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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: GS_Wall Street who wrote (8671)	2/20/1998 11:15:00 AM
From: Eric Yang	Read Replies (1) \| Respond to of 213176

I assume that Gross margins will be slighly ahead of last quarters due to continued benefits of cost controls and better margins on newer machines. No more than 1% total improvement though. I think the margin for G3s is somewhere in the low 30% range. If Jobs' estimate of 300,000 to 350,000 units of G3s can be achieved this quarter it should account for about 50% of total unit shipment compared to just over 20% last quarter. This can boost margin to 24-25% range even if margin for non-G3 were lowered to 16%.. The final margin all depend on the price cuts strategie Apple takes this quarter. Selling Expenses to be down very slightly at ~229M due to increased avertising expeneses? And RD to hold flat at ~80M. Total costs ~309M. As I understand it, most of the increase in advertising cost will be offset by the reduction in co-op fund to the resellers. According to the SEC filing, R&D spending is expected to remain flat but there will be more reduction in adm expense. Anderson says that cost for this Q should be below 300MM. The total cost has been dropping at a rate of about 40-50 MM/ quarter.Do you think another reduction of 20 MM from 313 to 293MM is overly optimistic? Using $1420M top line, my estimate is for .15 per share earnings. The consensus estimate has been rising over the last few weeks. It went from .14 to .15 last week and I would expect it to go up further as we approach end of Q2. You can also come up with .15 with revenue =1300, margin =24%, cost =300, interest = 5. Eric