Apple financials Stories November 3, 2015

AAPL: 121.18

1.68

Apple’s planned manufacturing spend suggests a huge holiday quarter – Morgan Stanley

While most analysts are expecting Apple to comfortably beat its holiday quarter guidance of $75.5-$77.5B, one large firm of analysts goes much further.

An investment note by Morgan Stanley seen by Business Insider says that an analysis of Apple’s financial report suggests that the company could be gearing up for quarterly sales totalling as much as $84.4B.

The clue, claims the company, is the company’s off balance-sheet spending commitments.

Apple’s last quarterly report revealed $29.5 billion in off balance-sheet commitments, and $7.3 billion in other commitments, at the end of the September quarter.

These usually represent money that Apple is planning to spend on parts and manufacturing equipment.

It should be noted that although Apple has recently been beating its own guidance of late, this has typically been by just a few percent – nothing like the leap Morgan Stanley is suggesting. While Steve Jobs used to give extremely conservative guidance, seemingly enjoying blowing expectations out of the water, Tim Cook promised more accurate guidance under his leadership and has more-or-less been delivering on that.

It also wouldn’t be the first time the analysts have made big leaps on little data. We’re going to file this one in the skeptical pile.

Apple financials Stories February 12, 2015

Two days after AAPL hits highest market cap ever, billionaire investor Carl Icahn values it at $1.3 trillion

Two days after Apple set a new record for the highest market capitalization of any company, valuing it at more than $700B, billionaire investor Carl Icahn has suggested the true value of the company is close to double this, at $1.3T.

Icahn, who is one of the company’s ten biggest shareholders with stock worth around $6.5B, says that a realistic valuation of the company would be 20 times its earnings per share. Factoring in Apple’s cash reserves of $178B, that would give a share price of $216–for a total company value of $1.3T.

Icahn notes that while he has previously been criticized for over-optimistic valuations of AAPL, 31 analysts have “dramatically increased” their earnings-per-share estimates in the past fortnight.

We have gained further confidence in our thesis, increasing the forecasted EPS for FY 2015 in our model from $9.60 to $9.70, and now believe the market should value Apple at $216 per share.  This is why we continue to own approximately 53 million shares worth $6.5 billion, and why we have not sold a single share.

Icahn has consistently urged Apple’s board to increase the pace of its stock buyback program, his last call coming at a time when the shares were trading at $100. At the time of writing, shares were trading at $124.88. Apple recently set another world record, announcing the highest ever quarterly profit of any company.

Apple financials Stories December 3, 2014

Covent Garden, London – one of the largest Apple Stores in the world
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New corporate tax measures aimed at preventing multinational companies making profits in the UK and then shifting them overseas where they incur lower taxes could potentially impact a number of tech companies, including Apple, Google and Amazon.

The British government announced a new 25% tax on profits generated in the UK and then “artificially shifted” overseas, reports the BBC …  expand full story

Apple financials Stories July 18, 2014

Someone once said that if you put three analysts in a room and ask them a question, you’ll get four different opinions. This certainly appears to be the case today, with Fortune finding no more consensus on iPad sales than it did on iPhone numbers.

Asked to predict how many iPad sales Apple will announce in next week’s Q3 earnings announcement, the overall average suggested year-on-year sales would be flat at 14.35M. However, no consensus view emerged …  expand full story

Apple financials Stories February 20, 2014

Analyst delivers the ultimate insult to Apple, calls it ‘the next Microsoft’

Apple just might find itself shopping around for a new finance partner for its retail stores after Barclays analyst Ben Reitzes likened the company’s future potential to that of Microsoft.

Downgrading AAPL from a buy to a hold, Reitzes said that while he was excited by the iWatch and Apple television ideas as a consumer, he didn’t see either driving double-digit growth. Quoted by Business Insider, he said:

We look at a valuation analogy vs. Microsoft from 2000 to about 2010 and see no precedent that large-size tech companies simply start to broadly outperform again after a tough year or two if the law of large numbers is catching up to them and margins have peaked.

Ouch! Still, it appears his pessimism is not universally shared.

Apple financials Stories February 11, 2014

Asymco has calculated that if iTunes were a standalone business, it would be ranked 130 in the Fortune 500 list of top U.S. companies after its gross annual revenue grew 34 percent year-on-year to $23.5B. This would put it between Alcoa and Eli Lilly in the rankings, and is almost half of Google’s core search business – not bad for what was originally intended to be a break-even operation

Growth was driven by increases in revenue from App sales reflecting continued growth in the installed base of iOS devices and the expansion in the number of third-party iOS Apps available. Net sales of digital content, including music, movies, TV shows and books, from the iTunes Store was relatively flat in the first quarter of 2014 compared to the first quarter of 2013.

Asymco also calculated the cost to Apple of making both the Mavericks update and iWork software free …  expand full story

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