Eric,
As the Q2 reports are getting closer, I pay more attention on what
we could come out the more accurate revenue/net income estimates and
hence re-visited your site on Q2 estimates today.
I agree with most of your assessments on revenue/Margin/Interest/cost,
however, there are several points you might need to take into consideration:
(1) Revenue
(i) The factor of cloners phasing out from the last January
(1/98) have been mentioned in your description, however you
didn't seriously take into account for the number of units or
revenue that could be generated from this factor. From
January data, we knew Apple did pretty well. It generated
#3 (11+%) revenue in retails, sold more than 7% of total pc's.
We couldn't totally contribute to G3's sales, but
disappearance of cloners should also be a major factor;
(ii) If we trust Jobs' estimate of Apple has 5% of total pc
market (we don't know he implied to amount of dollars or
units.), your units and revenue estimates seem to be lower
than what 5% should represent.
(iii) The G3's units sold may increase as the prices of those were
cut. This is a rather complicated issue. I don't think we
need to figure out from sensitivity analysis. But, it
certainly will impact the results significantly;
(2) Margin -
(i) The margin is changed due to:
- the ratio of G3's to nonG3's;
- prices cuts on G3's;
Hence, I roughly agree with your 24.5%. However, I think we
may get lower margin due to the combinations of the above
two variables.
(3) Interest -
Agree.
(4) Cost -
(1) You might need to consider the cost saving (if any) on
Newton's layoffs. Taking the action on Newton's in this
quarter by Jobs may try to save several $m dollars since Q2
is the most important quarter under his adminstration so far.
Based on the above comments on top of your fundamental analysis,
I have reasons to be optimistic on Q2's outlook.
Cheers.
Phil |
