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Apple Inc. Message Board

  • docnaka12 docnaka12 Jan 10, 2013 12:37 PM Flag

    Looking at PROFITS only

    I have yet to see this approach, but looking at profits per item, how can Apple miss? I am using numbers that I believe are close, but NOT fact.

    ipad mini = $100 profit per item (might be slightly high $90 likely)
    iPhone = $425 average per item
    ipad (full size) = $210 average per item

    Therefore, the mini will have little affect on earnings as 8 million (minimum) is a given. If they do indeed beat by 2 million minis, this equates to only $200 million in profits or less than 25 cents per share. I believe that the final profit will be around $800 miliion.

    The regular sized ipad should come in about the same as a year ago. Despite being introduced to new markets and slight improvement, I think that "cannibalization" will offset any increased numbers. However, there is probably a 2 million deviation EITHER way (+ or - 2 million). Once again, we are NOT talking huge numbers as a 2 million difference is equal to about $400 million. I am going to say that YOY quarterly growth is zero for arguments sake.

    The real PROFITS will come in the form of the iPhone. There is speculation over which phone is selling better (4S vs 5). The 4S profit margin is reportedly 70%, so I don't see a problem if they sold more 4S's than 5's. Still, Apple will OBVIOUSLY sell more than 37 million iPhones from last year. I am going to use 46 million iphones with a standard deviation of 5 million. The extra 9 million iphones should amount to a profit of about $3.75 billion.

    Last year's profits were $13 billion and with my new numbers profits would be around $16.75 billion. Assuming that operating expenses went up, we could drop this number down to $15 billion in profits. Personally, I feel that this number is pretty conservative. The EPS would be $15.92 vs $13.87 from last quarter. Obviously, the ONLY way Apple does not meet these numbers is if they are on the LOW END OF ALL OF MY ESTIMATES.

    Just another way to look at the "numbers game"

    Note: Ipods, Macs and "other" are insignificant with likely decrease in mac and ipods equaling "other" (itunes and software) category

    Sentiment: Strong Buy

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