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Stefan Sidahmed's  Instablog

Stefan Sidahmed is a Naval Officer. He has served on 3 submarines and been involved in submarine operations, maintenance, construction and budgetting. Stefan has over 10 years of investing experience, mostly in stocks, but has dabbled in options and ETFs in commodities, currencies and... More
  • Apple’s December Earnings to Grow 37% 0 comments
    Nov 9, 2009 10:53 PM | about stocks: AAPL
    The Street consensus for Apple’s Q1 2010 earnings is $2.04 on $11.9B in revenues. Depending on how many shares outstanding are assumed (due to dilution, I am using 920M), this equates to a profit margin of 15.7%, which sounds reasonable and is consistent with recent performance. My estimate of GAAP earnings is $2.44 on revenues of $12.5B, or an eye popping 17.9% profit margin. This even blows away the Q4 2009 profit margin of 16.9%, which had an unusually low 26% tax rate. I used a 30% tax rate, so how can the profit margin be so high? It is a combination of the operating leverage provided by the high margin iPhone and a very linear operating expense curve.
     
    Below are my GAAP and non-GAAP revenue and earnings estimates for Q1 2010 with year over year GAAP EPS growing 37% while non-GAAP EPS grows at nearly a 44% rate. 
     

     
    I will update these results as prior to earnings release as the estimates solidify for numbers of units shipped.
     
    Full disclosure: Author is long AAPL.

    Stocks: AAPL
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