Wednesday, January 23, 2013

Apple (AAPL) Reports Q1 Earnings

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Apple reported Q1 2013 earnings and the stock is selling off in after-hours trading down 10% around $460 a share.

The company reported that it sold 47.8 million iPhones in the quarter, compared with 37 million in the same quarter a year ago. Many investors had hoped that the company would sell 50 million iPhones, which drives Apple's earnings. Sold a "record" 22.9 million iPads in the quarter, compared to 15.4 million a year ago. The company also sold 4.1 million Mac computers, compared to 5.2 million in the same quarter last year.

For the quarter ended Dec. 29, Apple reported a profit of $13.08 billion, up 0.1% from $13.06 billion a year earlier. On a per-share basis, earnings fell to $13.81 a share from $13.87 a share as the latest period had slightly more shares outstanding.

Revenue jumped 18% to $54.5 billion, with 61% of the top line coming from international sales.
In the conference call management stated it will from now on give more realistic earnings estimates, compared to past sandbag (beatable) estimates. Being known for traditionally giving conservative guidance, said it expects second-quarter revenue between $41 billion and $43 billion. Analysts polled by Thomson Reuters forecast revenue of $45.38 billion. Apple didn't provide a per-share earnings estimate for the second quarter.

The company still can boast about the amount of cash it has hoarded: $137 billion or $145 per share.
ITZ has noted numerous times on Apple's ex-cash valuation link

Most expected risks for Apple's ASP/gross margin, slowing growth, evolutionary versus revolutionary steps in innovation, legal disputes, macro and potential for supply constraints.

Expectations are for easier year over year compares, potential positive supply chain data into the next product cycle, & improving gross margin likelihood to help reaccelerate earnings and see the company as well-positioned to continue to take value share in its core smartphone, tablet, and PC markets.

ITZ continues to target $775 read  with $13.81 Q1 reported.... estimates Q2 '13 $11.65; Q3 $11.14 & Q4 $10.91 with FY $47.51 & CY $50 eps estimates.

1 comment:

itzstockchartz said...

ITZ differs with NOMURA:
The weak Q2 dynamics seem to support our view that Apple is moving into an ex-growth phase in which unit growth is likely to come increasingly at the expense of gross margin declines. The net effect is limited earnings growth, EPS that likely tops-out at $50, which is likely to attract a multiple little better than comparable ex-growth peers such as Microsoft and Cisco. An 8x ex-cash multiple on our EPS forecast of $50 plus $89 in excess cash drives our fair value of $490.

ITZ believes Apple should trade @ a 12 ex-cash multiple with a $50 est eps for FY '13 and $175 cash by year end. Placing a PT of $775.

As with over bullish PT back in Sept 2012... the current sentiment has swung to the over bearish side. The stock is trading at oversold levels. ITZ has bee fully invested on suggested buys, but individuals who own or want to get into Apple, or even add...ITZ believes valuations are very attractive.