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

To: Sam Scrutchins who wrote (11766)	4/18/1998 1:14:00 AM
From: Eric Yang	Read Replies (1) \| Respond to of 213176

As far as I know Apple still has a lot of tax credit from previous losses in the US. What I gathered from the conference call is that the 4 million dollars tax provision was taxes for foreign sales. I hadn't taken foreign tax provision into account in that Feb Q2 estimate article. If I subtract 4 million from the $61 million estimate, the estimate would have came in at $57 million. Pretty darn close/lucky eh? In terms of estimates for margin, and revenue initial estimate in that Feb article were also more accurate than the adjusted one. revenue was 1405 mil vs 1420 mil estimated margin was 24.83% vs 24.5% estimate cost was 297 mil vs 293 mil estimate interest was 8 mil vs 6.4 mil estimate tax was 4 mil vs 0 mil estimate... Okay I blew this one =-p The factor you mentioned regarding Q3 are important. I think the bottom line is that the revenue will increase from Q2. The question is how much. The sales of G3 DT and MT should remain healthy while the new AIO and WallStreet in May should help boost revenue. I haven't had time to think everything through yet but my initial impression is that we should see another slight improvement in margin (not a drop) due to higher percent of G3 and the intro of high margin WallStreets in May. "In this respect, please quantify how much each percentage change in margins will affect the bottom line." Each percentage point in margin translates to about 14-17 million in the bottom line..depending on the revenue. I tried plugging in a few numbers...and it looks like the profit in (millions) may even be a 3 digit number. I know what you guys are thinking... Eric must be out of his mind. ;-) Eric

To: Sam Scrutchins who wrote (11766)	4/18/1998 9:43:00 AM
From: soup	Respond to of 213176

>It is not clear to me why Apple had to make any provisions for income taxes in Q2 given its large losses last year, but apparently they did. At some point, these carryforwards will go away, but I do not know exactly when that will happen. I suppose it is possible that it could affect Q3.< Sam; 1) At the conference call, CFO Fred Anderson said that AAPL had about $500 million (!) in tax loss carry forwards and did not anticipate AAPL having to pay (US) taxes through FY 1998 and possibly through FY 1999. Note: Companies get taken over/bought out just so the acquirer can utilize that size carryforward! (BTW, for the same reason mutual fund investors with taxable accounts should consider funds that have taken such losses to benefit from lower future capital gains. Morningstar reports keeps track of these numbers.) 2) Anybody have numbers to account for AAPL's book value increase from the ARM IPO? 3) Ian, I may be out of town next Friday 7-8:00PM, but if not, may I suggest Eddie's Restaurant (across the street from the Apple Restaurant) at 14 Waverly Place. Less formal, cheaper beer, better food - burgers, burritos, vegetarian, no smoking. It's large, we can move tables around. soup P.S. The assholes are back.