Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Sam Scrutchins who wrote (14300)	6/5/1998 12:21:00 AM
From: Eric Yang	Respond to of 213177

"Eric, Sometime back, I think you predicted PB sales for Q3 as part of your earnings estimate. If you did, what was the number that you did predicted would be sold, and do you think Apple will meet your forecast. If not, what is the new number for PB sales and its effect on Q3 earnings. Thanks for your reply." Sam, I think you are referring to the following two posts May 1 Message 4285738 May 3 Message 4303584 Basically Apples Q3 guidance to analysts is that 1)revenue for this quarter is expected to be flat and 2)margin is expected to be above 23%. If one were to take those numbers literally we would arrive at an estimate of about $39 million or 27 cents per share. While that would have been enough to beat analyst estimates of 24 cents when the quarter started, the consensus estimate has since jumped up to 34 cents or 49 million and is expected to go higher. Apparently these analysts feel that Apple's guidance is conservative and are expecting higher revenue and margin than Apple's guidance. Of course, these numbers all exclude the one time gain from the ARM IPO. Back in May, I felt that Apple is likely to generate revenue in excess of $1520 million which is $100 million or so above the $1405 mil revenue last quarter. My argument was that if Apple simply boost its PowerBook revenue from $183 mil (in Q2) to $300 mil range it would have our $100 mil revenue increase. PowerBook revenue only dropped to $183 mil in Q2 because Apple intentionally cut back on Pre-G3 PowerBook shipment to prepare for the intro of the new WallStreet PowerBooks. I didn't think that $300 mil from PowerBook revenue was outrageous considering that historical powerbook revenue was around $400 million and we had almost two months to sell the new WallStreets. Well that was then... Over the last month, it appears that the supply of WallStreets is much lower than we had expected. The demand is there but for some unknown reasons the supply is extremely constrained. Situation seems have finally improved this week but it might be too late to help this quarter. As a result I don't expect the revenue to come close the optimistic $1500 mil mark. In order for us to just meet the $183 mil PowerBook revenue last quarter Apple would have to ship about 70,000 PowerBooks. Since Apple hasn't officially made any comments on expected PowerBook unit shipment this quarter none of us can come up with any reliable figures as to how many will actually ship. My feeling is that even with 22 days to go in the quarter I don't think Apple will be able to ship anywhere close to 50,000 of the new G3 PowerBooks. So unless Apple has some pre-G3 PowerBooks stashed away somewhere to ship this quarter, they better start cranking out those G3 PowerBooks...else it might be hard to even meet the $183 mil mark. Even with the powerbook supply issue I still feel that Apple should be able to beat the estimate this quarter. In Q2 analyst estimates were so low that our calculations showed that we were almost to beat it by a large margin. This time around however, 1)with the analysts raising their estimates and 2) without the benefit of PowerBook revenue boost to count on, our margin for error has been decreased. It's harder to make the same kind of argument for a huge positive earnings surprise in Q3. Looking further ahead...Q4 and Q1 98 earnings should be quite impressive. Eric