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Adam Levine-Weinberg

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  • Apple Earnings And Guidance - Why I Think It Will Beat Analysts' Estimates [View article]
    This is an interesting analysis: definitely a great exercise to go through everything product by product. There are a few things that seem not quite right, though. I don't know where you are getting your iPhone ASP, but it seems way too low. If you divide Q4FY12 iPhone and related revenue by unit shipments, it works out to $637. (Even stripping out the related revenue, I can't get to the <$580 number you have in the ASP chart.)

    I wouldn't expect the ASP number to move very much. While there's been a gradual migration towards the lower-priced models, this is offset by the fact that Apple shipped a lot more new generation iPhones this year than last year. (I.e. opening weekend was 9 million this year vs. 5 million last year.) Since ASPs always jump when a new model is introduced, that should offset most or all of the secular decline.

    Lastly, I can't imagine that Mac revenue actually declined sequentially last quarter. Last year, Mac revenue jumped more than 30% sequentially due to back to school. Alternatively, if you look at the IDC data, Mac unit sales may have dropped 11% year over year in the U.S. If that's representative of the world, it would imply revenue close to $6 billion: more than $1 billion over your estimate.

    All in all, I think iPhone unit sales will be a little below your guess, with iPhone ASPs well above your guess and Mac revenue also higher. I think there's a good chance Apple will beat its guidance for revenue AND gross margin. But we'll see soon enough.
    Oct 18 09:43 AM | Likes Like |Link to Comment
  • Apple: Stop The Dividend [View article]
    I think the dividend is a useful hedge against the possibility, however remote, that the stock is overvalued. Tim Cook essentially acknowledged your point when he chose to devote essentially all of the increase in Apple's capital return plans to share buybacks.

    Also, unless you are in the highest income bracket, I believe qualified dividends are still taxed at 15%. If you are in the 15% bracket or below, dividends are tax free.
    Jul 2 04:41 PM | 6 Likes Like |Link to Comment
  • How Apple Let Its Shareholders Down [View article]
    This is an interesting take, but all you are really saying is that Apple was clearly undervalued five years ago and is clearly undervalued today. You could just as easily write that the market is letting Apple down, or something like that.

    The fact that the share price has gone up over the period you analyze is driving your conclusion. I'm pretty sure that all of the "value" you have created is from buying back shares in the 2007-2010 period at an average price under $200. Obviously, a good share buyback is designed to buy shares when they are undervalued. But it's a little unfair to blame Apple's management for not buying back shares without also blaming everybody else who did not buy Apple shares before they went up.

    If you assumed instead that Apple had returned cash through a dividend over your horizon, I think you would have a much more equivocal conclusion. And if you had just analyzed the last year, you would have found that Apple was wise to not buy back shares when they were trading at a significant premium to today's price.
    May 6 04:07 PM | 2 Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    Yes, it would require board approval. But the Board is not and should not be micro-managing the day to day business, so the fact that they spend a meeting discussing a share repurchase could not reasonably be considered a distraction.
    Jan 24 03:26 PM | Likes Like |Link to Comment
  • Apple Likely To Crush Analyst Estimates With 53 Million Q1 iPhone Shipments [View article]
    Very weak beat this afternoon, with EPS roughly flat year over year (single digit growth after adjusting for the extra week last year). I suppose the bears will be out in full force...

    I was surprised that GM came in under 39%, particularly given the weak Mac sales.
    Jan 23 04:44 PM | Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    I don't think that expanding into low-margin manufacturing will do much for shareholders other than ignite a new wave of panic.
    Jan 23 12:09 PM | Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    If Apple was using its cash for anything, I would be inclined to agree with you. But Apple has not derived any more advantage from having $130 billion of cash now vs. $30 billion three years ago.
    Jan 23 09:09 AM | 1 Like Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    Why would buying back shares require "energy"? It requires Cook and Oppenheimer to sign their names on a couple of pieces of paper...
    Jan 22 10:49 PM | 1 Like Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    See my point above about FCF. I think you are putting the cart before the horse.
    Jan 22 07:40 PM | Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    Basically, you're saying that you think Samsung (which tries to do everything) is a more successful company than Apple (which tries to do a few things that it's good at and outsource the rest). I don't buy it.
    Jan 22 07:33 PM | 1 Like Like |Link to Comment
  • Apple iPhone 5: What Are The Implications From AT&T And Verizon? [View article]
    I think your numbers from last year are wrong. I believe AT&T sold around 7.5 million iPhones in Q411, not 4.7 million as you stated. So the U.S. growth rate isn't quite as high as your estimate, though it's still quite good. Anyway, my guess is that Apple sold around 53 million iPhones last quarter; that will still be enough to comfortably beat estimates.
    Jan 22 06:02 PM | 2 Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    Yes. But it knows that regardless of whether it returns cash to shareholders. Otherwise, it would be making multi-billion dollar acquisitions left and right, ramping up CapEx from $8 billion to $20 or $30 billion a year, quadrupling R&D to $15 billion a year, etc.

    Buybacks add shareholder value if the stock price subsequently rises. If you think that Apple's current stock price is being driven by "technicals" rather than fundamentals, then a buyback would increase AAPL's value.
    Jan 22 05:40 PM | Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    The biggest reason, in my opinion, is that most of the cash is overseas. I think that it would make sense to either float a bond offering or pay the repatriation taxes in order to use that cash, but Apple seems to be "allergic" to both options.

    To some extent, the problem may be that corporate boards have a limited amount of time and this oversupply of cash has gone from a minor issue to a major issue in two years. The current cash return plan goes through FY15, but AAPL is still on pace to end that period with around $250 billion on its balance sheet. I would be surprised if the company lets it get to that point.
    Jan 22 05:37 PM | Likes Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    I agree; it's clearly a "trading" perspective, because beyond a time frame of a few months, technicals mean nothing.
    Jan 22 04:24 PM | 1 Like Like |Link to Comment
  • Apple Should Approve A Huge Repurchase Plan [View article]
    If I thought that returning cash would distract Apple, I would agree with you. However, it should take about one day of a junior corporate treasury person's time to put together a presentation for the board about returning cash, and perhaps an hour for Tim Cook to review it. I don't see how that could be a distraction...
    Jan 22 04:23 PM | 1 Like Like |Link to Comment
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