The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
AAPL Up On Good News From Tech Ahead Of Earnings
Solid earnings and outlooks from a trio of major technology companies, including Intel, renewed optimism about corporate profits and the economic recovery and buoyed the market in early trading. Shares of AAPL are following suit, up about 1.8%. Upcoming catalysts for the stock include second fiscal quarter results TONIGHT at 5:00 p.m ET; any update regarding Steve Jobs‘ healthy return; the WWDC starting June 6; monthly NPD data to gauge Mac / iPod businesses (see below); iPad sales updates; iPhone sales updates, the push in China, as well as the launch of the iPhone 5; the continued evolution and adoption of Apple TV; and new initiatives such as video, cloud computing (iTunes), books / publishing and social (Ping). Shares of Apple trade at 12x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).Join SAI For LIVE Coverage Of Apple Earnings (Business Insider)
For the most up to date coverage, join us tonight for the release, conference call and related commentary and analysis.
Last Minute Update From Wall Street (Various)
Analysts are expecting another solid quarter. The Street is looking for revenue of $23.3 billion (above guidance of $22 billion) with EPS of $5.35 (above guidance of $4.90):
- Scott Sutherland at Wedbush Securities expects that solid iPad 2 demand drove the quarter with 5.9 million iPads shipping, 15.8 million iPhones, 3.4 million Macs and 9.7 million iPods. Scott anticipates revenue of $23 billion with EPS of $5.05. While supply chain issues could pressure margins and temper near-term guidance, he believes Apple can still deliver greater than 25% EPS growth for the next few years.
- Maynard Um at UBS is expecting a strong quarter driven by product refreshes. iPhone momentum continued in the quarter. An earlier than expected iPad 2 launch with demand continuing to outstrip supply may lead to unit upside. He sees limited impact from Japan and is looking for typical guidance.
- Toni Sacconaghi at Bernstein Research is lowering his numbers for the quarter to reflect several prevailing ongoing concerns for Apple (component pricing headwind, more modest sales at Verizon, reduced volumes across all products in Japan). In spite of these adjustments, he remains materially above consensus and is looking for $24.06 billion in revenue and EPS of $5.89.
Apple is known for dramatically low-balling its guidance, and then miraculously blowing out “expectations.” Check out the Business Insider guidance vs. reported chart for the past year.
Apple’s iOS Still Leads Google’s Android As Most Popular Mobile Platform (The Wall Street Journal)
Android might be the most popular smartphone platform, but if you add other mobile devices like tablets and iPods in to the mix, Apple’s iOS beats Android in the U.S. by a wide margin; 59% to be exact, according to a survey by comScore. The research found that Apple’s iOS platform 37.9 million people, while Android reached 23.8 million, on phones and tablets. Henry Blodget at Business Insider believes that Apple is fighting the same war it fought and lost in the 1990s.
Mac Sales To Beat Expectations (Barron’s)
NPD data suggests Apple is going to beat expectations for Mac sales for the quarter. For the month of March, Mac NPD was up 47% year-over-year driven by new MacBook Pros that started shipping on Feb. 24. That 47% uptick followed growth of 20% in January and 12% in February, for an average of 27% over the first quarter of 2011. That is well above the Street’s projected 22% growth according to Gene Munster analyst at Piper Jaffray. Read more at Business Insider.
iPhone 5 To Ship In September Says Supply Chain Sources (TheAPPERA)
Apple’s next-generation iPhone will have a faster processor and will begin shipping in September, three people with direct knowledge of the company’s supply chain said. The production of the new iPhone will start in July / August and the smartphone will look largely similar to the iPhone 4. That said, the iPhone 5 will include the faster A5 processor (found in the iPad 2), as well as a higher resolution 8 megapixel rear camera. Read more at Business Insider.
HTC And Nokia Win Round One Of Patent War (Apple Insider)
The staff of the U.S. International Trade commission has recommended that HTC and Nokia not be found liable of infringing on Apple’s patents in a dispute over smartphone technologies. The ITC trial began on Monday with Apple requesting that the commission block imports of HTC’s Android-based handsets, as well as some Nokia devices.