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David Room
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David is an investor specialising in tech and stocks connected to the smartphone revolution. Through his work in the IT sector he has built-up a deep understanding of the huge shift taking place in this innovative industry. David has been watching and actively trading AAPL since the launch of... More
  • My Apple Q1 Earnings Estimates 0 comments
    Jan 23, 2013 2:15 PM | about stocks: AAPL

    Hi all,

    AAPL

    Well I thought I'd have a bit of fun and give forecasting tonight's
    report a go. Here are my forecasts, both a Bear and Bull case. I'd be interested to hear your thoughts before and after the big event.

    I am naturally cautious and probably biased towards the bears and this is reflected in my forecast, however note that this mostly stems from reductions in ASPs and light iPad sales as opposed to being outright bearish about iPhone units. In fact, my iPhone numbers are on the high side of consensus.

    My thoughts are that we will see strong unit sales of iPhones but a
    disappointing ASP due to shift in mix (trend towards lower memory devices). I think we see light iPad sales due to a drop-off in the 9'7 form factor supplemented by Mini sales of around 7-10m units. ASPs will suffer accordingly.

    Overall I am more confident in my Bull Case forecast, but due to
    the unprecedented uncertainty and media noise cannot rule out either a consensus miss or indeed a potential blow out ($15+) if margins and ASPs surprise.

    Good luck everyone tonight. Apple the company is not dead yet, far from it. Apple the stock is a different question and it is a lottery which way things will go. I am expecting a half decent report will see a strong bounce but I am mostly in cash as there are just too many factors at play here.

    Regardless, soon we will know if Apple is still investable or not, and in some ways it will be a great relief to just know one way or the other!

    Apple Q1 2013 Earnings Forecast

    Apple's Forecast

    Revenue $52,000
    EPS $11.75

    Consensus Rev $54,560
    Consensus EPS $13.31

    Q1 2012 EPS $13.87
    --------------------------------------------------------

    David Room Bear Case Forecast

    iPads 20.5m $495 $10,148
    iPods 14m $155 $2,170
    Macs 5.1m $1260 $6,426
    iPhone 50m $595 $29,750
    iTunes $2,500
    Peripherals $690
    Software $880

    Total (Revenue) $52,564

    Gross Margin (38.5) $20,237
    Opex $4,150
    Op Income $16,087
    OI&E $420
    Net before tax $15,667
    Taxes (25.5%) $3,995
    Net income $11,672

    EPS $12.34

    Outstanding shares 946

    -----------------------------------------------------
    Forecasting 1.1% Revenue beat; 5.0% EPS beat

    TTM EPS Falls to $42.63 from $44.16

    PPS @ 10.0x = $426.30
    PPS @ 10.5x = $447.62
    PPS @ 11.0x = $468.93
    PPS @ 11.5x = $490.25
    PPS @ 12.0x = $511.56
    PPS @ 12.5x = $532.88
    PPS @ 13.0x = $554.19
    PPS @ 14.0x = $596.82

    David Room Bull Case Forecast

    iPads 22m $500 $11,000
    iPods 15m $155 $2,325
    Macs 5.2m $1260 $6,552
    iPhone 56m $600 $33,600
    iTunes $2,500
    Peripherals $700
    Software $900

    Total (Revenue) $57,577

    Gross Margin (39%) $22,455
    Opex $4,050
    Op Income $18,405
    OI&E $400
    Net before tax $18,005
    Taxes (25.5%) $4,591
    Net income $13,414

    EPS $14.18

    Outstanding shares 946

    -----------------------------------------------------
    Forecasting 10.7% Revenue beat; 20.6% EPS beat

    TTM EPS Rises to $44.47 from $44.16

    PPS @ 10.0x = $444.47
    PPS @ 10.5x = $466.94
    PPS @ 11.0x = $489.17
    PPS @ 11.5x = $511.40
    PPS @ 12.0x = $533.64
    PPS @ 12.5x = $555.88
    PPS @ 13.0x = $578.11
    PPS @ 14.0x = $622.58

    Disclosure: I am long AAPL.

    Stocks: AAPL
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