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Analysts release their Q2 2011 earnings estimates
Apple will announce its quarterly earnings after the bell closes on Wednesday, April 20. The Cupertino company will unveil sales figures for the newly launched iPad 2 and possibly the Verizon iPhone. Long lines and delayed ship times indicate the iPad 2 is selling well, but early estimates suggest the Verizon iPhone is not selling as strongly as expected. Before Apple makes these figures official, analysts are weighing in with their preview of Apple's completed quarter. In previous quarters, blogger analysts and professional analysts differed greatly in their prediction of Apple's sales figures. This quarter, though, the two groups are in relatively close agreement. According to the predicted figures compiled by Fortune, Apple's revenue will beat its guidance of US$22 billion and land between $23 and $24 billion. iPhone sales are expected to hit the 16 to 18 million units sold mark, iPods 9.82 to 9.96 million, iPads 6.2 to 6.7 million, and Macs 3.6 to 3.7 million. For additional details, point your browser to Fortune's website where you can find a detailed chart listing the previews from approximately 50 analysts. Be sure to mark your calendar for 5 PM on Wednesday, April 20, as we will be covering Apple's earning conference call. Join us as we discover how these estimates compare to Apple's reported numbers.
Apple will be the first $1 trillion company
"A million dollars isn't cool. You know what's cool? A billion trillion dollars." If there's one company that will hit a trillion dollar market cap, it will be Apple, according to USA Today. Apple could do it in the next three years. USA Today came up with Apple's trillion dollar market cap based on its five-year geometric mean average increase of 59% a year. So given today's market value of about $310 billion, if Apple continues to increase in value by 59% each year, in 2014, we'll have the first trillion dollar company. How huge is that? The most valuable company ever was Microsoft in 2000. That year it hit a $604 billion market cap. So, could Apple beat Microsoft's value in its best year by more than 65%? My money is on Apple (and has been since November of 2002 when I started buying the stock). The way I look at it is that Apple has its hands in three primary markets: computers, smartphones and tablets. The first market is fairly maxed out -- there's not a lot of room for the market as a whole to grow -- but since Apple only has around 10% of that market, it still has lots of space to grow in it. The inverse is true for smartphones and tablets. Apple is a key player in both those markets, but each of those markets still has decades of growth in front of them, which means that even if Apple doesn't hold a lead spot, it still has tremendous room for the growth of its products in those markets.
iPhone use by teens at a record high and growing
Piper Jaffray has been polling US teens on their iPhone adoption rates twice a year, and the current bi-annual report was released yesterday. In the survey, 4500 teens were asked about the iPhones that they already own or plan to purchase over the next six months. Of those surveyed, 17 percent responded that they already own an iPhone, and a full 37 percent told Piper Jaffray that they plan to buy one (or have their parents buy it for them) over the next six months. If this sample is any indication, the future looks great for Apple in the teen segment. I thought the six month time frame was telling, since even the most conservative of pundits believe the iPhone 5 will be out six months from now. Apple still owns the MP3 market with 80 percent saying they own such a device, and out of that, 86 percent own some flavor of iPod with everyone else being left in the dust. This is not all hearts and flowers though, since in the poll taken last spring, 92 percent of teens owned an iPod, with total MP3 adoption of 86 percent. It may mean that more teens are using iPhones to listen to music, with over half reporting that they listen to music on their cell phone, the highest number reported for that stat. Though it's not specifically stated, I don't think it would be a stretch to say that more teens are listening to music on Apple devices than any other brands in the category. In a question about tablet sales, 22 percent of teens say they already have one, with another 20 percent planning to buy one in the next six months. I think that we can all agree that the lion's share of those purchases will be iPads as well. [via Apple 2.0]
Nasdaq to diminish Apple's portion of the Nasdaq-100
The Wall Street Journal reports that Nasdaq will drop Apple's profile in its Nasdaq-100 stock index, lowering Apple's share from 20.5 percent to around 12.3 percent, more in line with the number of actual Apple shares out there. Apple is one of 81 companies who are seeing their shares lowered by the rebalance, while 19 other companies, including Google and Microsoft, will have their shares increased. The index was last adjusted in this way back in 1998, but back then, Apple obviously wasn't nearly as big a company financially as it is now, so Nasdaq is simply adjusting things to bring shares more in line with the actual market. The changes should take effect on May 2, and Nasdaq does say that it expects some trades to happen as a result of the changes, which may lead to some "instability" in the markets for a short period. But in general, the changes are just to make sure that a huge amount of growth (or failure) on Apple's part doesn't upset the index too much. As always, we are not financial professionals, and any news about AAPL stock should not be taken as financial advice. [via AppleInsider]
Forbes: China growth will propel AAPL shares to $547 in the next nine months
Eric Jackson at Forbes has written a piece with some astounding numbers about Apple's business in China. Most impressively, Jackson thinks that because of Apple's China business, Apple shares will hit $547 per share by January 2012, which is only nine months away. That's an impressive upswing from AAPL's closing price of $348.51 yesterday. Jackson opines that Apple's four current Chinese Apple stores bring in US$1.3 billion per year, per store. With Apple set to open as many as 25 retail stores in China, and the Chinese "gaga for Apple," that means Apple's Chinese retail stores alone could draw in another US$32bn a year for the company. That's not counting iPhone sales through carrier stores, Apple's online China store or Cybermart, Apple's largest third-party retailer (owned by Foxconn). Cybermart has only 34 retail outlets today, but it's planning on building up to 500 locations in the future, each with its own special Apple Shop within the store (much like Best Buy's Apple Shop store-within-a-stores). With the second largest economy on the planet, it's no wonder that Jackson sees China as key to Apple's future growth. And it's likely that China will propel Apple to its first $100bn+ net revenue fiscal year ever when Apple's fiscal year ends in September. Disclaimer: The author holds a position in AAPL. TUAW does not provide investment advice; consult an expert before buying or selling equities.
eBay reveals iPad 2 sales numbers
(Image from eBay.com) While we'll need to wait until the April 20th Q2 2011 Apple earnings call to get the official figures on exactly how many iPads and iPad 2s have been sold, CNET has published some stats from online auction house eBay on how many of the new iPads have changed hands through its service. If eBay's numbers are any indication, Apple shareholders will have a lot to smile about. Just under 12,000 iPad 2s were sold in the two weeks between the introduction of the iPad in the US and the international launch last Friday. The surprising statistic was that many of those iPad 2s (65%) were sold within the US. At last year's launch of the original iPad, the majority of eBay purchasers were outside of the country (also 65%). International purchases of the iPad 2 are mainly going to Canada, Russia, Hong Kong, Japan and the UK. Last year's figures showed a large volume of 16 GB iPads heading to Russia, and Russian buyers also paid the highest average markup at a whopping $306 over retail for the 32 GB model.
Apple Q2 2011 earnings call scheduled for April 20
Apple's second fiscal quarter ends this week on Thursday, March 31, and the company has already scheduled the earnings call with financial analysts to discuss just how good (or bad) things were during the quarter. As you can see, the call is scheduled for 5 PM ET (2 PM PT) on Wednesday, April 20. That's at the time we normally host TUAW TV Live, so we may look into combining the call with a livestreaming video event for readers to join in on rather than our usual liveblog. You'll be able to listen in on the call here, and we'll be sure to remind you of the event in the days leading up to the call. [via MacStories]
Credit Suisse initiates AAPL coverage on up and down day
AAPL shares got slapped silly before market open this morning after a JMP Securities analyst initiated a rare downgrade on AAPL stock yesterday. The downgrade was due to assumed problems with Apple's ability to manage the supply chain for its iOS devices in the wake of the disaster in Japan. But not soon after the AAPL sell-off, many other analysts came to Apple's defense, including Barclays Capital's Ben Reitzes. Reitzes stated that the perceived effects of the troubles in Japan were overblown in relation to how Apple's supply chain would be affected. In a research note, Reitzes stated, "While still a fluid situation, we believe the comments made by QCOM [Qualcomm] may alleviate at least some concerns for Apple given uncertainty around the iPhone supply chain for both current and future products (QCOM chips are used in Verizon iPhone 4s and iPad 2s, and we believe QCOM will be a major supplier for the iPhone 5)." "The comments made by QCOM" is referring to a statement by the company in which it said it foresees no significant effects on its ability to deliver products because of the earthquake and tsunami in Japan. That statement, along with that fact that this morning Credit Suisse initiated coverage on shares of Apple with an outperform rating and a massive $500 price target, led APPL to regain some of its earlier losses and close at $334.64 a share. Disclaimer: The author holds a position in AAPL. TUAW does not provide investment advice; consult an expert before buying or selling equities.
What if you had bought AAPL stock instead of Apple products?
Since 2003, the rise of Apple's stock has been stratospheric. Currently AAPL sits at US$346, but many analysts expect it to be at $450 or higher in the next 12 months. The growth of the stock over the years is attributed to Apple's bottom line, its creative and business teams, the fact that it has zero debt, tens of billions of dollars in the bank, and of course, the fact that it sells the hottest consumer electronics on the planet. But what if instead of buying Apple's products, like a PowerBook or original iPod, those who are most responsible for the stock's increase -- you, the consumer -- bought AAPL stock? Software engineer Kyle Conroy has compiled a list of how much money you would have today if, for example, instead of spending $5700 on a Apple PowerBook G3 250 when it was released on November 10, 1997 you'd spent that same amount on AAPL stock. The answer? Instead owning of a laptop that's probably worth all of twenty bucks today, you'd own $330,563 of AAPL stock. Makes you cringe, doesn't it? For those of you who bought an original 5 GB iPod for $399 on October 23, 2001, your money, had you purchased AAPL stock, today would be worth $11,914. Spending $1599 on Apple's original iBook G3 on July 21, 1999 would net you $32,031 in AAPL stock today. The list goes on and on. The good news is that Apple is one of the strongest, healthiest companies on the planet, which controls many emerging markets that still have a decade or more of growth (smartphones, tablets, etc.). In three years today's closing price of $346 is going to make AAPL stock look cheap.
The case for an Apple stock split redux
Just about a year ago I wrote a post explaining all the hoopla over an expected AAPL stock split which never happened. At that point AAPL shares were trading at $202.86 and many felt that it was just too expensive for most small investors to buy. Last week, Apple closed at $348.14 after a few weeks of a roller coaster ride taking the stock down from a 52 week high of $364.90. No one really knows why the fairly quick drop happened. Rumors covered everything from the health of Steve Jobs and the question of a succession plan, to delays of the iPhone 5 and the iPad 2; but the fact of the matter is that an annual increase in price of around $145 ain't chopped liver. The vast majority of AAPL stockholders are investment firms, with the little guy being mostly left out due to the high stock price. It's emotionally unsatisfying to buy a handful of shares, and with only five or six shares in your portfolio the profit potential is decreased. That's mostly emotions talking, but the market is strongly influenced by emotions like fear, excitement and greed. So what would happen if Apple decided to split its stock anywhere from two to one, up to a four to one split? AAPL has split two for one three times, in 1987, 2000, and 2005 -- but it hasn't happened in the last six years. Philip Elmer-DeWitt writing for Fortune's Apple 2.0 posed an argument asking if the time is right. He made a reasoned case both for and against splitting.
Survey finds customers confident in Apple without Steve Jobs
If Steve Jobs were to step down as the CEO of Apple, what effect -- if any -- would it have on the likelihood of buying Apple products in the future? Research firms RBC Capital Markets and ChangeWave asked Apple customers this question in a survey conducted between January 31 and February 9. Of the 3,091 respondents, 84% said Steve Jobs departing Apple would have no impact on their buying decisions, and only 7% said they would be less likely to purchase Apple products. The new results are a notable change from a similar survey completed in June 2008. In the 2008 survey, 18% of respondents expressed a lower interest in buying from Apple if Steve Jobs left the company. On January 17, Apple announced Jobs would take his third leave of absence for medical reasons, igniting new concerns among investors and fans about the future of Apple without Jobs at the helm. This past week, Apple shares tumbled about 7% after new worries about the CEO's health began to circulate. Analyst Mike Abramsky suggests this survey shows that Apple may be bigger than its CEO; that Apple isn't just about Jobs anymore. "Consumers have had 3 years to evolve their perception of the Apple brand around its creative new products, cutting edge innovation, iTunes/App Store ecosystem and premium quality positioning -- beyond the buying pull of Apple's iconic CEO," Abramsky said. When Steve Jobs took a medical leave of absence in 2009, customers watched Apple perform successfully with Chief Operating Officer Tim Cook running the company. The company's stock rose 144%, revenue grew by 20%, and Apple shipped 25 million iPhones. This success seems to have boosted customer confidence in Apple. Does Apple lose its bite without Steve Jobs at the helm and become just another technology company? Will you continue to buy Apple products if he leaves? Leave your thoughts in the comments below.
AAPL hits another all time high
Once again, Apple stock (AAPL) has hit a new intra-day high, and this time it's a really good one. This is the first time Apple has broken into the lofty US$350s. Things are moving quickly, but when I started this post, AAPL was up 6.66 points to $353.17 on moderately high volume of about ten million shares, and no one knows where it will wind up for the day. Although the market is having quite a good day, this would indicate to me that much of the bad news and emotion based on the medical leave of Steve Jobs has been filtered out. It might also have something to do with the first delivery of the Verizon iPhone 4. In other news, Philip Elmer-Dewitt of Fortune's Apple 2.0 has noted that Susquehanna has upped its target price for AAPL to $465. There seems to be a bandwagon mentality that analysts are jumping onto. He goes on to say that Charles Wolf of the Needem Funds raised his estimate to $450, a jump of $75. Meanwhile, Brian White of Ticonderoga kept firm on his price target of $550. This is most likely based on AAPL breaking out of a trading range with support at $326 and resistance at $345.60 causing everyone to reshuffle their estimates. [via TradersHuddle.com]
RBC ups its target price for AAPL to $425
It could be partly because of Apple's 71% year over year revenue growth reported in yesterday's first fiscal quarter 2011 earnings report, or it could be the result of the 17 million iPads shipped in 2010. But either way, Boy Genius Report just let us know that RBC Capital Markets has revised their Apple stock price estimate, raising it from last week's $395 to $425 today following the earnings report. They are expecting Apple's revenue for 2011 to come in at just a shade under $100 billion, and 2012 looks to come in at $108 billion. With the first quarter showing Apple selling 16.24 million iPhones, 7.33 million iPads, 4.13 million Macs and 19.45 million iPods while revenue rose to $26.7 billion, 2011 looks to be off to a solid start -- and yet another year that I think back to 2005, when I could have bought Apple stock at around $65.
The most interesting things from Apple's Q1 earnings call
Perhaps, like me, you find most financial news and statistics boring. Perhaps, like me, when the AAPL liveblog came up yesterday, you decided it was probably time to go get some lunch instead. Fortunately, we have access to Business Insider, where they've compiled a quick and easy list of truly interesting items from the call yesterday, in plain English, with nary a mention of terms like "general allocation accounting" or "high-interest stock targets" (yawn). The long and short of it: There was no mention of Steve Jobs' illness, but Tim Cook and Peter Oppenheimer impressed, as did the company's standing in general (not surprising -- that's been the case for a while now). Apple's revenue grew 70% year over year, an astounding feat in an otherwise down economy. iTunes is now a $4 billion dollar industry in itself, and in just the first year of its life, the iPad has replaced 7% of all PC business. That's incredible, as are most of the other things on BI's list. Oh, and that $40 billion in cash that Apple's had to throw around for the past few years? Make that $60 billion. Yowza! Now that's worth paying attention.
Apple beats Street estimates; 16M iPhones, 7M iPads sold in Q1
This just in: Apple's financials for the first fiscal quarter ending December 31, 2010 are in, and Apple easily beat the Street. Revenue for the first quarter rose to $26.7 billion, with earnings per share at $6.43. Apple's gross margin, which is always quite high, was at 38.5%. Wall Street estimates were modeling $24.43 billion in revenue, and EPS of $5.40, with a gross profit margin of 27%. During the quarter, Apple sold 16.24 million iPhones, 7.33 million iPads, 4.13 million Macs and 19.45 million iPods. More news coming up shortly during our liveblog.
Apple's stock knocked down, but gets right back up
Wall Street was still reeling from Steve Jobs' medical leave this morning, with Apple stocks taking a beating as a result. Techcrunch reports that roughly $20 billion of Apple's market cap disappeared when the shares fell more than 20 points. But, $15 billion of that cap is back now, as investors apparently remembered that Apple's quarterly earnings call is today, and that always bodes good news for the company. Remember to join us at TUAW for a live discussion of the call when it begins at 2 PM PST/5 PM EST today.
Apple Q1 2011 earnings call today at 2:00 p.m. PST/5:00 p.m. EST
You can check the full Apple press release after the break but today's earnings call promises to be interesting on two fronts. First, for the past several years Apple has reported stellar sales in practically ever category, losing ground somewhat in the portable music player front to an extent, but showing steady growth in Mac sales and explosive growth in iPhone and iPad sales. We think the trend will continue. The question of Steve's health will no doubt be looming and will be a topic of conversation during the question and answer session at the end of the call. Yesterday's announcement sent Apple's stock tumbling in overseas markets and today, as of this writing, we're seeing AAPL down around 4%. That's actually not too bad considering the chatter about Steve being the sole visionary for the company. In terms of kneejerk market reactions, it could be much worse. We'll post the results and a wrap-up of the call later today. You can listen to the call here starting at 2 PM Pacific or 5 PM Eastern.
Bloggers and analysts predict Apple's Q1 2011 performance
Independent financial bloggers have traditionally been closer to the mark in predicting AAPL revenue and earnings than professional analysts, and one day away from the Apple earnings call, the differences are quite large -- about $2 billion dollars large. The professional analyst word on the street expects Apple to report earnings of US$5.38 per share for the first fiscal quarter of 2011, up from $3.67 per share for the same quarter last year. Revenue is expected to increase by a whopping 55 percent to $24.3 billion, with an increase in growth across the board on all Apple products except the iPod. This time the gap is the largest difference on record according to Fortune's Apple 2.0. In a survey of 10 amateurs and 44 professional analysts, the difference is quite dramatic. The consensus of the amateurs prognosticates that Apple will come in with revenues of $26.4 billion, a gap of $2.1 billion dollars or 8.6 percent. The difference in earnings per share (EPS) is even larger; it's forecasted by the bloggers as $1, or a full 18 percent higher than street estimates. Our old friend Gene Munster, senior analyst for Piper Jaffray, comes in on the low end, predicting that revenue will be reported to be $23.3 billion with an EPS of $5.06. It's not inconsequential to note: in light of Steve Jobs' medical leave of absence (get well soon, Steve), none of this has anything to do with Apple stock price tomorrow since I would expect the price to jump all over the place. This is despite German AAPL trading down 6 percent on the unfortunate news. A down opening of AAPL is expected by all, but by how much is anyone's guess. Please join us tomorrow at 5 PM Eastern for our live blog of the earnings call. Note: The author is an Apple shareholder, and this post should not be construed as financial advice.
Apple stock rises to over $342 intra-day
On a day where the Dow Jones Industrial Average is down by US$38.20 and the Nasdaq composite is nearly flat, once again, AAPL is bucking the trend and going straight up. At this writing, Apple stock is at $342.05, (a new intra-day high) and bouncing. So far the stock is up $5.93 or 1.76 percent on moderate volume. I'm sure that this is at least partially due to the anticipated Verizon (VZW) announcement tomorrow. Surprisingly enough, Verizon is about flat for the day, trading at $36.01 or up only $0.08 so far. If the Verizon announcement goes as we all hope, I can see this continuing, but who knows? So if you've got 'em, hold 'em.
Apple worth more than $300 billion, your first iPod barely pushing $20 on eBay
Remember when Apple edged past Microsoft in the market capitalization game, way back in 2010? We were young and innocent, and AAPL was only trading at $249.99 a share. Fast forward seven months and Apple has left Microsoft in the dust, with a share price at $329.75 that puts the company's market capitalization at more than $300 billion -- making it one of only two companies worth that much in the stock market's eyes. Naturally, market cap isn't the only game afoot -- Exxon Mobil still rules the top spot, and we can't think of the last time oil did any hard work revolutionizing device UI -- but it's a pretty nice mark for a little Cupertino firm that would've been called the tech industry underdog just a decade ago.
