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Apple Inc. Message Board

  • thomasthecat69 thomasthecat69 Mar 22, 2009 12:08 PM Flag

    Snowballing deferred profits

    I estimated Mar 09 quarterly profits based on the Sept 07 quarterly profits of $1.01 and taking out the $0.05 in profits that the 1.4 million in accrued Iphone sales had contributed. Therefore, I'm starting with a base of $0.96 for the non-Iphone profits for this current estimated Q.

    I'm estimating 2 million Macs this Q and 11 million Ipods based on the new Shuffle and Touch doing very well worldwide. 2.29 Macs last y/y with a NPD 16% reduction (which I think is too high a %) gives this years Macs at about 2 million. A NPD 16% reduction in Ipods y/y would put this Q at about 9M but my thoughts are that international Touch sales and the new Shuffle will negate that. Sept 07 Q has sales that most closely resemble these estimated figures.

    To be very safe, we can also use last year's profits of $1.16, knock off $0.20 for Iphone contribution, giving $0.96 and then still knock off 16% of that putting it around $0.80. One flaw in this math is that profits don't usually follow revenues in likewise percentages and thus the similar prior quarter sales might be more accurate.

    With 17.4 million Iphones sold already, the deferred profit to be realized this quarter should be around $0.63/sh. This is based on $50/quarter profit realization before a 35% tax reduction. If we drop it down to $30/Q profit, then after taxes the per share from Iphone is $0.38. This I think is a ridiculous $30 number as it would equate to only $240 per phone in total profit.

    But considering the worst case scenario for Macs & Ipods at only $0.80 and a very conservative Iphone contribution of $0.38, the expected profit is a minimum of $1.18. Current consensus estimate is $1.08.

    Considering that last quarter the NPD data was indicating a similar dropoff in US sales, Apple still reported w/w growth in Macs and Ipods y/y and only 3% drop in Macs q/q. A 16% across-the-company cut in profit to $0.80 per my estimate appears excessive. Using an 8% decline and a half-way Iphone earnings estimate (between $0.38 - $0.63) gives earnings of $1.38.

    If my Iphone profit is more right on the high end, then we could see $1.51. And if we use the $0.96 Sept 07 extrapolated earnings as the base, the net could be $1.59 in the best case scenario.

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