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

To: Eric Yang who wrote (22564)	1/15/1999 2:24:00 PM
From: J R KARY	Read Replies (1) \| Respond to of 213173

Motley Fool's take on AAPL's alleged "channel stuffing" - "boo-sit" Thanks Eric. IBM's CFO Thoman was promoted to Xerox when he couldn't explain IBM's successful recovery a few years back. Opts expirs are playing a part but maybe the MF can help explain why CFO Anderson has been appearing on various talk shows since his earnings announcement: " CFO Fred Anderson did say that two days inventory was as good as it gets and that Apple's target is 4 to 6 days. Part of the massive inventory improvements, though, have come from systematic changes, including Apple's streamlined product strategy, its outsourcing of board production, and improvements in its supply chain, which should only get better given that the company installed an SAP enterprise system during the quarter that should help sales at the online store. The Internet store actually closed midway through December to complete that installation. Anderson said channel inventory was flat at 5 weeks and that all of the old iMacs still in the channel are price-protected (so without the price cut, gross margins would have been even higher). With channel stuffing, you usually see days sales outstanding rise, whereas they fell sequentially from 56 to 49. With 51 days sales payable, Apple operated this in Q1 with a negative cash conversion cycle a la Dell (Nasdaq: DELL). While reported revenue grew just 8% to $1.7 billion, Apple ditched its monitor and printer business in the past year. Revenue from computer systems actually increased 17%, quite a feat considering the drop in the average unit price from $2,400 last year to $1,840 in September to the current $1,776. Even backing out a 150 basis point one-time gain in gross margins from operating system software upgrades, gross margins were 26.7%, steady sequentially and up from 22.4% last year. As for the iMac, what's compelling to me is that some 32% of sales went to first-time computer buyers while 13% went to former Wintel customers. The iMac is expanding Apple's market -- massively. And both consumer portables and the important OS X operating system upgrade will be introduced later this year. When valuing Apple, investors should work in a 36% tax rate. But they must also back out the $9.44 cash per share net of debt. If you assume about $2.00 per share in FY99 earnings, Apple's cash-adjusted price is now 17 times the forward estimate, in line with its revenue growth. No doubt, Apple faces continued challenges. Still, a long-term investor might see a company with a consumer-oriented brand and proprietary technology, a company that's regaining market share and delivering operational efficiencies that are tops in its industry. Such a company ought to trade at a premium both to the market and to its own growth rate. " Regards, Jim K. ref: fool.com

To: Eric Yang who wrote (22564)	1/15/1999 2:46:00 PM
From: Mike Connolly	Respond to of 213173

Eric, do you think Anderson was being overly-conservative to predict sequential decline in revenue? I figured they held back the new imac and g3 until after xmas specifically to ensure they wouldn't have a sequential decline. Plus, the powerbook bump/upgrade will presumably come this quarter? Seems like there ought to be a fair amount of pent-up demand for the new g3, given all the previous anticipation of it's arrival (same with new imac?). Mike

To: Eric Yang who wrote (22564)	1/15/1999 4:11:00 PM
From: Irish Paddy	Read Replies (2) \| Respond to of 213173

Hi Eric, I seem to have problems getting appleinvestors.com, any ideas.

To: Eric Yang who wrote (22564)	1/22/1999 5:27:00 PM
From: J R KARY	Read Replies (2) \| Respond to of 213173

Hi Eric - From your very informative Apple Investors site: " Annual Meeting : Apple Investors Relations confirmed that the annual shareholder's meeting is scheduled to take place on Wednesday, March 24th." appleinvestors.com Wonder if the date will move out as FY992Q ends just after it on 3/26/99 ? Can't remember if was a portable , or a under $1,000 MAC , that was promised at the meeting last year . Do you recall what Mr J told the gentleman in the audience who asked about a "low cost" AAPL computer ? Thanks for all your efforts at AppleInvestors, Jim Kary