Apple's Earnings Today# Stock
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APPLE 2015 Q4 EARNINGS REPORT ESTIMATES
Numbers that you should pay attention to:
EPS: $1.88
Revenue: $51 billion
Guidance: $77 billion
Gross margin: 39.7%
Iphone: 48 million
Ipad: 10.5 million
Mac: 5.5 million
China Revenue:
“Other products” category revenue (including Apple watch):
Share buybacks:
MY TAKE:
- EPS will beat. (shares count reduction helps here)
- Revenue will beat. (Note: apple’s own guidance is $49-51 billion, it
almost always beat even the high end of its own target)
-Guidance for Q1 2016: this is the tough one… same quarter last year, Apple
delivered $74.6 billion vs. its own projection of $66.5 billion. So it’s
going to be a tough tough comp. this time around. Any guidance materially
below the street expectation of $77 billion will spell disaster for AAPL the
stock.
- Gross Margin not that relevant here. S cycle typically brings higher
margin, and street has no concern over margin compression as opposed to the
2012-2013 time period.
- iphone unit # very likely disappoint due to the simple fact that the
quarter ends on September 26, meaning only two days of new iphone sales
could be counted towards the quarter vs. 9 days of new iphone sale same
quarter last year.
- Ipad unit number is not that important anymore… a beat will be nice but
nothing to get excited over.
- Mac unit # should show strength, holding up relatively well vs. overall PC
market
- China revenue. Iphone 6 launch in China was delayed last year, so yoy comp
. (vs. $5.8 billion) is not that meaningful, but expect Apple to taunt the
100+% yoy growth anyway. qoq comp. is more meaningful --- previous quarter’
s China revenue was $13.2 billion.
- “Other products” category is all about the Apple watch… because apple
does not break down the numbers, only qoq comp can give you a hint how apple
watch has been doing. Previous quarter’s number is $2.64 billion. Apple
watch ASP is around $500. From those numbers you will be able to back out a
guesstimate of how many
MORE watches apple sold in Q4 compared to Q3.
- Share buybacks: Apple did $19 billion in Q3. It will be interesting to see
Apple management’s reaction to the substantial share price drop that has
occurred in Q4.
If you can only pay attention to 1 number --- Guidance for Q1 2016 is the
one. The Guidance will dictate AAPL price movement in the next 3-6 months.
If you care about AAPL share price immediately following the earnings
announcement --- iphone unit sold is all that matters
If you want to know whether the stock price drop in Q4 of recent is
warranted --- pay attention to China revenue and Apple watch sales numbers.
Perceived weak watch sales and later China concerns were the culprits behind
the sell-off.
Listen to the earnings conference call, and then make up your OWN mind on
AAPL. As for myself, I will stay long until my conviction in Apple is shaken
.
Numbers that you should pay attention to:
EPS: $1.88
Revenue: $51 billion
Guidance: $77 billion
Gross margin: 39.7%
Iphone: 48 million
Ipad: 10.5 million
Mac: 5.5 million
China Revenue:
“Other products” category revenue (including Apple watch):
Share buybacks:
MY TAKE:
- EPS will beat. (shares count reduction helps here)
- Revenue will beat. (Note: apple’s own guidance is $49-51 billion, it
almost always beat even the high end of its own target)
-Guidance for Q1 2016: this is the tough one… same quarter last year, Apple
delivered $74.6 billion vs. its own projection of $66.5 billion. So it’s
going to be a tough tough comp. this time around. Any guidance materially
below the street expectation of $77 billion will spell disaster for AAPL the
stock.
- Gross Margin not that relevant here. S cycle typically brings higher
margin, and street has no concern over margin compression as opposed to the
2012-2013 time period.
- iphone unit # very likely disappoint due to the simple fact that the
quarter ends on September 26, meaning only two days of new iphone sales
could be counted towards the quarter vs. 9 days of new iphone sale same
quarter last year.
- Ipad unit number is not that important anymore… a beat will be nice but
nothing to get excited over.
- Mac unit # should show strength, holding up relatively well vs. overall PC
market
- China revenue. Iphone 6 launch in China was delayed last year, so yoy comp
. (vs. $5.8 billion) is not that meaningful, but expect Apple to taunt the
100+% yoy growth anyway. qoq comp. is more meaningful --- previous quarter’
s China revenue was $13.2 billion.
- “Other products” category is all about the Apple watch… because apple
does not break down the numbers, only qoq comp can give you a hint how apple
watch has been doing. Previous quarter’s number is $2.64 billion. Apple
watch ASP is around $500. From those numbers you will be able to back out a
guesstimate of how many
MORE watches apple sold in Q4 compared to Q3.
- Share buybacks: Apple did $19 billion in Q3. It will be interesting to see
Apple management’s reaction to the substantial share price drop that has
occurred in Q4.
If you can only pay attention to 1 number --- Guidance for Q1 2016 is the
one. The Guidance will dictate AAPL price movement in the next 3-6 months.
If you care about AAPL share price immediately following the earnings
announcement --- iphone unit sold is all that matters
If you want to know whether the stock price drop in Q4 of recent is
warranted --- pay attention to China revenue and Apple watch sales numbers.
Perceived weak watch sales and later China concerns were the culprits behind
the sell-off.
Listen to the earnings conference call, and then make up your OWN mind on
AAPL. As for myself, I will stay long until my conviction in Apple is shaken
.
