[torifile]

Usually MCQ starts these threads, but I haven't seen him 'round these parts in quite some time. AAPL is reporting earnings today.

Originally Posted by Marketwatch Analysts surveyed by FactSet Research estimate Apple will earn $1.10 a share on $8.02 billion in revenue for the quarter, compared to earnings of $904 million, or $1.01 a share, on $6.22 billion in sales in the same period a year ago. ... Gene Munster, of Piper Jaffray, has called Apple's line of Mac computers, "the key to the quarter," and expects the company to post Mac sales of about 2.8 million units. Munster said that both Mac and iPod sales were likely helped during the quarter by an Apple back-to-school promotion in which it gave full rebates for an iPod touch if it was purchased along with a Mac.

So, what do we think? The recent economic madness shouldn't have affected the quarter too terribly, but I'll be interested in hearing what they say about the Christmas quarter. I believe that a disappointing earnings announcement (in other words, meeting expectations) has been factored into the current share price, but we'll still see a hit. Could be another good buying opportunity.

No matter what they announce with respect to forward guidance will cause the stock to jump significantly. I'm thinking we'll have to wait until next quarter's announcements to see any real movement upwards.

Thoughts?

[Wyatt]

I'm not one for making predictions, but I think the guys at AI really should clear up all the spellcheck squigglies in Word before they screen-grab tables.

http://www.appleinsider.com/articles...s_preview.html

[torifile]

They've reported and blew out expectations again. $1.26 EPS. Guidance next quarter is broad but good - between $1.01 and $1.35. Nearly 7 million iPhones in the quarter! 11 million iPods. Mac sales were slightly disappointing with 2.6 million.

[Windswept]

This whole thing with no Firewire will, I think, contribute to lower MacBook sales numbers for upcoming quarters, unless Apple decides to remedy the situation.

[Ryan]

Originally Posted by torifile They've reported and blew out expectations again. $1.26 EPS. Guidance next quarter is broad but good - between $1.01 and $1.35. Nearly 7 million iPhones in the quarter! 11 million iPods. Mac sales were slightly disappointing with 2.6 million.

So they beat their goal of 10 million iPhones by nearly three months? Not too shabby.

[Wrao]

Originally Posted by Windswept This whole thing with no Firewire will, I think, contribute to lower MacBook sales numbers for upcoming quarters, unless Apple decides to remedy the situation.

I do not think so. If anything, the higher pricing will contribute to lower sales. But, even then, the White MacBook is still very appealing.

[Wrao]

Very solid earnings, I stand by some of my earlier statements that I think Apple will be a very good company to weather the various financial crises that have arisen over the past month. For all the doom and gloom talk of depressions and recessions and compressions, Apple still appears to be very strong, with a solid business model and excellent potential to continue to be profitable and grow even during a generally slower market.

[torifile]

Something that hasn't yet been mentioned but bears on this and future quarters is the way AAPL's been account for the iPhone (and AppleTV) revenue. They're using subscription based accounting so they are spreading out revenue from the iPhone and AppleTV over the course of 8 quarters. This is what they call GAAP - generally accepted accounting practices - and really has a big impact on earnings. Jobs said that non-GAAP earnings would have been much higher. I've read reports of upto $2.70/share.

This bears on other quarters for 2 reasons. First it means that AAPL has already banked something like $.20/share for the next 2 years. If AAPL has another great iPhone quarter, they'll have banked $.40/share. Rinse repeat for each subsequent quarter. It's like a ball rolling downhill picking up speed.

The second thing is that this affects their P/E ratio. If they used the non-GAAP numbers to report and pro-rate that over the course of the year, AAPL is trading, right now, at a P/E of less than 10! IOW, really fucking cheap

[bassplayinMacFiend]

Originally Posted by Wrao I do not think so. If anything, the higher pricing will contribute to lower sales. But, even then, the White MacBook is still very appealing.

I personally doubt the Plasti-MacBook will be available past Christmas. Apple has a backlog of plasti parts to sell and once they're gone, they're gone.

[bassplayinMacFiend]

Originally Posted by torifile Something that hasn't yet been mentioned but bears on this and future quarters is the way AAPL's been account for the iPhone (and AppleTV) revenue. They're using subscription based accounting so they are spreading out revenue from the iPhone and AppleTV over the course of 8 quarters. This is what they call GAAP - generally accepted accounting practices

Not to be too nitpicky, but GAAP stands for Generally Accepted Accounting Principles. *Removes Cost Accountant Hat*

You are correct though, the way Apple recognizes revenue for AppleTVs and iPhones does lead to a huge backlog of unrealized revenue. Looking at a statement of cash flows will show the actual monies coming in and inflating their war chest to the reported $25B though.

[kieran]

Yeah, Gruber did a post a few days ago about Jobs explaining all of this.

Here it is

It just goes through and explains a few things out.

[bassplayinMacFiend]

Originally Posted by Windswept This whole thing with no Firewire will, I think, contribute to lower MacBook sales numbers for upcoming quarters, unless Apple decides to remedy the situation.

Apple reported strong initial demand for their updated laptops during the earnings conference. Even if all the people not buying the new MacBooks (like me, I bought something else from a different company) added up to 5%, it's still not much compared to the 1.6 million sales made last quarter.

What I do think is very telling is Apple's desktop sales didn't hit a million units last quarter. I'm wondering if iMac sales are one hit wonders. In other words, I bought an iMac G5 in 9/2004. Today this computer won't do what I need it to do because it's running an IBM chip, and one of my hobbies (as explained in a different thread) requires Windows (yuk). My iMac G5 has a beautiful and still perfectly functioning 20" LCD, but it's glommed onto obsolete (for me) hardware. I have to toss the display as well as computing parts in order to upgrade. I find this to be a terrible waste and will never buy an AIO again.

I'm sure I'm not the only one who's bought an iMac then realized how horrible it is to toss the display when it comes time to upgrade, so people like me need a different model to move to once my iMac is too old. Unfortunately, Apple doesn't offer anything to someone like me, who's willing to spend about $1.5K on a new desktop, but doesn't want the display attached to the desktop. If I want a completely unupgradeable after purchase computer, I'll buy a laptop.

I still love Apple laptops, but nothing in their home desktop segment fits my needs and it seems Apple doesn't deem me an important sector to target, so I will keep my plasti-MacBook, but have switched to a different brand for my home desktop computer.

[torifile]

A great article on Seeking Alpha (has anyone heard of these guys before?) about the GAAP thing. Interesting reading. Right now, the GAAP numbers suck for us, but in the near future, it'll be very rosy for Apple's EPS even in down quarters.