FY2015: Apple's Big Adventure

On Friday, November 28th, Apple’s share price closed the month’s trading at $118.93, up 9.9% from the opening price on November 3rd and up nearly 10.5% from the opening price on September 29th, the first trading day of the fiscal year. 

Recent analyst revenue upgrades and price target revisions have provided support for the share price. The current Wall Street consensus revenue estimate for the December quarter is $66.23 billion compared to management’s revenue guidance for the quarter of between $63.5 billion and $66.5 billion. However, the current revenue consensus estimate for FY2015 remains a decidedly conservative $210.68 billion and for FY2016 the revenue consensus estimate is a surprisingly low $223.02 billion.

In contrast, my revenue models suggest Apple may reach one-quarter trillion dollars in revenue in FY2016 following a revenue performance this fiscal year of $225 billion.

On November 19th Morgan Stanley’s Katy Huberty raised her firm’s price target from $115 to $126. She stated investors underestimate demand for the Apple Watch and is forecasting 30 million Apple Watches will be sold in CY2015. She also believes institutions remain underweighted in Apple shares. In my view, increasing institutional demand for shares will buoy the share price during the first six months of the current fiscal year.

On November 25th Aaron Rakers at Stifel Nicolaus raised his Apple price target to $130 from $115. On the same day Brian Blair reiterated his firm’s view iPhone unit sales will range between 72 million and 75 million in the December quarter. Although the share price may not go higher in a straight line, I expect a continuing series of analyst estimate revisions over the next several weeks to support the share price into Apple’s December quarter earnings release in late January. 

Looking Back

Although unit sales expectations for Apple’s iPhone 6 handsets are moving higher with strong evidence of a big market share shift in the high-end smartphone market from competitors to Apple, most analysts remain cautious on their FY2015 revenue and earnings per share estimates. 

The graph below illustrates Apple’s revenue mix for the fiscal year ended in September. In the 12-month period, the iPhone represented just over 55% of reported revenue. Combined, the iPhone and iPad lines represented over 72% of revenue in the period.

Apple’s Success Is In The Sensational And The Subtle

On Friday, August 29th, Apple’s share price ended the month’s trading at an all-time closing high of $102.50 after setting an all-time trading high of $102.90 earlier in the day’s session. For the month of August, the share price rose about 8% from the opening price of $94.90 on August 1, 2014. Since Apple announced the return to profit growth following the close of trading on April 23, 2014, the share price has risen about 37%. 

At Friday’s closing price, the company’s market capitalization stands at about $614 billion dollars. Because of the ongoing $90 billion share repurchase program and despite the recent all-time highs, the company’s market cap remains below the record levels set in late September 2012 and institutional ownership remains at a curiously low 62% of outstanding shares. 

No matter the dramatic rise in the share price over the past four months, opportunities remain for long-term shareholders to be richly rewarded over the next several quarters. 

Apple’s September 9th Event

There’s no shortage of rumors and speculation concerning what products and services Apple will choose to announce at the upcoming September 9th event. There’s very little doubt Apple will announce the next iteration of the company’s popular line of smartphones and expectations are high Apple will also announce its foray into mobile payments as well as new services to complement the much-anticipated iWatch line of accessories. 

Various reports from component suppliers suggest Apple will produce record numbers of iPhones, with larger screen sizes, to accommodate what is predicted to be unprecedented demand for the new handsets and demand on a scale that may prove to be high even by lofty iPhone standards. But the fact of the matter is it would actually be worrisome if demand for the new iPhone handsets didn’t break all previous records by a proverbial country mile. 

Apple’s Dependence On iOS Devices

The graph below illustrates Apple’s reliance on the iPhone and iPad product lines for revenue and revenue growth. Since the June quarter (FQ3) of FY2011, the iPhone and iPad lines have contributed at least 60% of Apple’s reported revenue. In seven of the most recent fifteen quarters, the iPhone and iPad lines have contributed at least 70% of Apple’s reported revenue total.

The graph below delineates the revenue performance of the iPhone and iPad lines over the most recent fifteen quarters. Against a backdrop of 5.42% aggregate revenue growth in the first three quarters of the current fiscal year, iPhone revenue rose 9.12% to $78.313 billion while iPad revenue fell 3.21% to $24.967 billion. Combined, the two product lines delivered $103.280 billion or 73.42% of the $140.672 billion in reported revenue in the nine-month period. As Apple determines the best path forward for growth in iPad unit sales, the iPhone line is and will remain Apple’s primary revenue growth driver.

Apple’s Newfound Glory

On Wednesday, April 23rd, Apple triumphantly surprised the market with a return to net income growth in the March quarter following a four-quarter cycle of declining profitability. Although Apple did not set a record for March quarter net income, the company delivered record March quarter revenue and an impressive 22.40% of revenue to the net income line.

The graph below illustrates Apple’s net income performance and the percentage of revenue that has flowed to the net income line over the most recent eighteen quarters. 

On revenue of $45.646 billion, $10.223 billion flowed to the net income line. This was the fifth-highest net income performance in the company’s history and second-highest March quarter net income performance, eclipsed only by the results in the March quarter of FY2012. 

Stock Split and Expanded Share repurchase Program

With the release of March quarter results Apple also announced a 7-for-1 stock split. The likelihood Apple will be added to the Dow Jones Industrial Average (DJIA) after the completion of the stock split in early June added fuel to the immediate post-earnings share price rally. Following the release of the company’s March quarter numbers and accompanying announcements, the share price jumped from a closing price on Wednesday of $524.75 to end the trading week at $571.94. With a current market cap of over one-half trillion dollars, rising revenue, rising quarterly dividends and anticipated fiscal year revenue of over $180 billion, the addition of Apple to the well-known index is viewed as a near certainty after completion of the 7-for-1 stock split.

Apple is increasing its share repurchase program from $60 billion to $90 billion with all purchases to be completed by the end of calendar year 2015. As of the close of the March quarter, Apple had utilized $45.9 billion of the previously authorized $60 billion for repurchases.

The graph below illustrates the dramatic drop in the company’s reported fully diluted share count over the past several quarters.

Management also announced with the March quarter results the company would be returning to the debt table to borrow against the company’s massive overseas holdings of cash and marketable securities. Although Apple reports a US tax expense on all foreign-sourced earnings not permanently dedicated for use outside the US, the payments are not due until the funds are repatriated. As of March 29, 2014, Apple has $19.471 billion in deferred tax liabilities on the balance sheet and $17.0 billion in previously acquired debt for share repurchases.

Apple's iPhone Paradox

On Monday, September 23rd, Apple announced the company had sold more than nine million 5c and 5s handsets in the first weekend of sales. The surprisingly high unit sales number for Apple's newest iPhone handsets caused analysts to rewrite and reconsider their narratives on Apple's prospects for early success.  Speculation turned to talk of high channel supply of the iPhone 5c as the source of the expectedly high unit sales number. Analysts had previously cautioned Apple's apparent unwillingness to release a lower-cost handset for emerging markets would dampen the sales growth potential of the new models. 

Confusing matters even more, on September 23rd Apple filed a Form 8-K reiterating revenue and gross margin guidance for the September quarter and indicating revenue would be near the top end of the revenue guidance range of $34 billion to $37 billion and gross margin would be near the top end of the guidance range of 36% to 37%.

The Issue of iPhone Channel Supply

Apple ended the June quarter with about 11 million iPhone handsets in the global channel while also reporting an increase in component supplies. In the June quarter iPhone sell-through was greater than reported unit sales because Apple reduced channel supply in the quarter from about 11.6 million units at the end of the March quarter. In other words, more iPhones were sold to end users in the June quarter than Apple reported as unit sales. 

In the September quarter one year ago, Apple reported ending channel supply of 9.1 million units. At the time, iPhone 5 supplies were constrained and ending channel supply was below the desired range of 4 to 6 weeks of supply on a look-forward basis. 

Because Apple chose to replace the iPhone 5 after its one year in the market with two new models, the global channel could absorb as many of the new handsets as Apple could deliver. There's no issue with high iPhone 5c handsets shipments. Apple has always reported as units sold shipments to resellers when ownership of the devices change hands, not when those handsets are sold by resellers to consumers. Additionally, the iPhone 5c is sold in five different colors. This necessitates more product in the market as sales begin.

Apple's iPhone Paradox

Selling more than nine million new handsets while reiterating September quarter revenue guidance with millions of 5c handsets awaiting sales to customers might create an apparent paradox. But there's no mystery or conflict in the numbers. Apple's decision to focus its new handset efforts on the top tiers of the smartphone market and forego an aggressive effort to gain market share in emerging markets at this time is in line with Apple's approach to the company's primary product markets.

The graph below illustrates Apple's revenue mix over the first three quarters of FY2013:

iPhone revenue represented 53.8% of the company's reported revenue total over this 39-week period that ended in late June. In FY2012, iPhone revenue represented 50.3% of the company's reported revenue total. In the first three quarters of the fiscal year, iPhone revenue rose15.7% versus 10.7% revenue growth for the company as a whole. In FY2013 which ended on September 28th, revenue from iPhone sales may have reached 55% or more of Apple's revenue total. The iPhone remains Apple's principal revenue and operating income driver. Emerging markets can wait for now as Apple seeks gross margin recovery and a return to net income growth. 

Apple's Long And Winding Road

There's no question Apple faces big challenges in the months ahead. Apple's reported revenue of $98.115 billion in the first six months of the current fiscal year represents a year-over-year revenue growth rate of 14.73%, well off the 66.35% revenue growth rate in the first six months of the prior fiscal year. 

Additionally, Apple's revenue growth reliance on the iPhone and iPad lines is creating challenges in light of the success of the Pad mini and the corresponding drop in average selling prices for the line. In this article I will explore the factors that have compromised Apple's recent rates of growth and the opportunities available to the company as it continues on a long and winding road of recovery. 

Apple's Current Revenue Mix

Over the first six months of the current fiscal year nearly 75% of Apple's reported revenue was sourced from the iPhone and iPad lines. The chart below illustrate the high concentration of revenue in Apple's two most popular device lines. 

It's interesting to note Apple's recently recast iTunes/Software/Services revenue segment now delivers more recognized revenue than the iPod device line and the Accessories revenue segment combined. The Macintosh line represented 11.2% of revenue in the first six months of the current fiscal year versus 14.8% of revenue in fiscal year FY2012 that ended in September. 

The chart below illustrates the rates of revenue growth for each of Apple's revenue segments for the six-month period ended in March. 

In the first two quarters of the current fiscal year, iPad revenue rose 29.18% on a 55.47% rise in units sales to 42.337 million units. The iTunes/Software/Services segment was Apple's second-fastest growing segment with a 26.01% growth rate to $7.801 billion. 

Negative revenue growth delivered by both the iPod and Mac lines in the first half of FY2013 contributed to the rising revenue dependency on the iPhone and iPad lines for aggregate revenue growth for the company. 

Apple: There And Back Again

On April 23rd, Apple released the company's results for its second fiscal quarter of 2013. Reported revenue of $43.60 billion represented a March quarter record and the third highest quarterly revenue performance in the company's stored history. However, March quarter earnings per share fell to $10.09, down 18% year-over-year. In today's article I will review Apple's March quarter performance, the recently announced cash distribution plan and the ways in which Apple is setting a firm foundation for future growth. 

Apple: There and Back Again

The graphs below illustrate Apple's recent rates of revenue and earnings per share growth compared with the quarterly rates of growth since the first quarter of FY2010.

In the March-ending period, Apple reported its slowest rate of quarterly revenue growth in years. Since the third quarter of FY2012, quarterly revenue growth has slowed to a pace last seen in FY2009 and the peak of the Great Recession. In the March quarter, Greater China, previously Apple's fastest-growing revenue region, reported only 7.54% revenue growth. That was below the 11.27% revenue growth for the company as a whole. For the current June quarter, Apple has guided to revenue of between $33.5 billion and $35.5 billion and hinted at the possibility of a negative revenue growth quarter. In the June quarter one-year ago, Apple reported revenue of $35.023 billion.

Despite the fact Apple will almost certainly report yet another successive year of record revenue, the company's performance is overshadowed by expectations of flat earnings growth this fiscal year and present-day market preoccupation with the company's massive amounts of cash.

In the March quarter, Apple reported its second consecutive negative eps growth quarter and its first negative net income growth quarter in years. In the recent December quarter, earnings per share fell 0.4% with a modest $14 million rise in net income. In the March quarter, earnings per share fell 17.9% to $10.09 from $12.30 in the prior-year period with a corresponding drop in net income of $2.075 billion. 

Apple has returned from a three-year cycle of extraordinary rates of revenue and earnings growth following the Great Recession that was fueled by strong geographic expansion, the introduction of the iPad and fast rates of growth in the global smartphone market. This is an end to a chapter, not the end of Apple's long-term growth story. 

Apple, iOS Devices and the Precipice of Success

On August 11th, I published my updated AAPL 12-month price target of $950 per share. Since that date, AAPL has moved from $620.73 to $700.09 per share. On Friday the shares set an all-time intraday high of $705.07 as the rollout of the iPhone 5 began in the US and select markets around the globe. Apple's newest iPhone handset is an early and unqualified success. 

I've mentioned several times in prior articles I expect the iPhone 5 to sell on a scale not seen before even by iPhone standards. Apple's early September announcement of a September 12th iPhone event essentially froze the domestic smartphone market while competitors scrambled to ship product to carriers before the iPhone 5's release on September 21st. Through at least the holiday quarter, there isn't a competing handset on the market that will generate anywhere near the iPhone 5's global appeal. 

In addition to the release of the iPhone 5, the iPhone 4 is now available on AT&T, Sprint and Verizon at a post-subsidy price of $0. This is the first time all three major domestic carriers have an iPhone available at that pre-tax price. The iPhone 4 at its new price will deliver a boost to unit sales over the next four fiscal quarters. 

Just prior to the iPhone 5's retail availability, Apple released iOS 6, the company's latest iteration of its operating system for the iPhone, iPad and iPod touch. No matter the early complaints about Apple's first major effort at mapping services, iOS 6 downloads and installations can be counted by the tens of millions. With all of the attention lavished on the iPhone 5, it's the iPhone and iPad combined that is driving the company's share price and market cap significantly higher.

iOS Devices As A Global Franchise

At my Posts At Eventide web presence I provide graphs and table data illustrating and detailing unit sales by quarter for each of Apple's major product lines. Today I am publishing a chart-based overview of iPhone and iPad sales to illustrate Apple's high rates of revenue and earnings growth depend on more than the iPhone alone. iOS devices have become a global franchise. Because Apple does not break out the unit sales of the iOS-based iPod touch, I am including only the iPhone and iPad product lines in today's analysis. 

The graph below illustrates the growth in iPhone and iPad sales over an eleven-quarter period beginning with the first quarter of FY2010 (fourth calendar quarter of 2009):

From a low of 8.737 million iPhone units sold in FQ1 2010 prior to the original iPad's release, to a high of 52.478 million iPhone and iPad units sold two years later in FQ1 2012, in seven of the eleven quarters covered, year-over-year unit sales growth reached or exceeded 100%. The accompanying table data is available at Posts At Eventide through the link posted above.

Apple's Revenue Growth: A Dual-Track Bullet Train

Apple is unique among the world's mega caps due in part to the company's extraordinary rates of revenue growth and extraordinary rates of revenue growth matched with consistently high gross margin. Over the most recent six fiscal years, Apple's recognized revenue rose nearly sixfold and earnings per share rose more than twelvefold. In the first six months of the current fiscal year alone, Apple's revenue rose 66.35% to $85.52 billion and eps rose 104% to $26.17 per share. 

At Friday's closing price of $574.13, the shares are trading at a conservative 14 times trailing 12-month earnings of $41.04 with more than $115 in cash standing behind each outstanding share. For investors, understanding Apple's potential for continuing strong growth is at least as important as an appreciation for the company's growth performance over the past six and one-half years. At Friday's closing price and lowly earnings valuation, the market is discounting Apple's continuing growth potential. 

Apple: A Dual-Track Bullet Train

There's no disputing the fact Apple designs and markets some of the world's most sought after consumer products. But Apple's success is driven by more than smart product designs and technological innovation. Relentless geographic expansion is an important catalyst for the company's fast rates of growth. If Apple were a bullet train, it would be a bullet train powered by two parallel tracks. The first track is exceptional product design and the consequential product popularity. The second track is expansion of product sales into new and emerging markets. 

On December 4, 2011, I published an article titled Where Apple Makes Its Money. In that article I looked at Apple's revenue by region for the fiscal year that ended last September. In this article I'm presenting Apple's revenue growth by region for the first six months of the company's current fiscal year. 

Apple's Expanding Global Presence

Apple is now the world's largest distributor of music, a global bricks and mortar retailer and has more than 400 million iTunes customers around the world with online accounts backed by credit cards. By the end of the month iTunes-based app stores will be available to consumers in 155 countries and Apple's fastest rates of revenue growth are occurring in regions outside the United States. 

The chart below illustrates the percentage of revenue contributed by each of Apple's geographic revenue segments during the first six months of the fiscal year that ends on September 29, 2012: 

Apple: March Quarter Expectations After Record FQ1 Results

On Tuesday Apple announced record quarterly revenue of $46.333 billion and record eps of $13.87 in the December quarter. The 73.2% rise in revenue and 115.7% rise in earnings per share were fueled by strong domestic demand for iPhones, iPads and Macintosh personal computers and by gross margin in the quarter of 44.7%.

In announcing the company's FQ1 results for the 14-week period, Apple offered revenue guidance of $32.5 billion for the 13-week quarter ending March 31, 2012 and earnings guidance of $8.50 per share. Management's guidance suggests revenue growth of 31.75% and eps growth of 32.8%. Once again, Apple's guidance will be proven decidedly conservative. 

December Quarter Revenue Growth Recap

Apple's 73.2% revenue growth in the December quarter was aided by a 14-week fiscal period encompassing the immediate post-Christmas shopping week and extraordinary revenue growth in Apple's Americas region, exclusive of the company's retail stores. The Americas delivered 92% revenue growth to $17.714 billion, representing 38.2% of total reported revenue on strong sales of the Apple iPhone 4S. 

Despite the well publicized economic problems in Europe, the region turned in a strong revenue growth rate of 55% for the quarter. Apple's Asia-Pacific region, absent the release of the iPhone 4S through an authorized carrier on China's mainland, turned in a respectable 54% revenue growth rate. The Asia-Pacific region will be the catalyst for robust revenue and earnings growth in the March quarter.

On To The March Quarter

In a recent article titled Where Apple Makes Its Money, I suggested the Asia-Pacific region will surpass Europe as Apple's second biggest revenue region this fiscal year. In FY2011, China was the only country outside the US to deliver more than 10% of Apple's reported revenue total. The release of the iPhone 4S on China's mainland in the March quarter will generate greater than 100% revenue growth in the Asia-Pacific region in this three-month period. 

The Apple iPhone

In the December quarter Apple defied skeptics who questioned the company's ability to ramp iPhone supply to meet demand. In the holiday quarter iPhone unit sales rose 128% to 37.044 million units and handset sales revenue, inclusive of accessories and related products, rose 133% to $24.417 billion or 52.7% of the company's total reported revenue. In the March quarter, the rate of iPhone unit sales growth may again reach triple digits due to the China iPhone 4S rollout and the company's proven ability to meet demand for product. At the end of the December quarter, the iPhone's global channel supply of about 6 million units represented less than three weeks of December quarter sales and was well below the targeted range of 4 to 6 weeks of supply. 

In addition to the expected strong iPhone sell-through in the March quarter, Apple can add millions of units to channel supply before the end of the period and in support of the continuing global roll out of the iPhone 4S handset. For the March quarter, I'm targeting iPhone unit sales of 36 million units. 

The Apple iPad

In FQ1, Apple sold 15.434 million iPad units and sell-through was slightly higher than reported sales. This represented 111% unit sales growth even as consumer expectations for a product line refresh to occur in the March quarter continue to grow. During the conference call with analysts following Tuesday's earnings release, management mentioned the iPad's fast adoption in the education market. With the prospect of the iPad 3's release in the March quarter and the chance the iPad 2 will remain a shipping product, Apple could deliver in the area of 200% iPad unit sales growth in this fiscal period. Education channel sales will be an iPad unit sales growth catalyst in the upcoming June quarter.

The Macintosh

The Mac's unit sales performance exemplifies the "Apple product mutual halo effect." Record Apple retail store traffic following the release of the iPhone 4S in October assisted in boosting December quarter Mac unit sales 26% to 5.198 million units. In the Asia-Pacific region Mac unit sales rose 58%. I expect March quarter Mac unit sales of about 4.7 million. Both the Asia-Pacific region and the Apple retail segment will be unit sales growth leaders in this three-month period. 

For The March Quarter

My preliminary March quarter revenue estimate stands at $41 billion, representing anticipated revenue growth of 66% and an earnings per share growth rate of about 80% to $11.50. Apple's guidance for the quarter of $32.5 billion in revenue and eps of $8.50 is consistently conservative. I currently expect Apple to beat guidance by $3 per share.

On The Fiscal Year

For the fiscal year ending in late September, I now expect revenue exceeding $175 billion and earnings per exceeding $50. FY2013 is on track to be a more than one-quarter trillion dollar revenue year. Over the next two weeks I will be updating my current 12-month price target of $640. I expect the updated price target to land in the vicinity of $700 per share. 

Apple's Earnings Quality

Apple's gross margin in the December quarter reached 44.7% and net income reached nearly 28.2% of revenue.  I expect gross margin and the percentage of revenue that flows to the net income line to remain high through the March and June fiscal quarters due to the continuing global roll out of the iPhone 4S handset. For as long as revenue growth rates remain greater than 50%, the percentage of revenue consumed by operating expenses will continue to decline. In the December quarter operating expenses came in at $3.363 billion or just above 7.25% of reported revenue. The declining percentage of revenue consumed by operating expenses contributed to the very strong net income growth in the quarter and will contribute to extraordinarily high net income growth rates this fiscal year. 

Robert Paul Leitao

Disclosure: The author is long Apple shares

Apple's First $100 Billion Year

During the twelve months that ended in late June, Apple reached an important milestone. It was the first 12-month period in which the company's reported revenue exceeded $100 billion. Apple's fiscal year ends in late September, but the trends revealed in the four fiscal quarters that ended in late June provide important insights into the company's current rates of revenue growth and the dynamic nature of Apple's revenue mix.

In the four fiscal quarters ended in late June, the company reported revenue of $100.322 billion, a year-over-year increase of 75.73%. In this four-quarter period the Apple iPhone and the Apple iPad represented 60.98% of revenue and 88% of the $43.233 in revenue growth over the corresponding prior year four-quarter period. 

The Impact of the Apple iPhone and Apple iPad

The iPad's sales presence in all four quarters of this twelve-month period significantly boosted revenue growth. However, iPhone revenue growth of $23.936 billion exceeded total iPad revenue of $16.282 billion during the four fiscal quarters. The iPhone's particularly strong June quarter performance was due in part to Apple's decision to handle this year's iPhone transition on a different timetable than in the past.

The iPhone remains Apple's flagship product and is the primary catalyst for Apple's frenetic rates of revenue growth. Apple's decision to push the transition to the iPhone 5 well beyond the start of the September quarter has merit provided sufficient product supplies are available at the time of the product's release.

The graph and table data below illustrate and delineate the sources of revenue in this four-quarter period that fueled the 75.73% rate of revenue growth and the revenue total that topped $100 billion.

Posts At Eventide AAPL FQ2 Estimates

Posts At Eventide AAPL FQ2 Estimates

As an independent AAPL analyst and moderator of the Apple Finance Board I've witnessed the continuing transformation of Apple from primarily a one product company at the beginning of this millennium to a newly claimed position as a global technology leader offering an array of popular and award-winning products. 

My estimates rely heavily on Apple's recent quarterly results and I actively track trends that emerge on a rolling basis over the most recent eight fiscal quarters. For more information on the data I compile and the results I track, please see the Posts At Eventide Resource Guide.

FQ2 Revenue and Earnings Estimates

For the March quarter my models forecast revenue of $25.256 billion and earnings per share of $6.30. This represents anticipated revenue growth of 87% over the prior-year period and eps growth of 89%.

This extraordinary pace of revenue growth is due in part to an accelerating rate of iPhone unit sales boosted by the iPhone on the Verizon network and a lessening of iPhone supply constraints. In the March quarter I anticipate revenue growth from iPhone unit sales to be greater than the total revenue generated from iPad unit sales activity.

In year-over-year comparisons I expect a slight reduction in gross margins. Apple has become more aggressive on product pricing in pursuit of increasing unit sales. iOS-based devices (the iPhone, iPad and iPod touch) are designed to deliver post-purchase revenue activity over the economic life of each unit sold. Offsetting the moderation in gross margins is the reduction of operating expenses relative to revenue. For the second consecutive quarter I anticipate operating expenses consuming less than 10% of reported revenue. For an analysis of the growth in operating expenses relative to growth in revenue, please see my February post titled Apple's SG&A Expenses Versus Revenue. 

Posts At Eventide FQ2 AAPL Estimates

	Revenue Segment	Units FQ2 '11	Units FQ2 ’10	Unit Growth	FQ2 Revenue
	Macintosh	3,625,000	2,943,000	23.2%	4,585,625,000
	iPhone	18,125,000	8,752,000	107.1%	11,563,750,000
	iPod	10,000,000	10,885,000	-8.1%	1,800,000,000
	iPad	6,750,000	N/A	100%	4,320,000,000
	Peripherals				565,000,000
	Software, Services				762,500,000
	Other Music				1,658,750,000
	Revenue Total				25,255,625,000
	Cost of Sales	60.2%			-15,203,886,250
	Gross Margin	39.8%			10,051,738,750
	Operating Expenses	9.5%			-2,400,000,000
	Operating Income	30.3%			7,651,738,750
	Other Income				125,000,000
	Income Before Taxes				7,776,738,750
	Provision For Taxes	24%			-1,866,417,300
	Net Income	23.4%			5,910,321,450
	Earnings Per Share	937,503,000	Shares		6.30