Greetings folks!
I think I need to rename this blog to "after AAPL". But I won't do that because I rather like the name Apple's Gold, and it is Apple that has given me the seed money to spread out my investments. I still do not own AAPL and quite frankly I don't see myself ever getting back in. It's unfair that AAPL gets pummeled for making so much money and being so profitable, but life is just that way sometimes isn't it? Unfair. Not to worry, there are some good plays out there, and here's a few of my favorites, I'll name 3. 2 Canadian stocks and 1 USA. All high flyers..
ECA - today's close = $20.07
SWIR - today's close = $22.90
MANH - today's close = $39.21 (recently split 4/1)
Mutual funds (too many to list) maybe later
Also ETF's same thing too many.
But I'm excited about the 3 stocks listed above.. Do your own due diligence and let me know what you think.
On Apple: remember all that talk years ago about the law of large numbers? Many of us were in denial that the growth would abate, but that's exactly what happened isn't it? I'm one of those that were in that camp by the way...I was convinced that AAPL would be at 1200 / share by now, but not to be, not to be...it's been hanging around 530's with a PE of 13. And since the crash in 2012... (Forevermore known on this blog as "the great crash of 2012) it's been ugly. AAPL stock just teases people and really does nothing. I do not see AAPL eclipsing 600 this year, and if the iPhone 6 is not a knock it out of the park hit, I see more hovering in the 500's. The ONLY thing that will push this stock higher is a watch and a TV. It will take both, and they both must be runaway hits. Worse, if they launch any new products and they don't achieve Jobsian flair and hoopla which equates to off the charts sales... Then the only thing I see is Tank....
And look at Google! Flying at 1214 and a 31 PE. And look at Amazon with its 630 PE!!! WTH!
Ha ha, it's all good, I'm very excited about SWIR and the internet of everything. Also Encana, just watch this oil and gas play turn around.
More to come...
Thanks,
Dennis
Friday, March 7, 2014
Tuesday, March 12, 2013
iPhone is losing ground
Here's some of my latest thoughts on Apple:
I think the iPhone is losing ground.. Apple is not capturing marketshare like Samsung is.. I firmly believe that Apple has the better product, and in the long run the Apple eco system is going to pay off.... but it's taking too long. However - again, in my opinion, key mistakes have been made, and I believe the lack of a larger screen option is going to be painful. That impact will be felt over seas and in the US. Android growth, Microsoft's strategy, Amazon with their tablets, Even BB is threatening a real comeback. We all know that all it takes is taking your eye off the ball, and in the blink of an eye, your playing catch up. What do I mean by key mistakes made?
With the resources that Apple has, there is no excuse for:
1. Not having China Mobile locked up already - This is probably the biggest point. They are going to lose this opportunity to the companies that produce the good cheap phone. There's no reason why Apple can't do this, and lock 100+ million into their eco system ASAP. Get in the game. TC always talks about first mover advantage - Where is it? Whats the strategy? I'm not saying it's too late, but TC should be leading the party.
2. Young people LOVE the big screen.. Don't lose this demographic. I'm seeing more and more of these gargantuan phones in the wild.. and its not just young people. I have a friend close to 50, she just got a big Android phone and she's in love with it. This is costing Apple market share....
3. The maps disaster.. THIS WAS HUGE. No telling how many people changed their buying decision on that alone. The google maps availability came way too late. This software should have never been launched. Google maps blows Apple's solution out of the water.
That's just three examples - I know, I can hear the rebuttals already, It's not Apple's way, What about the margins?? Blah Blah Blah - I don't care. This is Apple! Devote the resources and quit losing marketshare. If Apple doesn't turn this around, they are going to turn out like the Apple of old. (Pre iPod) A small niche player in a really big pond - or should I say ocean.
To those that say, that was never Apple's strategy to dominate the world, I dispute that. Over and over you hear Apple management say "we want everybody to own our products, we want everybody to enjoy our great solutions. We want our products in everybody's hands.." Well, how come you're not doing it? This market - this opportunity, is just too large to miss out on..
Someone asked me earlier - "how will Apple's 5" phone (iPhone 6) be received outside the US?
My opinion - SENSATIONALLY - That is, if they ever make it.. No one knows what they're going to do... Maybe that should be huge mistake #4 on my list. The inability to communicate a strategy, that is timely, effective, and worth waiting for the next refresh.
I need to see some changes before I jump back into this stock again...
The Thursday presentation for the new Galaxy will be watched closely by the world. Samsung is trying to achieve Apple-like mania, and they might be able to pull it off.. Once a copycat always a copycat I guess.. I'll be posting on Thursday about it...
Dennis
I do not own AAPL
Saturday, March 9, 2013
Q2 2013 - Gross Margin YOY make for a tough compare
On my last post, I said that Apple would report an EPS of $12.00 for Q2 2013. It turns out I was being optimistic again.
Last years Gross Margin was a stellar 47.4%. I'm giving Apple an optimistic GM of 39.1%, which is a 17.5% decrease from last year. This fact alone will wreak havoc on the EPS. My calculations have Apple's EPS at $10.39, which is a 16% YOY decline....
Compounding the tough compare is the tax rate, which last year came in at 25.19% This year, I have Apple at an optimistic 25.71% which places additional downward pressure on the EPS. My preliminary numbers are as follows:
Revenue - 42,226,400,000 +8% YOY
EPS - $10.39 - 16% YOY
GM - 39.1% - 17.5% YOY
iPhone - 37,500,000 +7% YOY
iPad - 17,500,000 +48% YOY
iPod - 6,300,000 -18% YOY
Mac - 3,800,000 -10% YOY
Software / iTunes / other - $3,750,000,000 +154% YOY
With this YOY tough compare, it appears that Apple's growth has come to a screeching halt. Long term, this is not true, as I see the GM's staying in the 38% range, and the growth will show up again in the Q3 and Q4 quarters as the "tough compares" go away. (Albeit - a slow rate of growth)
My opinion is that Wall Street will brutalize the stock with these YOY results in Q2, and I see the share price dropping to 390. Hopefully, it stabilizes and starts the climb back up as seasonal product refreshments generate excitement. I still see the share price at 511 come March 2014, with a strong showing in the fall and Christmas quarters, continuing into early 2014.
The Samsung/Android juggernaut coupled with Microsoft's recent innovative resurgence is muting the iPhone growth, as well as iPad's, but not to the degree of the iPhone. I view Microsoft as a huge threat to Apple, (and Samsung) with their new and improved integrated operating system strategy amongst all platforms. The Nokia/MS partnership is looking like it will be successful. I personally have checked out the new windows 8 operating system, and I see it as a winner from MS. The fact that MS office can be integrated on all platforms easily just enforces their position.
More to come
I do not own AAPL shares.
Last years Gross Margin was a stellar 47.4%. I'm giving Apple an optimistic GM of 39.1%, which is a 17.5% decrease from last year. This fact alone will wreak havoc on the EPS. My calculations have Apple's EPS at $10.39, which is a 16% YOY decline....
Compounding the tough compare is the tax rate, which last year came in at 25.19% This year, I have Apple at an optimistic 25.71% which places additional downward pressure on the EPS. My preliminary numbers are as follows:
Revenue - 42,226,400,000 +8% YOY
EPS - $10.39 - 16% YOY
GM - 39.1% - 17.5% YOY
iPhone - 37,500,000 +7% YOY
iPad - 17,500,000 +48% YOY
iPod - 6,300,000 -18% YOY
Mac - 3,800,000 -10% YOY
Software / iTunes / other - $3,750,000,000 +154% YOY
With this YOY tough compare, it appears that Apple's growth has come to a screeching halt. Long term, this is not true, as I see the GM's staying in the 38% range, and the growth will show up again in the Q3 and Q4 quarters as the "tough compares" go away. (Albeit - a slow rate of growth)
My opinion is that Wall Street will brutalize the stock with these YOY results in Q2, and I see the share price dropping to 390. Hopefully, it stabilizes and starts the climb back up as seasonal product refreshments generate excitement. I still see the share price at 511 come March 2014, with a strong showing in the fall and Christmas quarters, continuing into early 2014.
The Samsung/Android juggernaut coupled with Microsoft's recent innovative resurgence is muting the iPhone growth, as well as iPad's, but not to the degree of the iPhone. I view Microsoft as a huge threat to Apple, (and Samsung) with their new and improved integrated operating system strategy amongst all platforms. The Nokia/MS partnership is looking like it will be successful. I personally have checked out the new windows 8 operating system, and I see it as a winner from MS. The fact that MS office can be integrated on all platforms easily just enforces their position.
More to come
I do not own AAPL shares.
Thursday, February 28, 2013
March 1, 2014 price target
Happy March 1st!
Readers of this blog will notice a pretty radical change in sentiment here. I have been giving AAPL much, much thought, and this is the most realistic post that I have made in a year, I believe. If AAPL does what I think its going to do, I will get back in at the sub 400 level.. I see a very rough 3 - months ahead, and a comeback beginning in the midst of the Christmas quarter.
On a personal note, I have backed off tremendously on my obsession with AAPL. I believe that I was too involved, and spent too much time, and basically needed to unplug and come down to earth.. This has been a good change. I want to post more on this blog, and would like to post some different ideas on stocks, and would love to hear some other ideas from you guys. I'll still post about AAPL, and participate in PED's smack-down, but hopefully with my feet planted firmly on the ground. Below is my post in the Braeburn Group.
I welcome any / all comments.
AAPL Price on March 1 2014 = 511.50
TTM earnings March 1 2014 = 46.50 (PE = 11)
YOY EPS growth = 5.39%
Revenue growth = 5%
TTM earnings March 1 2014 = 46.50 (PE = 11)
YOY EPS growth = 5.39%
Revenue growth = 5%
EPS by quarter - starting in Q2 = 12.00 / 10.00 / 9.50 / 15.00
This is going to be a difficult year for Apple. This company will have to move mountains to get a PE north of 12. The negative sentiment, FUD, coupled with the Android dominance, and emerging windows smartphone / tablet marketshare will flatline Apple’s growth. I believe the Amazon line up of Kindles will also see incremental growth. I do believe the growth will pick up again to as much as the 20 percentile range in the summer of 2014 when an Apple TV is launched, and growth in China takes hold. I also see investor sentiment changing around the same time. In the near term, I see AAPL dipping to the sub 400 level, especially after reporting fractionally negative growth in the Q2 earnings report. I see the stock coming back in the Christmas quarter because of the annual cycle of device upgrades. However, I do not see any large moves evidenced by my March 1, 14 price target. I do not currently own any AAPL shares.
Dennis Hildebrand
"We have met the enemy...and he is us."
-Pogo
Sunday, January 20, 2013
Q1 13 - The most important earnings report of all.
Happy New Year!
Some updates - Some times you just have to turn off the noise.
Other than PED's quarterly smack down, I haven't been posting, and have really almost completely stopped participating in my favorite forum The Braeburn Group. I have a couple of reasons for this:
Some updates - Some times you just have to turn off the noise.
Other than PED's quarterly smack down, I haven't been posting, and have really almost completely stopped participating in my favorite forum The Braeburn Group. I have a couple of reasons for this:
- All of the negative news releases are depressing. It's come to a point of ludicrousness. Yeah I know, that's not even a word, but I don't care because that's how it feels. How bad could it be? Apple has been growing earnings, and continuing to launch popular products that sell extremely well. It just seems as if the world is looking for Apple to fail, and so many are clamoring for FUD. I get tired of hearing it, and reading about it.
- I have started a new job, and my total concentration is needed in navigating a successful transition. The publishing company that I work for has gone to a 100% outsourcing model for our products, which are printed products, music CD's, and marketing materials. This also includes an intense focus on a digital publishing transformation. Very exciting, and requires my 100% focus. The recent drop in the share price, coupled with all the nonsense being published about Apple is incredibly distracting. Turn it off.
With that being said, I do have a set of numbers to share, and I'll do that here and now. First let's look at what happened last year, compared with what I predicted. As you will see, I underestimated by a large margin on EPS, but hit some of the metrics pretty accurately.
Dennis prediction Actual
My iPhone estimates missed by 3 million and change, which of course is why I missed the revenue by 3 billion. Also, my gross margin was off by a couple of percentage points which really affected the accuracy of my EPS number. My iPads / iPods / and MAC numbers were VERY close. In fact, I hit the iPod number right on the money -
iPhones - 34m 37.04m - missed by 3million - (killed me)
iPads - 15m 15.4m - missed by 400k
iPods - 15m 15m - dead nuts
Macs - 5.25m 5.2m - missed by 50k
Rev - 43.36b 46.33b - missed by 3b! (iPhones)
EPS - 11.59 13.87 - missed by $2.28 (iPhones and GM)
GM - 42.3% 44.7% - missed by 2.4%
My iPhone estimates missed by 3 million and change, which of course is why I missed the revenue by 3 billion. Also, my gross margin was off by a couple of percentage points which really affected the accuracy of my EPS number. My iPads / iPods / and MAC numbers were VERY close. In fact, I hit the iPod number right on the money -
Here are my numbers for Q1 13:
Revenues: $63,485,000,000Earnings: $16.33iPhone unit sales: 51miPod unit sales: 11.5mMac unit sales: 5.5miPad unit sales: 32mGM%: 39%
Compared against my peers, these numbers are extremely bullish. In fact, my iPad number is the highest of all participants in the quarterly smack down on Fortune. I'm sticking with it. I have said all along that I believe the iPad will overtake the iPhone in unit sales eventually. The only fly in my proverbial ointment, is if the mini cannibalized the regular sized pads.
Everything will be revealed Wednesday. I think that Apple will need an EPS number north of 15 to be viewed positively. Street consensus has actually called for a YOY decline in EPS. This could bode well for us being that the expectations are usually extraordinarily high.. We shall see.
Everything will be revealed Wednesday. I think that Apple will need an EPS number north of 15 to be viewed positively. Street consensus has actually called for a YOY decline in EPS. This could bode well for us being that the expectations are usually extraordinarily high.. We shall see.
Wednesday, October 10, 2012
My Estimates for FY Q4 2012
Apple reports earnings after the close on October 25th, a Thursday, which is unusual. The world is trying to guess, "Why Thursday? It's usually Tuesday.. I don't care.
The numbers:
Revenues: $39.82 b (41%YOY)Earnings: $10.67 (51%YOY)iPhone unit sales: 25.5m (49%YOY)iPod unit sales: 6.0m (-9%YOY)Mac unit sales: 5.25m (7%YOY)iPad unit sales: 21.5m (93%YOY)GM%: 42.25%
What I care about is that Apple keeps growing, and by growing, I mean growing their installed user base. I'm talking about getting people (like me) hooked on the cloud. Why do I say "like me?" Because I'm just a regular old Joe. I wouldn't consider myself a fanboy. I just like stuff that works and makes my life easier. I like being able to take a picture with my iPhone, then the next day, while using my iPad in a meeting, I can show a colleague the picture on my iPad, and I never even gave one thought to syncing. I'm taking meeting notes on my iPad, and later on I'm out in the field, and I can quickly reference my notes (any note) on my iPhone if needed.. again, no syncing - it's just there. Yes - I love it.
Not many people read this blog, but a few people do, especially around earnings time. I average about 1,000 hits a month, and that doubles around earnings time. Investor's are hungry for information. Whoever you are, thanks for stopping by, you make me feel relevant.
Investors want to know what Apple will report on earnings day, enough so that they even come over to my little corner of the internet. This is kinda like my little front yard that I keep manicured, just my little plot of land that I'm responsible for. One of the reasons that I do this is literally because I'm trying to prove that a layman like me can come closer to the numbers than wall street can. Also by participating, and actually publishing my predictions, it forces me to become something of an Apple expert. This summer, my friends and family were asking me questions like:
When will the next iPhone come out?
Is there going to be a smaller iPad?
How does iCloud work?
Asking moi?
Like I am an expert! I'm not. I'm merely a person that is very informed because my entire investment portfolio is 80% Apple.
No one ever asks me how many iPhones Apple sold.
No one ever asks me what the EPS will be
No one ever asks me how much revenue Apple will generate in Q4.
What's my point? Regular people just do not care about the financials until Apple hits a milestone like 500/share and it's all over the news.. Then everybody at work is talking about it. The common phrase I hear is - Apple's at 500 a share! I wish I owned the stock! It's too late now! I wonder how my 401k is doing? Believe me when I say that I am grinning ear to ear when I hear these conversations knowing that I originally got in at 44 share. Do I brag? Sometimes.. not much anymore - no one cares really. Am I bragging now? Hell yes! I hope you own Apple too. Yes the price has dropped 70 pts lately. But like my good friend Robert Leitao says: "It's earnings that drives the share price" Yes it's tough to take these 70 point drops when I'm 80% invested, but I have to remember that 1 year ago, October 10, 2011, sitting on 379/share, I was dreaming about 650 / share, and here we are at 640. 65 points down from the all time high, holding a 15 PE.. Amazing.
With the iPhone 5 launched,
The rumored iPad mini on the way (I believe this is true),
An earnings call in 2 weeks,
The Holiday quarter coming up,
China and the rest of the BRIC's yet to be conquered,
and Android market share to grab,
There is just no way that I'm getting out. Unless Europe does totally collapse or someone nukes their neighbor... Oh, and let's not forget the US' fiscal cliff. If I have to, it's 2 quick trades and I'm on the sidelines, and you know how fast that can be done.
Back to the numbers (now that I've finished my diatribe)
Last years Q4 was a huge disapointment to the world, yet it was 39% growth. My call is the same percentage growth, but this time the shock will be muted because the expectations are not as high.Revenues: $39.82 b (41%YOY)
Last year was 52% growth and again a huge shocker to the world - The sky was falling! Yet here we are 1 year later, 250 points or so higher. The world doesn't feel better, but I do.Earnings: $10.67 (51%YOY)
Last's years growth was 21%. I'm doubling up to 49% growth based on last years number being so low, and this year's sales positively affected by the launch of the "5" in September.iPhone unit sales: 25.5m (49%YOY)
Sticking with my slow decline due to cannibalization. The iPod's are now the greatest and most coveted gift for a child for the holidays.. We will get back to the 15 million range for Q1.iPod unit sales: 6.0m (-9%YOY)
Even with iPads cannibalizing Mac sales, we still see 7% growth. Mac grew 26% last year, but only 2% YOY last quarter, I'm bumping it up to 7% growth based on back to school sales, with the cannibalization factored in.Mac unit sales: 5.25m (7%YOY)
This amazing device is continuing the explosive growth. Last Q4 was 171% growth YOY. We will stay in the 100% range of growth through 2013 in my opinion.. Yes thats right, I'm calling this one right now. Next year, Q4 iPads will be 40 million sold.iPad unit sales: 21.5m (93%YOY)
Same as last quarter and a little higher than last year.. The margins were higher earlier in the Fiscal year, but with all of the re-tooling for the iPhone 5, and the alleged start up manufacturing of the mini, the margins will stay in the 42% range.GM%: 42.25%
If my numbers seem a little more conservative than usual, it's because they are. I have been too high on my last few quarters, and I'm trying to tone it down a little.. This really is not easy, but it's fun trying. Hopefully one of these days, I'll nail the darn thing.
Last but not least, I reiterate my $910 one year price target that I published on August 19th, 2012. (For September 1, 2013.
Thanks for checking out my tiny little corner of the internet.
Dennis Hildebrand - Still long AAPL
Sunday, September 9, 2012
Braeburn Group 1 year price target
I belong to a group of independent Apple analysts called the Braeburn Group. Every quarter we publish a new 12 month price target. This is an average of the analysts that participate. Here's the link. My personal 1 year target is still 910, which is documented on my last post.
Just for fun, let's review my prediction on May 29th 2012. I posted the following price targets on that date:
Sept 1 - $46.24 = $624.24 (13.02)
Dec 1 - $54.69 = $738.31 (15.50)
Mar 1 - $63.32 = $854.82 (22.50)
Jun 1 - $69.02 = $931.77 (18.00)
What was the price on May 29th? - $574.00 at the close. We closed on Sept 1 at $668.60. I missed by 42 bucks / share, even a mega bull like me was caught off guard with the huge run up in the last few months.
Weird - TTM earnings are at 42.55 - Missed that by $3.69 lower, but the share price is higher. I just didn't expect the PE expansion to be like this.. I hope this is a trend that continues..
Here's some more fun - On September 30th 2010, with Apple's share price at $283.75, I posted that Apple's share price would hit 400 / share by January 2012. Closing price on January 3, 2012 - $409 / share.. not bad for an amateur.
I will keep checking in to see how my May 29th targets fare, even though I adjust / update as the year progresses.
Dennis
Just for fun, let's review my prediction on May 29th 2012. I posted the following price targets on that date:
Sept 1 - $46.24 = $624.24 (13.02)
Dec 1 - $54.69 = $738.31 (15.50)
Mar 1 - $63.32 = $854.82 (22.50)
Jun 1 - $69.02 = $931.77 (18.00)
What was the price on May 29th? - $574.00 at the close. We closed on Sept 1 at $668.60. I missed by 42 bucks / share, even a mega bull like me was caught off guard with the huge run up in the last few months.
Weird - TTM earnings are at 42.55 - Missed that by $3.69 lower, but the share price is higher. I just didn't expect the PE expansion to be like this.. I hope this is a trend that continues..
Here's some more fun - On September 30th 2010, with Apple's share price at $283.75, I posted that Apple's share price would hit 400 / share by January 2012. Closing price on January 3, 2012 - $409 / share.. not bad for an amateur.
I will keep checking in to see how my May 29th targets fare, even though I adjust / update as the year progresses.
Dennis
Sunday, August 19, 2012
My September 1 2013 share price for Apple
Today TTM earnings are at 42.55
Apple will grow earnings 53% to $65.00 TTM earnings at Sept 1, 2013.
Current PE is at 15.23
I’m giving Apple a PE of 14 on Sept 1, 2013.
Current PE is at 15.23
I’m giving Apple a PE of 14 on Sept 1, 2013.
$65.00 x 14 = $910.00 - That is 40% share price appreciation to go with 54% projected earnings growth.
My share price projection for Sept 1 2013 = $910
This feels somewhat conservative, but it feels right. What’s amazing to me is the fact that Apple reported a disappointing Q3 quarter in most people’s eyes, but here we are 1 month after reporting and sitting on the all time high, and MAJOR MAJOR catalysts right around the corner. There have been media reports that Apple will sell 250 million iPhone 5’s, and with the iPad mini coming on board before Christmas…. well, let’s just say The immediate future is bright.
For Q4 - my rough numbers are:
iPhones = 23.5 million
iPads = 20 million
Macs = 5 million
iPods = 6.5 million
iTunes / software = 3.5 million
iPads = 20 million
Macs = 5 million
iPods = 6.5 million
iTunes / software = 3.5 million
Rev = 38.25 b
EPS = 10.56
EPS = 10.56
iPhones - This is based on 2 weeks of iPhone 5 sales to boost what will be viewed positively - based on woeful 4S sales and overall number greatly lifted on what I hope will be documented iPhone launch sales records reported.
My FY13 Q1 projections remain the same:
72 billion rev - 22.50 EPS (57 million iPhones / 33 million iPads)
FY13 Q2 - 18.00 EPS
FY13 Q3 - 14.00 EPS
FY13 Q3 - 14.00 EPS
I’m figuring sequential decline from Q2 - Q3, based on what happened this year, however that could change based on what occurs with iPad mini, iTV, iWallet etc etc. - My numbers above assume none of that.
Thanks for checking in and let me know what you think.
Dennis Hildebrand
Wednesday, July 25, 2012
A huge miss for Apple, my cronies, and me
Apple's numbers came in yesterday, and if you are reading this, I'm sure you know what they are - My reaction in bits and pieces over the last 27 hours:
My initial reaction is one of shock. I did not believe that reporting an E.P.S below $10 was possible for Q3 12.
The fallacy in my individual thinking is that I did not (again) factor in anywhere near enough “end of product cycle slowdown” for the iPhones. I have to re-evaluate my analysis, and put a much heavier weight on this when it happens again. And with the guidance of 34b and $7.65, I can absolutely expect a post October launch of the iPhone 5.
The upside to the guidance being that low, is that we (I) can now manage a more realistic set of expectations. This all points to a Q1 that will be incredible, and it presents an amazing buying opportunity for those of us that believe.
More perspective: It seems as if Apple is content in being the “tortoise” to Androids “hare” in this race for global market share. Long run, this will pay off for those of us that are patient, I believe. With the eco-system in place, and the best products available, they will grow their marketshare slowly. This might be a good strategy, it’s the quality of the products that will win this race. I will admit to feeling some frustration over Apple being slow to launch their biggest revenue product in their portfolio. Again the upside here is the build up of pent up demand, that Apple seems to always do.
On the surface, it appears that Samsung/Android has a leg up, but the “tortoise” approach could prove to be successful when looking long term…. more to come
Wednesday 5:20pm
It’s now been over 24 hrs since the earnings report, and given time to absorb the information, and I have deliberately not been reading blogs, articles, opinions, and reactions so that I can clear my mind of clutter and of others opinions.
I’m going over my models for Q4, Q1, Q2, and Q3, and have radically changed my views to the downside which doesn’t mean that I’ve turned into a bear, it’s more of coming down to earth, and realizing that Apple is going to move at their own pace, instead of everybody else’s pace, or even better, my expected pace. The bottom line is they are still growing. The other bottom line is Q1 WILL be a monster quarter.
I’m going over my models for Q4, Q1, Q2, and Q3, and have radically changed my views to the downside which doesn’t mean that I’ve turned into a bear, it’s more of coming down to earth, and realizing that Apple is going to move at their own pace, instead of everybody else’s pace, or even better, my expected pace. The bottom line is they are still growing. The other bottom line is Q1 WILL be a monster quarter.
Apple’s guidance was so low, that I’m moving my EPS down to $9.00 for Q4 - Yes - the 3rd sequential decline in a row, but 20% YOY increase. In Q1 I’m staying with 22.50 EPS, but I’m going to model the same percentage sequential declines in EPS in 2013, that we are experiencing now. I’m expecting a yearly EPS at the end of Q3 of $61 and a PE of 14 with a new price target of $854 / share on Sept 1 2013.
This is far lower than my previous model, and represents my radical shift in my mindset of what was once over exuberant, to now just plain bullish on the company and the stock.
Wednesday, June 27, 2012
Q3 2012 Estimates
iPhones - 32,000,000
Macs - 4,620,000
iPads - 21,000,000
iPods - 6,500,000
Total Revenue: 42,231,100,000
EPS: 12.82
Gross Margin: 46.0%
The above are my estimates for the June quarter for Apple... I submitted them to the Braeburn group yesterday evening. When the average is published, I'll post a link here. My Highlights:
Revenue 42.231 billion
This is only a 48% YOY increase in performance. Last year at this time, Apple posted revenue of 28.571 billion. The last 4 quarter YOY percentages are: 82% - 39% - 73% - 59%
That 82% was last year's Q3. If we were to see a performance of 82% revenue growth again this Q3, we would be at 52 billion in revenue.. 52 billion revenue in one quarter will happen - but not until Q1 13, but it won't be 52 billion - It will be 70 billion and that equates to 56% growth YOY. That's about how I see the YOY revenue growth for a while, settling in at the 50% range, which is nothing to sneeze at when you are talking about this size of number.
EPS - 12.82
65% YOY growth. Compared to prior quarters, this is actually conservative. I'll go back 8 quarters on this one starting with Q3 10. 75% - 68% - 75% - 92% - 122% - 52% - 116% - 92%. The only EPS percentage below 65% is the Q4 11 miss due to the delay of the iPhone 4s. I have no problem with 65% YOY growth, and I'm confident this will be achieved.
iPhones - 32 million; Revenue = 20.672 billion
32 million represents 57% YOY growth, and -10% sequentially. The growth in this category is moderate (historically speaking) due to potential buyers holding off for the much anticipated iPhone 5 with 4G LTE. In Q4, we will be lucky to see this number if the 5 doesn't launch until October. We can only hope for an early September launch to boost the Q4 iPhone numbers, while staving off the Android / Samsung onslaught.
Macs - 4.620 million; Revenue = 5.913 billion
17% growth YOY, and 5% sequentially. The upgrade of the macbook line will help this category, these growth rates are typical of the Mac line of computers, unlike the rest of the PC makers flailing
around in single digit growth, if not negative growth, due to the popularity of the iPad.
iPads - 21 million; Revenue = 11.025 billion
Apples first 20 million iPad unit quarter should happen right here, with a total units sold of 21 million. With an average ASP of 525 due to the high demand of the iPad 2, total revenue will be just over half of what the iPhone produces. Apple most likely won't break out these numbers, but I believe that Apple will sell 7 million of the lowest level iPad 2.
The iPods continue to decline at -14% YOY, but are still big sellers for children that are not yet old enough to have a phone. We are truly raising the "APP generation". 10 years from now, when the world's 8 - 10 year olds are 18 - 20, the App TV generation should be in full swing, with Apple TV fully integrated into people's lives as buying content ala carte becomes the norm.
Above is the rest of the revenue story, with Music / other actually eclipsing iPod revenue, which I believe is going to be an even bigger story in the years to come, due to iCloud, and total convergence when iTV finally arrives. I haven't got the numbers in front of me, but I plan my next post to be about the growth over the last 5 years in this category, complete with YOY percentages.
Fiscal year end:
Revenue = 170 billion
EPS = 52.49
I revised EPS downward from my price projection post, due to the iPhone 5 most likely NOT launching until October. Obviously if I hear otherwise, I will move back to 54.69.
I am long AAPL
Macs - 4,620,000
iPads - 21,000,000
iPods - 6,500,000
Total Revenue: 42,231,100,000
EPS: 12.82
Gross Margin: 46.0%
The above are my estimates for the June quarter for Apple... I submitted them to the Braeburn group yesterday evening. When the average is published, I'll post a link here. My Highlights:
Revenue 42.231 billion
This is only a 48% YOY increase in performance. Last year at this time, Apple posted revenue of 28.571 billion. The last 4 quarter YOY percentages are: 82% - 39% - 73% - 59%
That 82% was last year's Q3. If we were to see a performance of 82% revenue growth again this Q3, we would be at 52 billion in revenue.. 52 billion revenue in one quarter will happen - but not until Q1 13, but it won't be 52 billion - It will be 70 billion and that equates to 56% growth YOY. That's about how I see the YOY revenue growth for a while, settling in at the 50% range, which is nothing to sneeze at when you are talking about this size of number.
EPS - 12.82
65% YOY growth. Compared to prior quarters, this is actually conservative. I'll go back 8 quarters on this one starting with Q3 10. 75% - 68% - 75% - 92% - 122% - 52% - 116% - 92%. The only EPS percentage below 65% is the Q4 11 miss due to the delay of the iPhone 4s. I have no problem with 65% YOY growth, and I'm confident this will be achieved.
iPhones - 32 million; Revenue = 20.672 billion
32 million represents 57% YOY growth, and -10% sequentially. The growth in this category is moderate (historically speaking) due to potential buyers holding off for the much anticipated iPhone 5 with 4G LTE. In Q4, we will be lucky to see this number if the 5 doesn't launch until October. We can only hope for an early September launch to boost the Q4 iPhone numbers, while staving off the Android / Samsung onslaught.
Macs - 4.620 million; Revenue = 5.913 billion
17% growth YOY, and 5% sequentially. The upgrade of the macbook line will help this category, these growth rates are typical of the Mac line of computers, unlike the rest of the PC makers flailing
around in single digit growth, if not negative growth, due to the popularity of the iPad.
iPads - 21 million; Revenue = 11.025 billion
Apples first 20 million iPad unit quarter should happen right here, with a total units sold of 21 million. With an average ASP of 525 due to the high demand of the iPad 2, total revenue will be just over half of what the iPhone produces. Apple most likely won't break out these numbers, but I believe that Apple will sell 7 million of the lowest level iPad 2.
iPods - 6.5 million; Revenue = 1.020 billion
The iPods continue to decline at -14% YOY, but are still big sellers for children that are not yet old enough to have a phone. We are truly raising the "APP generation". 10 years from now, when the world's 8 - 10 year olds are 18 - 20, the App TV generation should be in full swing, with Apple TV fully integrated into people's lives as buying content ala carte becomes the norm.
Peripherals - Revenue = 600 million
Software - Revenue = 800 million
Music / Other - Revenue = 2.2 billion
Above is the rest of the revenue story, with Music / other actually eclipsing iPod revenue, which I believe is going to be an even bigger story in the years to come, due to iCloud, and total convergence when iTV finally arrives. I haven't got the numbers in front of me, but I plan my next post to be about the growth over the last 5 years in this category, complete with YOY percentages.
Fiscal year end:
Revenue = 170 billion
EPS = 52.49
I revised EPS downward from my price projection post, due to the iPhone 5 most likely NOT launching until October. Obviously if I hear otherwise, I will move back to 54.69.
I am long AAPL
Tuesday, May 29, 2012
1 year price target - June 1, 2013
The Braeburn group, which I am an active member of, is publishing a 1 year price target average.. This will be an average of the participants that want to participate in the PPS projection.. The following is my post within that group.
Here’s my projection… I’m basing my numbers on a 13.5 PE assumption. The following numbers are starting Sept 1, 2012.. The pattern that I am projecting for each quarter is for PE expansion before and after earnings, followed by compression at the 2/3 quarter mark - down to 13.5.
13.5 PE might be conservative, but recent history has shown this to be the case, especially with the heavy manipulation by the institutional investors.. the big boys if you will. The reason I claim manipulation is simple:
The stock ran like hell all the way up to 644 / share.. before earnings. Then it drops to 530.. All in a short span of time. 644 = a PE of 18… Then the stock falls all the way down to 530 for a PE of just over 12 bucks.. I don’t see the stock moving like that for any other reason than institutional investors getting involved in a big way. Mainly because, there is absolutely nothing wrong with Apple.. With my earnings projections, I see Apple at $931.77 on June 1, 2013
Here is the earnings breakdown, quarter by quarter, beginning on Sept 1, 2012, followed by the price with a multiple of 13.5, and finally in parenthesis my quarterly earnings target.
Sept 1 - $46.24 = $624.24 (13.02)
Dec 1 - $54.69 = $738.31 (15.50)
Mar 1 - $63.32 = $854.82 (22.50)
Jun 1 - $69.02 = $931.77 (18.00)
Dec 1 - $54.69 = $738.31 (15.50)
Mar 1 - $63.32 = $854.82 (22.50)
Jun 1 - $69.02 = $931.77 (18.00)
$530.12 is the "post earnings" low this quarter.. (12.9 PE) I’m saying that the same type PE compression will happen each quarter, of course it won’t happen exactly like that, but this is what I’m using as a guideline. As I write this on May 29th, we are sitting on $572.27 with a 13.94 PE ratio.. I’m using this formula for each quarter to come up with my final 1 year target of $931.77 on June 1 2013.
Additional highlights: I’m projecting 55 million iPhones, and 33 million iPads for Q1 13… Revenue comes in roughly at 71 b, when you add 12 million iPods and 6.5 million macs.
I’m counting on the usual catalysts that are discussed all over the web.
I’m counting on the usual catalysts that are discussed all over the web.
Mac refresh and continuing to grow at a 17% average for a full year
Continued iPad domination
An Amazing iPhone 5 rollout - (Oct 1)
China / Asia Pacific explosion.
No TV in 2013, but I believe it will happen by mid 2014..
An Amazing iPhone 5 rollout - (Oct 1)
China / Asia Pacific explosion.
No TV in 2013, but I believe it will happen by mid 2014..
I will post the Braeburn group average for PPS on June 1 2013, right here, just as soon as it's published. Come back around June 5th or so..
I will have my June quarter estimates up by Friday, June 29th.
I will post the Braeburn group June quarter consensus as well, when that is published.. Look for that in early July.
Thanks for reading,
Dennis Hildebrand
Thursday, March 15, 2012
Preliminary Q2 numbers
iPhones - 38,500,000
Macs - 4,750,000
iPads -13,750,000
iPods - 7,500,000
Total Revenue: 44,065,000,000
EPS: 13.11
Gross Margin: 44.4%
Apple will be reporting the numbers again around the 3rd week of April as usual. We at the Independent AAPL analysts are getting our spreadsheets ready. This is my second go round this quarter. I started with iPads at 12 million a month ago, but I just bumped that up to 13.750 based on the aggressive rollout, and the Tim Cook factor. I also bumped up my iPhones estimates by 1/2 mil.
Now that Tim Cook is unabated by Mr Jobs - I mean that respectfully - I believe that we are going to see even more aggressive growth. Mr Cook, in his own words, will continue to "make big bets" on the ramp up to product launches. It seems that even the mighty Mr Cook can't bet high enough for the mass hysteria to an Apple product launch.
In going through the numbers in Q2:
Macs - 4,750,000
iPads -13,750,000
iPods - 7,500,000
Total Revenue: 44,065,000,000
EPS: 13.11
Gross Margin: 44.4%
Apple will be reporting the numbers again around the 3rd week of April as usual. We at the Independent AAPL analysts are getting our spreadsheets ready. This is my second go round this quarter. I started with iPads at 12 million a month ago, but I just bumped that up to 13.750 based on the aggressive rollout, and the Tim Cook factor. I also bumped up my iPhones estimates by 1/2 mil.
Now that Tim Cook is unabated by Mr Jobs - I mean that respectfully - I believe that we are going to see even more aggressive growth. Mr Cook, in his own words, will continue to "make big bets" on the ramp up to product launches. It seems that even the mighty Mr Cook can't bet high enough for the mass hysteria to an Apple product launch.
In going through the numbers in Q2:
- At 38.5 million iPhones shipped the YOY growth comes in at 106% and sequentially up 4% - Last years growth percentages were 113% and 13%. The Q1 numbers this year, were such a massive blowout, that I'm taking the sequential percentage number down a skosh. Last year in this period, we sold 18.6 million iPhones. For FY 12 - I'm at 150 million iPhones shipped (+108%)
- MACs at 4.750 million is 26% YOY growth, and -9% sequentially. Last years total in this time frame was 3.760m. For FY 12 - I'm at 20.45 million MACs shipped (+21%)
- iPads at 13.750 mil - thats 193% YOY and -11% sequentially. For FY 12 - I'm at 62 million iPads shipped (+92%)
- iPods at 7.5 mil. Thats -17% YOY and -108% sequentially. For FY 12 - I'm at 34.5 million iPods shipped (-18%)
- Revenue at 44.065 billion is up 79% YOY and down 5% sequentially. For FY 12 - I'm at 182 b (+68%)
- EPS at 13.11 is a 105% increase YOY and down a mere 6% sequentially. For FY 12 I'm at $56 (+102%)
Be aware - The last time I made yearly predictions like this, in my commentary, my feeling was that I was being very aggressive.. well I got the MACs and iPads right on, but missed to the downside on everything else. Especially iPhones, revenue, and EPS. Its here, if you want to check it out.
I will update my estimates and post the final numbers before I ship them off to PED for the quarterly smack down.
Dennis Hildebrand
Monday, February 13, 2012
Some great information for Cancer patients
I'd like to take a brief time out from Apple talk to send those that are interested in some great information about cancer recovery or people that are engaged in any type of cancer battle. This is from David Haas, he is a fellow blogger that has contacted me, and asked if I would publish some of his great stuff. I checked it out, and this guy definitely has some good information..
Please check it out
Why exercise is important for cancer patients
You will find more links to his various blogs on this page
Thanks,
Dennis
Please check it out
Why exercise is important for cancer patients
You will find more links to his various blogs on this page
Thanks,
Dennis
Tuesday, January 24, 2012
Apple's Blowout Q1 - How I did
This is what I sent into Fortune.com (PED)
Dennis prediction Actual
My iPhone estimates missed by 3 million and change, which of course is why I missed the revenue by 3 billion. Also, my gross margin was off by a couple of percentage points which really affected the accuracy of my EPS number. My iPads / iPods / and MAC numbers were VERY close. In fact, I hit the iPod number right on the money - Last time that I happened I saw my name on CNBC..
This was really an amazing quarter - I really thought my iPhone number was going to be close.. It just goes to show how true it is that Apple is the true master of pent up demand. I like what Tim Cook says about Apple's iCloud being a strategy, as opposed to just posting a number.
For me - Apple's cloud has changed my life for the better. The auto synch and back up has convinced me that I need look nowhere else for my digital needs. I like things that make my life simple - not complicated.
These numbers are proof in the pudding that this strategy for the Apple eco-system is just going to grow and grow and grow. iCloud in China? with 300 million users.. my gosh.. imagine the sheer volume of IOS devices over there, and we are just in the beginning stages of this thing.
Congratulations to all Apple users and investors
Dennis
Dennis prediction Actual
iPhones - 34m 37.04m - missed by 3million - (killed me)
iPads - 15m 15.4m - missed by 400k
iPods - 15m 15m - dead nuts
Macs - 5.25m 5.2m - missed by 50k
Rev - 43.36b 46.33b - missed by 3b! (iPhones)
EPS - 11.59 13.87 - missed by $2.28 (iPhones and GM)
GM - 42.3% 44.7% - missed by 2.4%
My iPhone estimates missed by 3 million and change, which of course is why I missed the revenue by 3 billion. Also, my gross margin was off by a couple of percentage points which really affected the accuracy of my EPS number. My iPads / iPods / and MAC numbers were VERY close. In fact, I hit the iPod number right on the money - Last time that I happened I saw my name on CNBC..
This was really an amazing quarter - I really thought my iPhone number was going to be close.. It just goes to show how true it is that Apple is the true master of pent up demand. I like what Tim Cook says about Apple's iCloud being a strategy, as opposed to just posting a number.
For me - Apple's cloud has changed my life for the better. The auto synch and back up has convinced me that I need look nowhere else for my digital needs. I like things that make my life simple - not complicated.
These numbers are proof in the pudding that this strategy for the Apple eco-system is just going to grow and grow and grow. iCloud in China? with 300 million users.. my gosh.. imagine the sheer volume of IOS devices over there, and we are just in the beginning stages of this thing.
Congratulations to all Apple users and investors
Dennis
Wednesday, October 19, 2011
Wisdom
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."
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 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
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