Q2 2012 Predictions Based On Apple Guidance History And Actual Growth

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 |  About: Apple Inc. (AAPL)
by: Siddharth Dalal

Among the wildly varied numbers (the last link is a good analysis) from professionals and independents for Apple (NASDAQ:AAPL), I see all kinds of analysis ranging from sales numbers, margin projections, technical analysis all presented with pretty charts.

That got me thinking of one more number which is not often charted. Apple's guidance vs. actuals. I have provided a table of that for the last few quarters below. (Rev in billions, EPS in $).

Quarter Guidance Rev Guidance EPS Actual Rev Actual EPS Revenue Beat % EPS Beat %
Q2 2012 32.5 8.5 38.4* 12.1* 18.2* 42.7*
Q1 2012 37 9.3 46.3 13.9 25.13514 49.46237
Q4 2011 25 5.5 28.3 7 13.2 27.27273
Q3 2011 23 5 28.6 7.8 24.34783 56
Q2 2011 22 4.9 24.7 6.4 12.27273 30.61224
Q1 2011 23 4.8 26.7 6.4 16.08696 33.33333
Q4 2010 18 3.44 20.3 4.6 12.77778 33.72093
Q3 2010 13.2 2.3 15.7 3.51 18.93939 52.6087
Q2 2010 11 2.1 13.5 3.33 22.72727 58.57143
Click to enlarge

*The numbers in italics represent estimates based on the average % that Apple beat estimates by in the last 8 quarters.

Here is a chart showing the percentage beat for revenue and EPS: Apple Guidance vs RealityClick to enlarge

If we follow the EPS trendline down to 35%, it would be an estimate of $11.50 for Q2 2012. In my opinion the Q3 2011 beat was so big because of general underestimation of iPad2 sales. In a similar vein Apple might have been underestimating the launch of the new iPad as far as guidance goes. This time Apple had so much supply that everyone who wanted an iPad got an iPad. There was enough stock to go around and no shortages.

Even if Apple were to beat by the lowest of all quarters (13% revenue, 27% EPS beats), revenue and EPS would be about $36.4B and $10.80, respectively, with the EPS expectations being a lot higher than average analyst estimates of $9.90 and revenue being about on par.

Let's say we go the other way and take the top numbers (24% revenue and 58% EPS) - we get $41.6B in revenues and $13.4 EPS.

Let's look at it another way, using actual revenue and EPS numbers:(click to enlarge)Click to enlarge

From that chart trendline we have revenues of $44.3B and EPS of $12.50. So going by either historical trend, we can expect another "blowout" quarter handily beating average analyst estimates.

As for the current correction, take that as a golden opportunity to buy Apple stock.

Disclosure: I am long AAPL.