your iTV to watch your show. Junior doesn't like to watch Justified, so he goes in the other room, and watches what he wants on his iPad, or maybe he wants to do some gaming.
This is the future of our world, and Apple is winning big.
Dennis Hildebrand
We are about a month and a half away from the July news conference that Apple reports their Fiscal Q3 earnings. Here are a few statistics that might be interesting and my predictions.
Revenue - The last 5 Q3 year over year percentage increases and consecutive quarter increases are as follows: (YOY in blue)
2006 - 24% - 0%
2007 - 27% - 5%
2008 - 36% - 0%
2009 - 29% - 7%
2010 - 61% - 14%
2011 - 77% - 11% - projected..
27.830 billion is the number - driven by international sales of the iPhone and the full ramp up to fulfill "the mother of all backlogs" on the iPad.
EPS will be at 6.95 which is a 98% YOY increase
iPhones - 18.900 million - 125% YOY increase
iPads - - - -9.810 million - 200% YOY increase
Macs - - - - 4.337 million - 25% YOY increase
iPods - - - - 9.000 million - 4% YOY decrease
GM - 40.7%
International sales - 65%
I know that the macro economic view right now is quite bearish with the US job growth numbers in the tank, coupled with the woeful real estate market. You also have the Japan disaster and concerns about the Euro, Greece, and the rest of that quagmire. I do not believe that any of these factors restrict Apple's ability to grow their sales. They continue to build stores all over the US and the world. They are expanding every day, and will continue to expand until they reach world dominance. It's the international sales that are fueling the massive growth right now, and this will continue at this pace until they have reached saturation in China. What's crazy is that Apple is no where near China saturation. They're working on it, but they have a ways to go. What will it look like when China has half as many stores that the US has? USA has roughly 236 Apple stores, and there are another 87 spread out around the rest of the world with only 5 stores in China. Can you imagine 118 stores in China? We've truly got a couple more years of this type of growth.
Speaking of international sales - here is the history since 2006 in quarters from Fiscal Q1 to fiscal Q4:
all numbers are percentages
2006 - 40 / 43 / 39 / 40
2007 - 42 / 43 / 40 / 40
2008 - 45 / 44 / 42 / 41
2009 - 46 / 46 / 44 / 46
2010 - 58 / 58 / 52 / 57
2011 - 62 / 58 / 65....
Just look at the pattern - In all of 2010, international sales said good bye to the 40% range, and in Q1 of 2011, broke through 60% for the first time ever! At this rate, we'll break through 70% in 2012 by Q2 or Q3... because of the China dynamic.
Here's another thought -
I invested in Apple back in 2004 because I wanted to bet on who would win the battle of media convergence. Of course, there will be more than one winner, but I wanted to pick the one company that had the vision to converge television and internet with movies and everything else, and find a way to deliver it seamlessly to us consumers. I picked Apple because of the way that they entered the music business with the iTunes store, and of course the ipod. It looked to me at that time, that Apple had a long term vision, and I thought that they had the biggest head start by designing world class software with the usual excellent hardware designs. In addition to that, they already had ALL those people used to buying media through iTunes. It just looked like they were the ones to do it.
Now enter the iPhone in 2007. Apple decides to give you the ability to make phone calls and access your media all in one device. Add the app store with 300,000 choices of tools and games to use, and I'm starting to see this convergence thing unfold before my eyes..
The iPad is next in 2010 - Facetime and TV with movies, and everything else - all on a 10" screen..
OK - while this is happening, the majority of people are still hooked to cable and satellite. But guess what? People use their DVR's and watch shows at their own convenience, in the time that is available to them. My wife and I do that.. We DVR the shows we like and watch them later for all of the conveniences that we all enjoy. You can plan your life the way you want to - Exercise and play whenever you want.. your shows are waiting for you.
The problem with all of this is - how do you manage all of this? It's too expensive and It's all scattered on different devices, and I don't know about the rest of you, but my hard drive fills up fast.
Tomorrow - Enter the iCloud - Another giant leap towards full convergence.
Imagine this.... 3 years from now:
You come home from work after a a hard day.. You throw on your running / walking shoes, and run/walk around town for 45 minutes or so.. That's done, now you want to sit down with your family, eat and watch your favorite show.
Right next to your chair is one of your iPads. You check out your iCloud service and see that you have a couple of your favorite shows that have been automatically downloaded. (Of course, you already knew this - you were expecting it, because YOU set it up)
You tell iCloud that you want to watch this show on iTV - Yes, that's right - your iTV. It looks just like your iPad, except it's 40" and is hanging on the wall like any flat screen TV. So you put your iPad down, and turn on your iTV to watch your show. Junior doesn't like to watch Justified, so he goes in the other room, and watches what he wants on his iPad, or maybe he wants to do some gaming.
This is the future of our world, and Apple is winning big.
Dennis Hildebrand
Sunday, April 24, 2011
Scoreboard time
We made it through another smackdown event (unscathed) and it's high time that I recap this event.
Outta the gate, I guess the first thing to mention is the quarter itself. The only disappointment that can be seen in the numbers is the iPad units sold. I projected just short of 7 million units sold, as did many of my blogger and AFB compadres. Is there safety in numbers? Well no not really, but I believe that we all are a little bit miffed about Apple only selling 4.69 million units. Almost all of us had the revenue well over 25 billion, and the shortfall in iPads is the reason a lot of us missed.
Still - At the end of the day... us amateurs ruled, and put the pros to shame - Much thanks to PED for publishing the results in his national publication.
On revenue and EPS, I came in 12th (of 48)
All categories - I finished 20th (of 48)
My 12th place finish in the main 2 metrics of revenue and EPS, put me high on the Deagol overall rank, I'm proud to say - Top place if I'm reading correctly. You can read about that here, along with his excellent analysis and breakdown of the quarter and the smackdown. Be sure to check out his cool scatter chart that provides an excellent visual to the overall results. I'm closest to the bullseye! Does that make me first place?
The best news of the post earnings call was the fact that AAPL climbed to 350 and change on Thursday.. (from as low as 326 earlier in the week). My opinion, is we will blow through the all time high by the end of this week, and continue to climb as new products release..
Ok - let's see how I did:
Revenue
Dennis - 25.505b
Actual - 24.670b
I overshot by less than a billion! (In AAPL parlance, 1 billion is a small number) Last quarter I missed by over 1 billion, so that's measurable improvement. B
EPS
Dennis - 6.21
Actual - 6.40
Undershot by 19 cents.. Last quarter I overshot by .18 cents... didn't improve but still a B
iPhones
Dennis - 17.36m
Actual - 18.65m
I undershot by 1.29m.. Last quarter I overshot by 2.11m... Measurable improvement B-
iPods
Dennis - 9.98m
Actual - 9.09m
Overshot by 890 thousand.. Last quarter I undershot by 550 thousand.. My performance declined in this category, but not by much .. B-
Macs
Dennis - 3.87 m
Actual - 3.76 m
Overshot by 110,000 - Last quarter, I overshot by 340,000 - More measurable improvement and I continue to excel in this category.. A
iPads
Dennis - 6.95
Actual - 4.69
Overshot by 2.26 million.. Yikes... no safety in numbers - Last quarter I came within 80,000! (overshot) I could make a lot of excuses here but I won't. A miss is a miss.. F+
How's that for a positive spin eh? An F+....
Gross margin
Dennis - 40.2
Actual - 41.4
Undershot by 120 basis points - Last quarter I hit it right on the money! No CNBC for me this time... C
I give myself a B as an overall grade for Q2 FY11 - (even with the ipad F+)
Like I said above.. after the day is done, and Tim Cook and gang report what they did.... The bottom line is - it was a BLOW OUT quarter.. I don't care how you try to spin it - 24 and a half billion is an incredible number.. So is $6.40.. I'm running out of superlatives to describe this companies performance.
I will admit that I engaged in a little market timing and sold all of my shares before they slid all the way down.. then got back in. I now have several more shares than I had before. That makes me happy. I'm all in now and will be unless something happens... The stop loss tool is a wonderful thing.
My price targets remain the same.. (1 revision - May 1st low is 350 instead of 335..)
It's going to be a great summer!
Thanks for checking in..
Dennis Hildebrand
Outta the gate, I guess the first thing to mention is the quarter itself. The only disappointment that can be seen in the numbers is the iPad units sold. I projected just short of 7 million units sold, as did many of my blogger and AFB compadres. Is there safety in numbers? Well no not really, but I believe that we all are a little bit miffed about Apple only selling 4.69 million units. Almost all of us had the revenue well over 25 billion, and the shortfall in iPads is the reason a lot of us missed.
Still - At the end of the day... us amateurs ruled, and put the pros to shame - Much thanks to PED for publishing the results in his national publication.
On revenue and EPS, I came in 12th (of 48)
All categories - I finished 20th (of 48)
My 12th place finish in the main 2 metrics of revenue and EPS, put me high on the Deagol overall rank, I'm proud to say - Top place if I'm reading correctly. You can read about that here, along with his excellent analysis and breakdown of the quarter and the smackdown. Be sure to check out his cool scatter chart that provides an excellent visual to the overall results. I'm closest to the bullseye! Does that make me first place?
The best news of the post earnings call was the fact that AAPL climbed to 350 and change on Thursday.. (from as low as 326 earlier in the week). My opinion, is we will blow through the all time high by the end of this week, and continue to climb as new products release..
Ok - let's see how I did:
Revenue
Dennis - 25.505b
Actual - 24.670b
I overshot by less than a billion! (In AAPL parlance, 1 billion is a small number) Last quarter I missed by over 1 billion, so that's measurable improvement. B
EPS
Dennis - 6.21
Actual - 6.40
Undershot by 19 cents.. Last quarter I overshot by .18 cents... didn't improve but still a B
iPhones
Dennis - 17.36m
Actual - 18.65m
I undershot by 1.29m.. Last quarter I overshot by 2.11m... Measurable improvement B-
iPods
Dennis - 9.98m
Actual - 9.09m
Overshot by 890 thousand.. Last quarter I undershot by 550 thousand.. My performance declined in this category, but not by much .. B-
Macs
Dennis - 3.87 m
Actual - 3.76 m
Overshot by 110,000 - Last quarter, I overshot by 340,000 - More measurable improvement and I continue to excel in this category.. A
iPads
Dennis - 6.95
Actual - 4.69
Overshot by 2.26 million.. Yikes... no safety in numbers - Last quarter I came within 80,000! (overshot) I could make a lot of excuses here but I won't. A miss is a miss.. F+
How's that for a positive spin eh? An F+....
Gross margin
Dennis - 40.2
Actual - 41.4
Undershot by 120 basis points - Last quarter I hit it right on the money! No CNBC for me this time... C
I give myself a B as an overall grade for Q2 FY11 - (even with the ipad F+)
Like I said above.. after the day is done, and Tim Cook and gang report what they did.... The bottom line is - it was a BLOW OUT quarter.. I don't care how you try to spin it - 24 and a half billion is an incredible number.. So is $6.40.. I'm running out of superlatives to describe this companies performance.
I will admit that I engaged in a little market timing and sold all of my shares before they slid all the way down.. then got back in. I now have several more shares than I had before. That makes me happy. I'm all in now and will be unless something happens... The stop loss tool is a wonderful thing.
My price targets remain the same.. (1 revision - May 1st low is 350 instead of 335..)
Date Low High Target
May 1, 2011 350 400 380
Aug 1, 2011 370 430 415
Nov 1, 2011 415 480 460
Feb 1, 2012 460 540 520
It's going to be a great summer!
Thanks for checking in..
Dennis Hildebrand
Monday, March 28, 2011
It's earnings time again....
It's earnings time again, so that means it's time to project what I believe Apple accomplished last quarter. As most of you know, there are some of us amateur analysts (bloggers) that are focused on predicting the key metrics that drive Apple's growth.. Also, Phillip Elmer Dewitt at Fortune.com publishes these results, pitting us against the pros in what he has dubbed - "The earnings smackdown."
This has turned into quite an event every 3 months - So much so, that some of us got National TV exposure on CNBC. That blew me away. Last quarter I hit the gross margin on the button, and because of that, my name was thrown into the neon lights.. This is funny - and actually quite fun. One of the amateurs that receives much praise and publicity is Daniel Tello over at Deagol's Apple Model. Mr Tello has come up with a ranked list that we call the Deagol rankings. I currently rank 25th out of 40 on this list. BUT - I came in at the 8th spot last quarter.. While this is exciting being involved with these guys, I'm a little disapointed in my overall rank, and I'm absoutely motivated to improve my position.
So with no further ado... Here's my numbers... with some explanations..
Revenue - $25,505b 89% increase
EPS - - - - - $6.21 86% increase
iPhones - - 17.360m 98% increase
iPads - - - 6.950m NA
Macs - - - 3.704m 26% increase
iPods - - - 9.980m 9% decrease
GM - - - - - 40.2%
This has been an extremely difficult quarter to predict. So many varibles to weigh in on..
I have weighed all of these variables and scoured the internet for facts and figures, and I feel pretty good about these numbers.. Some might say that an 89% and 86% increase in revenue and EPS respectively is too aggresive.. I think not.
Some interesting facts:
iPad sales and increased iPhone sales adds an additional 10 billion in revenue to last years Q2 total.
Now I'd like to review a few predictions that I made back in September 2010. (5 months back) Apple's share price was at $282. Today it closed at $350. Here's what I said:
Apple will open up the iPhone to other carriers in the first 6 months of 2011.
This has turned into quite an event every 3 months - So much so, that some of us got National TV exposure on CNBC. That blew me away. Last quarter I hit the gross margin on the button, and because of that, my name was thrown into the neon lights.. This is funny - and actually quite fun. One of the amateurs that receives much praise and publicity is Daniel Tello over at Deagol's Apple Model. Mr Tello has come up with a ranked list that we call the Deagol rankings. I currently rank 25th out of 40 on this list. BUT - I came in at the 8th spot last quarter.. While this is exciting being involved with these guys, I'm a little disapointed in my overall rank, and I'm absoutely motivated to improve my position.
So with no further ado... Here's my numbers... with some explanations..
Revenue - $25,505b 89% increase
EPS - - - - - $6.21 86% increase
iPhones - - 17.360m 98% increase
iPads - - - 6.950m NA
Macs - - - 3.704m 26% increase
iPods - - - 9.980m 9% decrease
GM - - - - - 40.2%
This has been an extremely difficult quarter to predict. So many varibles to weigh in on..
- The Verizon iPhone launch
- The iPad 2 launch
- 2 day international launch for iPad 2
- Crazy demand for both products
- Discounted prices on iPad 1 and iPhone 3G
- Supply contstraints on both products (some believe this is a myth)
- The disaster in Japan
I have weighed all of these variables and scoured the internet for facts and figures, and I feel pretty good about these numbers.. Some might say that an 89% and 86% increase in revenue and EPS respectively is too aggresive.. I think not.
Some interesting facts:
iPad sales and increased iPhone sales adds an additional 10 billion in revenue to last years Q2 total.
- There was no iPad last Q2 - It did not even exist. Everybody was waiting for it, but it did not launch until April.. The iPad added 4.5 billion in revenue this quarter alone. That's roughly 36% of the total 13.5 billion that reported last year at this time. WOW - incredible.
- iPhone sales have doubled - This adds another 5.5 billion to that 13.5 billion reported last year.
Now I'd like to review a few predictions that I made back in September 2010. (5 months back) Apple's share price was at $282. Today it closed at $350. Here's what I said:
Apple will open up the iPhone to other carriers in the first 6 months of 2011.
- I was right about this one, but - I said that T-Mobile would be first.. Of course I included Verizon, but I did make that statement about T-Mobile. Now it looks like T-Mobile will be brought into the mix with the ATT deal... I also said that the inclusion of other carriers would be timed with the launch of iPhone 5. Apple surprised me by bringing Verizon on board in February.. (earlier than I thought)
Apple will sell 33 million iPads in FY11.
- With the 6.9 million I'm saying they have sold, added to the 7.3 million last quarter, we are well on our way to eclipsing that 33 million estimation. My estimation looks to be a little short. The iPad is the biggest hit that Apple has had yet. I am increasing my estimation for FY 11. Apple will sell 9.8 million in Q3 and 16.7 million in Q4 to bring the total to 40 million. Too bold? I think not. Here's a fact for you. The iPhone - in it's first 2 YOY quarters - increased sales by 166% and 516%. This was Q3 and Q4 of FY 08. These are the same 2 sequential quarters for the iPads first 2 YOY sales. I'm saying the iPad will increase sales by 200% and 309% in Q3 and Q4 11 respectively.
- I was woefully short on this estimation - it looks like we will hit 80 million iPhones in this current fiscal year - I have Q3 at 20 million, and Q4 at 27 million iPhones sold..
Apple will sell 17 million MACs in FY11
- Right on target, I believe - Q3 will be at 4.3 million, and Q4 at 4.8 million. We are sitting on 8 million after this quarter.. add em up.
90 Billion revenue in FY11
- 90 billion easily.. in fact we'll do 110 billion in FY 11
EPS for FY2011 - $22.50
- We'll do $27
- January 12 price will be closer to $500 according to the Apple Finance board index.
I made those prognostications for a reason; I wanted to see how close I could get by publishing my best futures bet if you will.. Amazing really - I thought I was making bold predictions at that time.. Now it seems as if those numbers were incredibly simple to stick on the wall.. It didn't feel that way 5 months ago.
Revenue and EPS for the next 2 quarters:
Q3 - $28.6 b / $6.90
Q4 - $35.3 b / $8.12
No underestimation this time..... China is real!
Thanks for stopping by,
Dennis
Monday, January 31, 2011
My one year price targets for AAPL
Hello Folks,
A lot is happening in the world of Apple, and the technology sector as a whole. The iPad has now been on sale for 10 months. It's truly amazing how fast things move - not only at Apple, but in watching all the companies scrambling to compete with Apple - as they launch new products, then follow up with wave after wave of new innovations and upgrades to their products.
2010 was incredibly exciting. The iPad, and the iPhone 4 dominated the gadget industry. As my new friend at the Apple Finance Board, and keeper of the blog, Posts at Eventide Robert Paul Leitao states: The iPad accounted for over 17% of revenue, and over 46% of revenue growth in Q1.
Those are incredible numbers for a product that has been selling for such a short period of time. Barring a national disaster, or world wide crises - this stock has much room to climb.
Below are my share price targets that I have submitted to the Apple Finance Board for the AFB price target index which will be published by February 15th. Given AFB's record in pounding the pro's quarter after quarter, this will be an index that will be watched... and heeded.
My numbers are a little more conservative then some of the early submissions that I've seen. I have based my prices on 60% EPS growth, while maintaining a trailing PE of roughly 18 and change over the course of 1 year.
Date Low High Target
May 1, 2011 335 400 380
Aug 1, 2011 370 430 415
Nov 1, 2011 415 480 460
Feb 1, 2012 460 540 520
Just to add a little more insight - I have AAPL recording an EPS of $25.43 for FY 2011 vs and EPS of $15.15 for FY 2010. Those are astounding numbers, and I'm certain that Apple will hit my EPS target. AAPL's trailing PE is 18.93 today - Jan 31, 2011.
I would love to see a PE of 24 at least, which I believe that Apple deserves... the question is whether or not the rest of the world will buy shares in this unbelievable dynamo of a corporation.
Just think about the sheer logistics that it takes to launch a product, and sell just short of 15 million of them worldwide. Supply chain, distribution, and quality. The fact that Apple pulls this off and populations worldwide are clamoring for their products is phenomenal. (Jobs' favorite word)
Come back to my site Wednesday for my Super bowl betting predictions..
CLICK HERE for my Super Bowl forecast
Thanks,
Dennis Hildebrand
A lot is happening in the world of Apple, and the technology sector as a whole. The iPad has now been on sale for 10 months. It's truly amazing how fast things move - not only at Apple, but in watching all the companies scrambling to compete with Apple - as they launch new products, then follow up with wave after wave of new innovations and upgrades to their products.
2010 was incredibly exciting. The iPad, and the iPhone 4 dominated the gadget industry. As my new friend at the Apple Finance Board, and keeper of the blog, Posts at Eventide Robert Paul Leitao states: The iPad accounted for over 17% of revenue, and over 46% of revenue growth in Q1.
Those are incredible numbers for a product that has been selling for such a short period of time. Barring a national disaster, or world wide crises - this stock has much room to climb.
Below are my share price targets that I have submitted to the Apple Finance Board for the AFB price target index which will be published by February 15th. Given AFB's record in pounding the pro's quarter after quarter, this will be an index that will be watched... and heeded.
My numbers are a little more conservative then some of the early submissions that I've seen. I have based my prices on 60% EPS growth, while maintaining a trailing PE of roughly 18 and change over the course of 1 year.
Date Low High Target
May 1, 2011 335 400 380
Aug 1, 2011 370 430 415
Nov 1, 2011 415 480 460
Feb 1, 2012 460 540 520
Just to add a little more insight - I have AAPL recording an EPS of $25.43 for FY 2011 vs and EPS of $15.15 for FY 2010. Those are astounding numbers, and I'm certain that Apple will hit my EPS target. AAPL's trailing PE is 18.93 today - Jan 31, 2011.
I would love to see a PE of 24 at least, which I believe that Apple deserves... the question is whether or not the rest of the world will buy shares in this unbelievable dynamo of a corporation.
Just think about the sheer logistics that it takes to launch a product, and sell just short of 15 million of them worldwide. Supply chain, distribution, and quality. The fact that Apple pulls this off and populations worldwide are clamoring for their products is phenomenal. (Jobs' favorite word)
Come back to my site Wednesday for my Super bowl betting predictions..
CLICK HERE for my Super Bowl forecast
Thanks,
Dennis Hildebrand
Wednesday, January 19, 2011
Q1 2011 Actuals - My grades and beyond
An incredibly wild day today for an Apple shareholder.. The news about Steve Jobs released yesterday, coupled with an amazing quarterly report caused a wild swing as most people expected. The actuals vs. my projections..
Actual Revenue - - 26.74 b
Dennis' Revenue - 27.80 b (5%over) Grade C
Actual EPS - - - - - - 6.43
Dennis' EPS - - - - - 6.61 (2.7% over) Grade B
Actual iPhone - - - 16.24m
Dennis' iPhone - - 18.35m (13% over) Grade F ouch!
Actual iPod - - - - - 19.45m
Dennis' iPod - - - - 18.90m (2.8% under) Grade B
Actual iPad - - - - - 7.33m
Dennis' iPad - - - - 7.25m (1.4% under) Grade A
Actual Macs - - - - 4.12m
Dennis' Macs - - - 4.46m (8.4% over) Grade D
Actual GM - - - - - - 38.5
Dennis' GM - - - - - 38.5 (dead nuts) Grade A
Overall - My gross miscalculation of the iPhone units sold, killed me .. I miscalculated - mainly due to supply line constraints, I really thought it was wide open, but Oppenheimer's comments in the conference call has convinced me otherwise. - C
"iPhone sales were somewhat constrained by supply, Oppenheimer said, even though total unit sales of 16.2 million beat analysts’ estimates."
I guess the real question is - does "somewhat constrained" equate to 2.11 million units? Well, I say yes.
Enough about me - The big news here is - the Steve Jobs news vs. blowout quarter, and which one carries the most weight.
Here's my take:
This Steve Jobs announcement is carefully planned and contrived. This is a long term plan to slowly convince the world that Steve Jobs has a real succession plan in place.
Think about it. This company is doing everything right. EVERYTHING. How could they (Jobs / The board / Senior execs) leave succession planning out? Especially knowing the global appreciation, admiration, and mystical status of their CEO. How could they NOT do this right?
Tim Cook / Oppenheimer / and the the senior VP's have got a firm hand on this company, and to me, this is thoroughly obvious. Let's face it - Job's can't do this by himself, and he certainly cannot run this company while he's sick. Steve Jobs had a liver transplant. A liver transplant! Why are people surprised when he needs to take time off? When is the last time any of us have had an organ transplant? How many people do you personally know that have been through something like this? Oh - let's not forget, 5 years earlier the man had pancreatic cancer. My God - What Steve Job's has been able to accomplish under these circumstances is remarkable. I do not take anything away from Mr Jobs when I say that he has had to delegate a tremendous amount in the last 6 years. If any company is ready for succession, it's definitely Apple. Enough said.
Now that I've finished my rant, I'll get back to the future..
Long Term - I'm convinced that leadership is solid, even when Jobs retires, or backs away - Long term, this company is in great shape and I still believe that Apple will hit 590 by mid 2012. This is especially true if they do something with their cash. They must do something eventually. I'm holding my shares, I'm going to enjoy the ride all the way to 800. There is just too much opportunity out there, and they made it very obvious in the conference call that they are going to aggressively pursue Asia (China) and go after PC market share. Firing on all cylinders is an understatement. I believe that by the time we get to 800, the numbers will be so gargantuan, that, eventually - say by the end of 2013 - it's going to be difficult to put together the percentage gains that we saw today. At the end of this post, I'll include an explanation of the law of large numbers that puts this in perspective.
Short term - It's a roller coaster / rough and rocky ride. All of you options traders out there, that are adept at this should have fun timing the high and low tides of this stock. If you have a talent for that, maybe you can teach me.. I need to learn. It's just hard to say, because of they way people panic. I think it's going to take 2 - 3 weeks for the stock to settle down, and the fear of the Steve Job's news to subside, then the stock will climb based on strong valuation, and new product leaks / news / speculation.
Law of Large Numbers
As an example, assume that company X has a market capitalization of $400 billion and company Y has a market capitalization of $5 billion. In order for company X to grow by 50%, it must increase its market capitalization by $200 billion, while company Y would only have to increase its market capitalization by $2.5 billion. The law of large numbers suggests that it is much more likely that company Y will be able to expand by 50% than company X.
The law of large numbers makes logical sense. If a large company continues to grow at 30-50% every year, it would eventually become bigger than the economy itself! Obviously, this can't happen and eventually growth has to slow down. As a result, investing in companies with very high market capitalization can dampen the potential for stock appreciation.
Resource - Investopedia
I've heard people in the blog-o-sphere say phooey to this concept, but it makes sense to me, I mean, the law has to apply eventually. Even with that being said, Who's to say when the law kicks in? WalMart is at 420 billion / year and they are growing at about a 2% clip. I believe that Apple can grow at the current rate for another 1.5 - 3 years, as crazy as it sounds, We're looking at 105 billion + in FY 11. That puts FY 12 at 168 billion and FY 13 at (gulp) 256 billion.. This is 60% for each year. Apple's revenue in FY 09 was shy of 43B.. Those 60% projections seem so crazy, I'm afraid to hit the publish button. That SHOULD put the stock in the 1000 dollar range.. theoretically.
2011 is going to be a big year for the market.
This is what could happen if the scenario I've described plays out:
aapl = 425 by August 2011 / 590 by July 2012 / 800 by December 2013..
I've been holding since 2004 - I always said I would hang on to this for 10 years then cash and spread it out for a few more years.. So far so good.
Phenomenal iPad and iPhone sales worldwide. International sales grew to 62% I can't see anything stopping this machine, especially when China really takes hold. Verizon iPhone is small potatoes as compared to the China dynamic.
For those that are interested - I finally finished my cancer story.
Thanks for stopping by,
Dennis Hildebrand
Actual Revenue - - 26.74 b
Dennis' Revenue - 27.80 b (5%over) Grade C
Actual EPS - - - - - - 6.43
Dennis' EPS - - - - - 6.61 (2.7% over) Grade B
Actual iPhone - - - 16.24m
Dennis' iPhone - - 18.35m (13% over) Grade F ouch!
Actual iPod - - - - - 19.45m
Dennis' iPod - - - - 18.90m (2.8% under) Grade B
Actual iPad - - - - - 7.33m
Dennis' iPad - - - - 7.25m (1.4% under) Grade A
Actual Macs - - - - 4.12m
Dennis' Macs - - - 4.46m (8.4% over) Grade D
Actual GM - - - - - - 38.5
Dennis' GM - - - - - 38.5 (dead nuts) Grade A
Overall - My gross miscalculation of the iPhone units sold, killed me .. I miscalculated - mainly due to supply line constraints, I really thought it was wide open, but Oppenheimer's comments in the conference call has convinced me otherwise. - C
"iPhone sales were somewhat constrained by supply, Oppenheimer said, even though total unit sales of 16.2 million beat analysts’ estimates."
I guess the real question is - does "somewhat constrained" equate to 2.11 million units? Well, I say yes.
Enough about me - The big news here is - the Steve Jobs news vs. blowout quarter, and which one carries the most weight.
Here's my take:
This Steve Jobs announcement is carefully planned and contrived. This is a long term plan to slowly convince the world that Steve Jobs has a real succession plan in place.
Think about it. This company is doing everything right. EVERYTHING. How could they (Jobs / The board / Senior execs) leave succession planning out? Especially knowing the global appreciation, admiration, and mystical status of their CEO. How could they NOT do this right?
Tim Cook / Oppenheimer / and the the senior VP's have got a firm hand on this company, and to me, this is thoroughly obvious. Let's face it - Job's can't do this by himself, and he certainly cannot run this company while he's sick. Steve Jobs had a liver transplant. A liver transplant! Why are people surprised when he needs to take time off? When is the last time any of us have had an organ transplant? How many people do you personally know that have been through something like this? Oh - let's not forget, 5 years earlier the man had pancreatic cancer. My God - What Steve Job's has been able to accomplish under these circumstances is remarkable. I do not take anything away from Mr Jobs when I say that he has had to delegate a tremendous amount in the last 6 years. If any company is ready for succession, it's definitely Apple. Enough said.
Now that I've finished my rant, I'll get back to the future..
Long Term - I'm convinced that leadership is solid, even when Jobs retires, or backs away - Long term, this company is in great shape and I still believe that Apple will hit 590 by mid 2012. This is especially true if they do something with their cash. They must do something eventually. I'm holding my shares, I'm going to enjoy the ride all the way to 800. There is just too much opportunity out there, and they made it very obvious in the conference call that they are going to aggressively pursue Asia (China) and go after PC market share. Firing on all cylinders is an understatement. I believe that by the time we get to 800, the numbers will be so gargantuan, that, eventually - say by the end of 2013 - it's going to be difficult to put together the percentage gains that we saw today. At the end of this post, I'll include an explanation of the law of large numbers that puts this in perspective.
Short term - It's a roller coaster / rough and rocky ride. All of you options traders out there, that are adept at this should have fun timing the high and low tides of this stock. If you have a talent for that, maybe you can teach me.. I need to learn. It's just hard to say, because of they way people panic. I think it's going to take 2 - 3 weeks for the stock to settle down, and the fear of the Steve Job's news to subside, then the stock will climb based on strong valuation, and new product leaks / news / speculation.
Law of Large Numbers
As an example, assume that company X has a market capitalization of $400 billion and company Y has a market capitalization of $5 billion. In order for company X to grow by 50%, it must increase its market capitalization by $200 billion, while company Y would only have to increase its market capitalization by $2.5 billion. The law of large numbers suggests that it is much more likely that company Y will be able to expand by 50% than company X.
The law of large numbers makes logical sense. If a large company continues to grow at 30-50% every year, it would eventually become bigger than the economy itself! Obviously, this can't happen and eventually growth has to slow down. As a result, investing in companies with very high market capitalization can dampen the potential for stock appreciation.
Resource - Investopedia
I've heard people in the blog-o-sphere say phooey to this concept, but it makes sense to me, I mean, the law has to apply eventually. Even with that being said, Who's to say when the law kicks in? WalMart is at 420 billion / year and they are growing at about a 2% clip. I believe that Apple can grow at the current rate for another 1.5 - 3 years, as crazy as it sounds, We're looking at 105 billion + in FY 11. That puts FY 12 at 168 billion and FY 13 at (gulp) 256 billion.. This is 60% for each year. Apple's revenue in FY 09 was shy of 43B.. Those 60% projections seem so crazy, I'm afraid to hit the publish button. That SHOULD put the stock in the 1000 dollar range.. theoretically.
2011 is going to be a big year for the market.
This is what could happen if the scenario I've described plays out:
aapl = 425 by August 2011 / 590 by July 2012 / 800 by December 2013..
I've been holding since 2004 - I always said I would hang on to this for 10 years then cash and spread it out for a few more years.. So far so good.
Phenomenal iPad and iPhone sales worldwide. International sales grew to 62% I can't see anything stopping this machine, especially when China really takes hold. Verizon iPhone is small potatoes as compared to the China dynamic.
For those that are interested - I finally finished my cancer story.
Thanks for stopping by,
Dennis Hildebrand
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