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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (51373)4/23/2013 11:42:55 PM
From: Spekulatius  Read Replies (1) of 78476
 
AAPL guidance is a disaster. Would be surprised if the stock can hold 400$. Their gross margins guidance heads down further to 36-37% (it was 47% last year). With no major product launches, a lower gross marginis a bad sign. Revenues down YOY (at least per guidance midpoint) is bad too and should translate in roughly 7$/share earnings next quarter. Even the capital return is not going to change the fact that AAPL is not growing topline and with the rapidly shrinking gross margins, the earning pressure is going to be severe.

I think the phone business has peaked in terns of profitability and most likely is in decline. Maybe topline will grow but with the lower margins, the earnings are under severe pressure. This is worse than I thought. I think they announced the dividend increase and buyback to smooth out the bad earnings, but personally, I would not be a buyer here.
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