Wed, Jul. 22, 12:15 PM
- Cowen has downgraded Apple (NASDAQ:AAPL) to Market Perform after the company beat FQ3 estimates, offered light FQ4 guidance, and reported slightly below-consensus iPhone sales. Others on the Street are reiterating their existing ratings (largely bullish).
- Upbeat on Monday, Cowen's Tim Arcuri now thinks "evidence of a widespread demand reset from China is mounting." He cites not only FQ3 iPhone sales, but also Chinese auto sales figures and results from multiple chipmakers. In addition, Arcuri states field work suggests new iPhone builds are down relative to the past cycle for the first time. "[W]hile we are very bullish about AAPL’s ability to tap into a much broader and deeper demand opportunity for a price-reduced 6/6+ than prior 'old' models, this is a different narrative."
- UBS' Steve Milunovich (Buy): "Our call that the phone ASP would be $660 was correct but we overestimated units, especially with channel inventory declining ... Despite seasonally low iPhone units, we believe Apple is building long-term value and maintain our $150 price target. Also, it is unclear if Sep guidance includes 6s sales to China, which were delayed into October last year.”
- Canaccord's Mike Walkley (Buy): "[W]e believe the current iPhone 6 and upcoming iPhone 6s should continue to post strong sales and high-end smartphone market share gains ... with only 27% of the iPhone installed base having upgraded to the iPhone 6/6 Plus devices by [FQ3], we anticipate continued strong replacement sales through 2015."
- "As Apple has become the 'gold standard' of technology, it is held to a higher standard," argues FBR's Daniel Ives (Outperform). With Greater China revenue up 112% Y/Y in FQ3, he considers China concerns overblown, but wants to see more transparency regarding Watch sales.
- Prior Apple coverage, CC transcript
Tue, Jul. 21, 6:53 PM
- Apple Watch (NASDAQ:AAPL) accounted for well over 100% of the $952M in annual revenue growth seen by Apple's Other Products segment in FQ3, CFO Luca Maestri mentioned on the earnings call. Bloomberg observes Maestri's remarks point to 1.9M+ Watch sales, if one assumes a $499 ASP. (live blogs: WSJ, BI)
- Tim Cook stated Watch sales were higher in June than in April or May. He once more declined to provide specific Watch revenue/unit figures, while asserting Apple has chosen not to do so to keep info out of competitors' hands.
- He also once more defends the iPad (units -18% Y/Y to 10.9M), estimating Apple has 76% of the market for $200+ tablets and stating customer sell-through (11.2M) was better than sell-in thanks to a 300K-unit drop in channel inventories.
- The iPhone (units +35% to 47.5M, but below a ~49M consensus) saw channel inventories fall by 600K Q/Q, bringing them to the low end of Apple's 5-7 week target range. Greater China iPhone sales were up 87% Y/Y and Mac sales 33%. 27% of iPhone users are said to have upgraded to a 6/6+.
- Also: 1) A strong dollar had an 8% impact on revenue growth, and a $24 impact on iPhone ASP; the latter was still up $99 Y/Y, thanks in part to the 6+. 2) 89% of Apple's cash balance is offshore. 3) The retail store count is up to 456 (190 outside the U.S.). 4) 8,500 third-party Watch apps are now available.
- AAPL -6.6% AH to $122.16.
- FQ3 results/FQ4 guidance, details
Tue, Jul. 21, 4:59 PM
- Apple (NASDAQ:AAPL) had an FQ3 gross margin of 39.7%, +30 bps Y/Y and above a 38.5%-39.5% guidance range. FQ4 GM guidance is also at 38.5%-39.5%.
- Product line performance: iPhone revenue (63% of total revenue) +59% Y/Y to $31.4B; units +35%. iPad revenue -23% to $4.5B; units -18%. Mac revenue +9% to $6B; units +9%. Services (iTunes, App Store, AppleCare, Apple Pay, etc.) +12% to $5B. Other products (Apple Watch, iPod, Beats, accessories, etc.) +49% to $2.6B.
- Regional performance: Americas revenue +15% Y/Y to $20.2B. Europe +19% to $10.3B. Greater China +112% to $13.2B. Japan +9% to $2.9B. Rest of Asia-Pac +26% to $3B. International markets made up 64% of revenue vs. 69% in FQ2.
- ASPs: iPhone ASP was $660 vs. $659 in FQ2 and $687 in FQ1. iPad ASP was $415 vs. $430 in FQ2 and $419 in FQ1. Mac ASP was $1,257 vs. $1,231 in FQ2 and $1,258 in FQ1.
- Financials: GAAP SG&A spend rose 25% Y/Y to $3.56B; R&D spend rose 27% to $2.03B. $10B was spent on buybacks, up from FQ2's $7B. Apple ended FQ3 with nearly $203B in cash/investments (much of it offshore), and over $47B in debt.
- Apple has declared its regular quarterly dividend of $0.52/share. The next dividend is payable on Aug. 13 to shareholders on record as of Aug. 10.
- Shares have fallen to $121.60 in AH trading. Earnings call starts at 5PM ET (webcast).
- FQ3 results/FQ4 guidance, PR
Tue, Jul. 21, 4:33 PM| Tue, Jul. 21, 4:33 PM | 253 Comments
Mon, Jul. 20, 5:30 PM
Tue, Apr. 28, 12:11 PM
- Apple (AAPL +0.3%) is up slightly after beating FQ2 estimates, offering in-line FQ3 guidance, and upping its dividend and buyback authorization. At least 9 firms have hiked their targets; no upgrades or downgrades have arrived.
- Brean's Ananda Baruah (target hiked to $170) thinks Street estimates remain "materially low" through 2017, given iPhone unit growth, the margin boost provided by a mix shift towards iPhones and (within iPhone sales) the 6+, and operating expense leverage. He forecasts iPhone shipments and EPS respectively rising to 285M and $12.73 by FY17 (ends Sep. '17).
- Citi's Jim Suva, who added Apple to Citi's Focus List 4 weeks ago, still sees carrier upgrade plans, low multiples, margin expansion, Apple Pay/Passbook, and enterprise growth acting as catalysts. Canaccord's Mike Walkley (target hiked to $155) sees the iPhone installed base growing to 500M this year.
- Those offering more cautious takes often question the sustainability of iPhone growth. Nomura states sales growth in developed markets appears to have fallen in half in FQ2, and expects Chinese growth to slow the way Japanese growth has. Raymond James' Tavis McCourt (recently downgraded to Market Perform) also expects slowing iPhone growth, and (given a $171B+ offshore cash balance) thinks major foreign acquisitions are possible in the absence of a tax holiday.
- Returning to Twitter after a 5-week hiatus, Carl Icahn says he still considers Apple "undervalued and misunderstood," and expects to "put out another in-depth report within two weeks." His last report (involved a $216 target) was published in February.
- Prior Apple earnings coverage, CC transcript
Mon, Apr. 27, 5:01 PM
- With strong iPhone sales (and perhaps also lower memory prices) providing a lift, Apple (NASDAQ:AAPL) had an FQ2 gross margin of 40.8%, up 150 bps Y/Y and above guidance of 38.5%-39.5%. FQ3 GM guidance is at 38.5%-39.5%.
- Product line performance: iPhone revenue (69% of total revenue) +55% Y/Y to $40.3B; units +40%. iPad -29% to $5.4B; units -23%. Mac +2% to $5.6B; units +10%. Services (iTunes, App Store, AppleCare, Apple Pay, etc.) +9% to $5B. Other products (iPod, Apple TV, Beats) -10% to $1.7B.
- Regional performance: Americas revenue +19% to $21.3B. Europe +12% to $12.2B. Greater China +71% to $16.8B. Japan -15% to $3.5B. Rest of Asia-Pac +48% to $4.2B. International sales were 69% of revenue, up from FQ1's 65%.
- iPhone ASP was $659, down from FQ1's $687 but up from FQ4's $603 (iPhone 6 Plus boost). iPad ASP was $430 vs. $419 in FQ1 and $432 in FQ4. Mac ASP was $1,231 vs. $1,258 in FQ1 and $1,200 in FQ4.
- GAAP SG&A spend rose 18% Y/Y to $3.46B. R&D spend rose 35% to $1.92B.
- $7B was spent on buybacks, up from FQ1's $5B. Apple ended FQ2 with over $193B in cash/investments (much of it offshore), and nearly $44B in debt.
- Apple's increased quarterly dividend of $0.52/share is good for a yield of 1.5% at current levels. The next dividend is payable on May 14 to shareholders on record as of the May 11 close.
- AAPL +1.5% AH to $134.59. The CC is underway (webcast).
- FQ2 results/FQ3 guidance, PR
Mon, Apr. 27, 4:35 PM
- Apple (NASDAQ:AAPL): FQ2 EPS of $2.33 beats by $0.17.
- Revenue of $58.01B (+27.1% Y/Y) beats by $1.95B.
- 61.2M iPhones (above expectations), 12.6M iPads (below expectations), 4.6M Macs (near expectations).
- Expects FQ3 revenue of $46B-$48B vs. $47.06B consensus.
- Dividend increased by 11%, buyback authorization increased by $50B to $140B.
- Shares +2.2% AH.
- Press Release
Sun, Apr. 26, 5:35 PM
Tue, Jan. 27, 5:47 PM
- Tim Cook has provided a more concrete timetable for Apple's (NASDAQ:AAPL) smartwatch launch on the FQ1 CC. 9to5 Mac previously reported hearing the Watch would launch by the end of March; Apple had before only said it would ship in "early 2015." (live blogs: WSJ, BI)
- CFO Luca Maestri notes forex headwinds had a 4% impact on revenue growth (plenty of other tech giants can relate), with the yen and ruble the biggest culprits. He suggests the impact going forward will be around 5%; more favorable component costs will partly offset.
- Maestri adds iPhone channel inventory fell by 200K Q/Q, and that supply only met up with demand in January. iPad inventory rose by 1M.
- Other details: 1) iPhone sales more than doubled Y/Y in mainland China and Brazil. 2) App Store revenue rose 41% Y/Y. iTunes/media revenue rose by $200M to $2.6B. 3) Apple now has 447 retail stores (182 outside the U.S.).
- AAPL +4.9% AH. FQ1 results, details.
Tue, Jan. 27, 4:57 PM
- Thanks to a stronger-than-expected iPhone mix, Apple (NASDAQ:AAPL) had an FQ1 gross margin of 39.9%, up 200 bps Y/Y and above guidance of 37.5%-38.5%. FQ2 GM guidance is at 38.5%-39.5%.
- Product line performance: iPhone revenue (69% of total revenue) +57% Y/Y to $51.2B; units +46%. iPad -22% to $9B; units -18%. Mac +9% to $6.9B; units +14%. Services (iTunes, App Store, Apple Pay, etc.) +9% to $4.8B. Other products (iPod, Apple TV, Beats, accessories, etc.) -5% to $2.7B.
- Regional performance: Americas revenue +23% to $30.6B. Europe +20% to $17.2B. Greater China +70% to $16.1B (pent-up demand for bigger iPhones). Japan +8% to $5.4B. Rest of Asia-Pac +33% to $5.2B. International sales were 65% of revenue.
- With the 6 Plus providing a boost, iPhone ASP rose to $687 from $603 in FQ4 and $561 in FQ3. iPad ASP fell to $419 from $432 and $443. Mac ASP rose to $1,258 from $1,200 and $1,255.
- SG&A spend rose 18% Y/Y to $3.6B, and R&D spend 43% to $1.9B.
- $5B was spent on buybacks. Apple ended FQ1 with over $177B in cash/investments, and over $36B in debt.
- AAPL +5.3% AH to $114.90. FQ1 results, PR.
Tue, Jan. 27, 4:33 PM| Tue, Jan. 27, 4:33 PM | 246 Comments
Mon, Jan. 26, 5:35 PM
Mon, Jan. 5, 7:18 PM
- Apple's (NASDAQ:AAPL) FQ1 report will arrive after the close on Tuesday, Jan. 27. As usual, the CC will be held at 5PM ET.
- Consensus is for revenue of $66.42B (+15.3% Y/Y), and EPS of $2.54 (+23%). Last month, Morgan Stanley pegged the iPhone sales consensus at 63M; FQ1 iPhone sales totaled 51M a year ago.
Oct. 20, 2014, 6:15 PM
- Though FQ4 iPhone sales beat estimates, iPhone channel inventory is below Apple's (NASDAQ:AAPL) historical 4-6 week target range, the company disclosed on the CC. Apple is upping its target range to 5-7 weeks, but doesn't expect to reach it in FQ1. (live blogs: BI, WSJ)
- As expected, a mix shift towards the iPhone 6 and the costlier/supply-constrained 6 Plus is boosting iPhone ASPs. "We're selling everything that we make," Tim Cook interjected during a question about product mix.
- iPad channel inventory fell by 500K during FQ4. In spite of the 14% Y/Y drop in iPad revenue, Cook dismisses suggestions the market is saturated, noting over half of sales still go to first-time buyers. He did, however, admit consumers hold onto iPads (less likely to be sold with subsidies/installment plans) longer than they hold onto iPhones.
- CFO Luca Maestri Maestri noted Apple, like many other U.S. companies, is dealing with forex headwinds caused by a strong dollar. He added forex is factored into FQ1 guidance.
- Other details: 1) Apple bought 7 more companies in FQ4 (only 4 are known), bringing the FY14 total to 20. 2) App Store revenue rose 36% Y/Y. 3) Cook asserts Mac market share (previous) is at its highest level since 1995. FQ4 Mac revenue was 25% above iPad revenue. 4) Apple expects to open 25 new stores in FY15, ~75% of which will be outside the U.S.
- AAPL +1.5% AH. FQ4 results, details.
Oct. 20, 2014, 5:00 PM
- Apple (NASDAQ:AAPL) had an FQ4 gross margin of 38%, +100 bps Y/Y and at the high end of a 37%-38% guidance range. FQ1 GM guidance is at 37.5%-38.5%.
- Product line performance: iPhone revenue (56% of total revenue) +21% Y/Y to $23.7B, after growing 9% in FQ3; units +16%. iPad revenue -14% to $5.3B, after falling 8% in FQ3; units -13%. Mac revenue +18% to $6.6B, after rising 13% in FQ3; units +21%.
- iTunes/software/services revenue +8% to $4.6B. Accessories +13% to $1.5B. iPods -28% to $410M.
- Regional performance: Excluding retail, Americas revenue +17% to $16.2B (stronger than in recent quarters); Europe +19% to $9.5B (likewise); Greater China +1% to $5.8B; Japan +5% to $3.5B. Rest of Asia-Pac -3% to $1.9B. Retail +15% to $5.1B.
- Helping margins: iPhone ASP rose to $603 from $561 in FQ3 and $596 in FQ2. iPad ASP fell to $432 from $443 in FQ3 and $465 in FQ2. Mac ASP fell to $1,200 from $1,255 in FQ3 and $1,334 in FQ2.
- GAAP R&D spend +44% Y/Y to $1.69B. SG&A spend +18% to $3.16B.
- $17B was spent on buybacks in FQ4, and $45B over the whole of FY14. Apple ended the quarter with over $155B in cash/investments, and over $35B in long-term debt and commercial paper.
- AAPL +1.2% AH. CC at 5PM ET. FQ4 results, PR.
AAPL vs. ETF Alternatives
Apple Inc designs, manufactures, & markets mobile communication & media devices, personal computers, & portable digital music players, & sells a variety of related software, services, accessories, networking solutions, & third-party digital content.
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