Posts At Eventide FQ1 AAPL Estimates

Posts At Eventide AAPL FQ1 Estimates

As an independent analyst and moderator of the Apple Finance Board I enjoy the opportunity to prepare estimates of Apple's anticipated performance on a quarterly basis.

My estimates rely heavily on Apple's recent quarterly results and I actively track trends that emerge over the most recent eight-quarter periods. For more information on the quarterly data I compile and the results I track, please see the Posts At Eventide Resource Guide for Independent AAPL Analysts. 

FQ1 Revenue and Earnings Estimates

For the December quarter my models forecast revenue of $26.425 billion and earnings per share of $6.27. This represents anticipated revenue growth of 68% over the prior-year period and eps growth of 70.8%.

I expect eps growth to slightly exceed revenue growth in the quarter due to lower tax rates and a drop in operating expenses relative to revenue. For a comparison of the rates of growth in Apple's revenue and operating expenses, please see my recent blog post titled Apple: Revenue Growth vs. Growth in Operating Expenses. The drop in tax rates and the drop in operating expenses relative to revenue will mitigate the impact of lower gross margins in the quarter versus the prior-year period. 

Apple has become more aggressive on product pricing relative to manufacturing costs. It's my view the moderation in gross margins seen in FY2010 and expected in the December quarter is intended to gain market share through higher unit sales and promote growth in post-purchase revenue from the sales of apps and digital content. The more units sold, the greater the growth in post-purchase revenue. 

Apple's Dynamic Revenue Mix

In late October I published blog post titled Apple's FY2010: A Retrospective. In that post I illustrated the contributions of each of Apple's revenue segments to the company's overall results. In the December quarter and throughout FY2011 the Apple iPad will continue to dramatically change the percentage of revenue contributions from each of Apple's major product lines. I estimate in the December quarter the Apple iPad will represent about 17% of Apple's reported revenue and represent almost 42% of the quarter's estimated growth in revenue. 

The AFB AAPL FQ1 Estimate Index

The AFB AAPL FQ1 Estimate Index

The active members of the Apple Finance Board are best described as an assemblage of talented individuals with colorful personalities. They are outspoken, hardworking and focused on understanding everything there is to know about Apple and the company's financial performance.

As a service to the members of the AFB, a popular and well respected discussion board, I'm hosting the estimates for Apple's first fiscal quarter results developed by the members here at Posts At Eventide.  As the host of the index and commentator on the members and their entries, I'll be publishing my quarterly estimates in a separate blog post at Eventide before the end of the weekend. 

For many of the AFB members who submitted quarterly estimates for this index, it's their first effort at developing numbers for publication. However, newness to making public estimates belies years of studying Apple as a company and years of familiarity with Apple's popular consumer products. 

The average estimate of the 15 AFB members participating in the FQ1 index indicates expected revenue of $26.581 billion and earnings per share of $6.24. This is in contrast to the current Wall Street consensus of $24.12 billion in revenue and eps of $5.29. 

Knowing the active members of the AFB from years of moderating the board, it's a pleasure to host the FQ1 index at this Web presence. 

Comments on the index can be made below and for registered members of the AFB in the topic created specifically for this discussion. 

Robert Paul Leitao


Updated 01/08/10 to add final estimates from AFB members

The AFB AAPL FQ1 Estimate Index:

		Gross		Other	Income
Member Name	Revenue	Margin	OpEx	Income	Before Taxes	Tax Expense	Net Income	EPS
Nagrani	29,038	10,889	2,500		8,389	2,055	6,334	6.79
macorange	27,320						6,010	6.43
AHHA	25,801	9,804	2,200	25	7,629	1,640	5,989	6.43
JohnG	26,550							6.41
Tetrachloride	26,450							6.40
Gregg Thurman	26,981	10,306	2,482	60	7,884	1,932	5,952	6.38
awcabot	27,224	10,376	2,525	16	7,867	1,951	5,915	6.33
cdodge	27,215	9,988	2,521	25	7,487	1,572	5,915	6.33
pats	27,077	10,154	2,395	65	7,823	1,955	5,868	6.30
westech	26,975	10,251	2,500	60	7,811	1,835	5,975	6.29
ChasMac77	26,715						5,824	6.24
deagol	26,071	9,917	2,366	64	7,614	1,789	5,825	6.23
MichelC	26,732	10,158	2,500	36	7,694	1,924	5,735	6.14
CdnPhoto	25,462	10,312	2,300	65	8,077	2,359	5,718	6.12
Red Shirted Ensign	25,500	9,792	2,682		7,110			6.09
Mercel	25,987	9,719	2,400	25	7,344	1,689	5,655	6.05
snoozzzer	25,290	9,610	2,500	75	7,185	1,688	5,496	5.89
mbeauch	25,663	9,495	2,500	75	7,070	1,768	5,303	5.67
Average	26,558	10,055	2,455	49	7,642	1,858	5,834	6.25

Numbers are in millions except earnings per share.