Saturday, July 17, 2010

AAPL June Quarter Estimates In Detail

The past month has been unbelievably busy at work leaving little time to post or even second guess my AAPL June quarter estimates. Perhaps that's a good thing. My June quarter estimates are based in part on averages and ratios sourced from Apple's most recent quarterly results. For the June quarter, ratios are slightly weighted in favor of the December quarter performance due to the anticipated record revenue from the success of the Apple iPad. 
My June quarter estimates anticipate both record revenue for Apple and record earnings per share. Although I expect record revenue, I did not scale down certain expense ratios relative to revenue as might be realized in better economic times. No doubt there are also costs related to the rollout of the Apple iPad.  Still, I maintained a gross margin estimate below that of the 2nd fiscal quarter but inline with recent trends. 
My forecast of over $16 billion in revenue is influenced by the release of the Apple iPad (obviously) and anticipated growth in iTunes store sales from the proliferation of iOS devices. The estimates are also favorably impacted by expected strong sales of "beyond the box" products and services such as MobileMe and AppleCare. Although strong revenue growth is mostly influenced by hardware device unit sales, revenue from constituent and ancillary products and services benefit gross margins.
Below are my detailed estimates for Apple's June quarter. Unit sales by product line, gross revenue, gross margin and eps calculations have been provided to Philip Elmer-DeWitt for use in his Apple 2.0 quarterly analyst comparisons:
$4.4288 Billion (Macs) - 3.46 million units
$5.9247 Billion (iPhone) - 9.4 million units
$1.4720 Billion (iPod) - 9.2 million units
$2.2275 Billion (iPad)
$2.3800 Billion (iTunes/Other)
$16.433 Revenue Total
$9.7776 Billion (GOGS)  - GM 40.5%
$6.6554 Billion (Gross Margin)
$0.4601 Billion (R&D)
$1.4379 Billion (GS&A)
$4.7574 Billion (Operating Income)
$0.0600 Billion (Other Income)
$4.8174 Billion (Income Before Taxes)
$1.3730 Billion (Provision for Taxes) - 28.5%
$3.4444 Billion (Net Income)
$3.71 Earnings Per Share
928,415,000 Fully Diluted Shares Used In Computation

Robert Paul Leitao


  1. Will AAPL hit $300 a share soon after June Quarter Earnings ?

  2. Anonymous:

    That's a good question. Two things are currently pressuring AAPL's performance: The iPhone 4 issue (which may have been satisfactorily resolved on Friday) and the overall condition of the market.

    In my view Apple will eventually surpass $300 per share. The timing is the question. If Apple comes close to my estimate of $3.71 eps in the June quarter I expect the share price to move sharply higher and move above $280 within weeks.

    Movement above $300 per share will be contingent on the strength of the overall market as well as strong iPad and iPhone 4 sales in the early weeks of the September quarter.

    I believe the iPhone antenna issue (real or imagined) has cost AAPL its upward momentum. Tuesday's earnings report will determine how quickly momentum is regained.