My Take on Apple

Published: Monday, 16 Apr 2012 | 3:39 PM ET Text Size
By: Bob Pisani
CNBC Reporter

OK, I give up: everyone in the world has an opinion on Apple: here's mine.

The two anxieties about Apple [AAPL 582.0601 -23.1699 (-3.83%) ] are: 1) the parabolic stock price, up almost 50 percent, and 2) sales expectations are high.

I do have a problem when you have a stock with a 200-day moving average of $436 and a 50-day moving average of about $560 and it's trading at $590, I won't deny it. But what matters more are sales expectations.


AAPL is mostly about how many iPhones and iPads they can sell. Here's the breakdown of revenues:


Apple's Revenues
(% of 2012 Q1 revenues, rounded)

iPhone 53%
iPad 20%

Mac 14%

iPod 5%

Other 8%

Source: Apple



Sales expectations are high, but not unreasonable. Standard and Poor's, for example, estimates sales growth of 53 percent for the fiscal year ending in September. That's after rising 66 percent in FY 2011. This, with a market cap of $544 billion!

And the growth is in the right areas. Even as iPod sales fall off, sales of iPads are lifting off. They have 60 percent of the market in tablets; Gartner thinks their sales will DOUBLE this year. And no one is cutting estimates.

Same with iPhones: Apple had about 19 percent of the smartphone market in 2011. Credit Suisse thinks it will grow to 23 percent in 2012.

Also consider:

1) almost everyone believes that AAPL will gain or retain market share in iPhone, iPads, and even MacBooks;

2) iPhones are GAINING adherents in the enterprise space; more companies are supporting iPhone as company phones, at the expense of Blackberry

3) AAPL has one of the most loyal base of users you can imagine (I'm one). You can't say that about Google's [GOOG 603.702 -20.898 (-3.35%) ] Android. Or Microsoft [MSFT 31.1118 0.3018 (+0.98%) ]. Surveys consistently show that 90 percent or more of AAPL users will keep using. And buying. The iPhone 5 is coming in the second half.

4) The recently announced a dividend ($2.65 per share, or 1.8 percent dividend yield), which should attract an investor base well beyond the usual growth investors, into the value crowd.

OK smartypants, if AAPL is so great, why is it down today? There's clearly some broader tape issues at work, since it's been down five days in a row. Macro concerns are stronger.

For today, all the weakness in Apple came in the first twenty minutes; it's been stable since then.

Volume is heavy, and when I see other big tech names up (IBM, Intel, Micron, Microsoft, Oracle, EMC), this suggests that AAPL may be being used as a source of funds to buy other names that have not had anywhere near the technical runups AAPL has had.

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Top 5 Reasons Apple (AAPL) is Selling Off

Apple (Nasdaq: AAPL) has been selling-off the past five sessions faster than anything witnessed in the stock in at least six months. The dramatic fall has investors asking why.

Here are the top 5 likely reasons:

Profit taking- With shares up 58% YTD the stock has become a source of funds for taxes or other investments.

Earnings expectations are too high- Apple reports Q2 results on 4/24 and Street estimates have been creeping higher into the report. When analysts get too optimistic there is a fear that the company could disappoint. The Q2 consensus is $9.89, versus the company's guidance of $8.50.

Hedge fund rotation out of the stock- Apple has been a hedge fund hotel. It is said that popular hedgie Dan Loeb of Third Point Capital sold all of his position and maybe a lot of his buddies too.

Subsidy cuts- There is a growing sense that the carriers will take some power back after coughing up $700 per iPhone then selling them for $200 and eating the difference. Apple warned about the risk of this in the past.

Index rotation - While not likely, there is talk that Texas Instruments' (NYSE: TXN) addition into the Nasdaq 100 could force some selling of Apple to make room.

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Apple (AAPL) Will Likely Beat Q2 EPS Views, But Miss the Whisper Number


After taking a hard look at Apple's (Nasdaq: AAPL) EPS guidance, consensus and actual results over the past few quarters, it appears that while the company will beat the consensus when it reports next Tuesday, expectations which may have again gotten too high could lead to a miss on the whisper number.

Below are Apple's guidance, consensus, revised consensus and actual numbers since Tim Cook has been calling the shots. (Numbers in parentheses reflect percentage beat/miss over actual result.)

Q4:

Initial Apple EPS guidance = $5.50 (+28%)

Initial Street consensus = $6.42 (+10%)

Final Street consensus = $7.28 (-3%)

Actual EPS = $7.05

Q1:

Initial Apple EPS guidance = $9.30 (+49%)

Initial Street consensus = $8.98 (+54%)

Final Street consensus = $10.08 (+37%)

Actual EPS = $13.87

Q2 (4/24):

Initial Apple EPS guidance = $8.50

Initial Street consensus = $8.30

Final Street consensus = $9.99

Actual EPS = N/A

Besides the apparent "huge" beats versus the company’s internal guidance, looking deeper at the numbers reveals two things:

Apple has become less conservative with its guidance since Cook took over and Jobs passed. After being normally well below the Street with its guidance, Apple actually guided above the initial Street consensus during the past two quarters. This may be a Cook thing. The new exec may feel like the sandbagging should end as expectations for the company often get so lofty. Whatever the reason, it is important.

When analysts become too optimistic, there is a chance for a miss. A sharp move higher in the Street consensus over the fourth quarter can easily be seen -- a trend which likely resulted in the Apple miss. Although the consensus started 17 percent above the company's guidance, estimates moved up 13 percent during the quarter to about 32 percent above the internal guidance. This changed in the first quarter, however. The consensus started 4 percent below Apple's guidance and moved up 12 percent during the quarter to just 8 percent above the company’s guidance, consequently resulting in a huge beat. For the second quarter, the consensus started 2 percent below the guidance and moved up 20 percent during the quarter to about 17 percent above the company's guidance.

So what does this mean?

If Apple's fourth-quarter guidance had been more in-line with management's recent practice of setting expectations higher, the initial guidance could have been set at $6.61, or 3 percent above the initial consensus (the average of Q1 and Q2). That would have represented a beat of 7 percent during the quarter. Even with the company's first-quarter guidance set above the Street, strength from the iPhone 4S led to an earnings beat of about 49 percent. Taking an average of the hypothetical 7 percent beat from the fourth quarter and real 49 percent beat from the first quarter equates to a beat rate of 28 percent above the company's internal guidance. Applying the 28 percent beat rate (which seems solid as this is the percentage Apple's fourth-quarter topped its own guidance in Q4) to the Q2 guidance of may suggest Q2 EPS results of around $10.88, about 9 percent above the current consensus of $9.99.

The question is – 'Will it be enough'?

Probably not. Data from StreetInsider.com's EPS Insider shows that Apple has beaten the consensus by an average of 22 percent over the past four quarters... So the real whisper number going into the quarter is around $12. Apple could miss this.

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Trend is our Friend......

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JRun: 昨天和小姑娘吃饭，谈到微博粉丝，说是每个十万人粉丝以上的，都是靠转发微博赚钱的。

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JRun: 昨天和小姑娘吃饭，谈到微博粉丝，说是每个十万人粉丝以上的，都是靠转发微博赚钱的。

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JRun: 昨天和小姑娘吃饭，谈到微博粉丝，说是每个十万人粉丝以上的，都是靠转发微博赚钱的。

http://ilab.cc/news/5888.html

创造力没有了？乔布斯之后的苹果真是一滩烂泥啊。

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JRun: 昨天和小姑娘吃饭，谈到微博粉丝，说是每个十万人粉丝以上的，都是靠转发微博赚钱的。

http://www.engadget.com/2012/08/08/leno ... announced/

没有了教主的日子，烂苹果会越来越难过。

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JRun: 昨天和小姑娘吃饭，谈到微博粉丝，说是每个十万人粉丝以上的，都是靠转发微博赚钱的。

不是说教主的pipeline够用好几年吗?

从教主重病算起，也有好几年了。

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JRun: 昨天和小姑娘吃饭，谈到微博粉丝，说是每个十万人粉丝以上的，都是靠转发微博赚钱的。