It's early in Apple's 4th fiscal quarter. But in reviewing the June quarter results (the first quarter incorporating iPad revenue activity) certain revenue and earnings trends have already emerged.
Yesterday I published a primer titled Understanding Apple's Success Made Easy. I posted the content especially for readers who might not be financially inclined but are curious about Apple's continuing success. Using the June quarter results as an example, roughly $.20 of each revenue dollar flowed to Apple's bottom line. For the September quarter I expect Apple to improve ever-so-slightly on this ratio.
My expectation is based on an impressive quarter for iPhone sales as Apple continues the global rollout of the iPhone 4 and seeks to replenish channel inventory following the June quarter drawdown. Further, the Apple iPad continues to sell extraordinarily well, and will assist in boosting revenue growth to at least the 61.2% rate experienced in the June quarter.
In the fourth fiscal quarter of 2009 Apple reported adjusted revenue (after removing the impact of deferred revenue accounting for the iPhone) of $12.207 billion. Applying the June quarter's revenue growth rate, fourth fiscal quarter revenue would reach about $19.68 billion. I expect the year-over-year revenue growth to accelerate in the September quarter above the June quarter's pace. The revenue drivers are the iPhone 4 and the Apple iPad. For now I expect the growth in Mac unit sales to remain relatively consistent with the growth rates experienced in the first nine months of the fiscal year at about 33%. As revenue scales higher, operating expenses as a percentage of revenue should decline modestly, providing for a more than proportional gain in earnings from each additional revenue dollar received.
In the fourth fiscal quarter of 2009 Apple reported sales of 7.367 iPhone units. Although year-over-year iPhone unit sales grew 61% in the June quarter, the rate of unit sales growth in that quarter was well below the growth rates experienced in the first six months of the fiscal year. For now I expect iPhone unit shipments to grow in the September quarter at least 75% over the prior year, supply constraints being the only mitigating matter.
My early fourth fiscal quarter estimates call for revenue of about $20 billion and eps of at least $4.30 per share. I reiterate my forecast Apple's share price will move above $400 per share by early May 2011 and should surpass $300 per share within the next several weeks.
Robert Paul Leitao