Eric, I have to hand it to you. I now believe you were on target when you suggested that the initial G3 margin was over 30%. I say this because even though the PowerBooks were really marked down this quarter, as well as the G3s later in the quarter, the overall margin still rose.
However, I think you are being overoptimistic about next quarter and here's why. First of all, Anderson said revenue would be flat from last quarter to this quarter. It's in many of the articles about earnings. So he's conservatively guiding us to $1.4 B in revenue. I'm sure we'll beat it, but we should keep that for our baseline. Looking at the year ago Q2 to Q3 growth is problematic. First of all, the real revenue for Q2 1997 was $1.8 B because they sold an extra 100,000 Performas that quarter that had already been counted by Amelio in the previous quarter. So sales weren't really as bad as $1.6 B last quarter. Also, sales in Q3 1997 were helped immensely by the 8600s shipping in June. If they had been delayed another month you wouldn't have seen growth quarter to quarter, you would have seen a sickening decline.
I think the only thing we really know about seasonal trends for the new Apple is what they are telling us. Christmas is still a prime retail time, but the fiscal fourth quarter is now probably their best quarter. And I think the company's revenue guidance has been pretty accurate. If they say we won't see year-on-year growth until the Dec. quarter, I for one believe them. It is the growing margin and the cost cutting that allow for the better results.
So what I'm saying is that I don't see:
<<If we can see a 10% sequential revenue growth 1545M and sustained margin of 24.83% then the
profit should be around 95M or so.>>
I see $1.45-$1.5 B revenue and 23-24% margin. The AIO is probably not the greatest margin product in the world and the remaining non-G3 inventory will be firesaled to the public and to schools as well. What kind of negative margin do you think a $999 6500 brings?
This company is executing its core business very well. Revenues have probably bottomed out and should grow a bit this quarter. Profits have a good shot to be higher as well. But it is still a tough battle. What do you think about the inventories, when you compare quarter on quarter?
Regards,
Marc |
