« Google lays a sour egg just in time for Easter | Main | Beat and Raise From Discovery Communications »

April 20, 2011

Apple Continues to Amaze

I again tweeted comments as Apple held their earnings call. As a reminder, I find that my instant reaction is most valuable as I subsequently read through analyst reports.

It was another great quarter with iPhones and Mac laptops leading the way. iPads were supply constrained but management seems quite confident they are getting a handle on it which should show up in the next several quarters. Guidance was below the current consensus but better than many had been anticipating. Japan appears to be no issue. The bottom line is that the bull case for a $450-600 stock got a lot of support with this report.

Here are my tweets in chronological order:

I've been keeping a qtrly spreadsheet & writing EPS analysis on $AAPL since the start of 2005. There is really nothing left to say. Amazing.

$AAPL on Japan."some 2q rev impact. $200mm less in Q3 in guidance. did not have any supply or cost impact in 2Q or expected in 3q."

$ AAPL" "some LT supply risk from Japan beyond current qtr but impossible to predict."

$AAPL addressed two biggest issues, Japan/iPad supply, right off the bat in Q&A. All good. Stk pops $3.

$AAPL iPad 2 demand "staggering". Happy with mfg progress. Adding more countries. Confident can produce "a very large # of iPads for Q."

$AAPL $49 3GS iPhone price point very popular. But no hint of a lower $ iPhone.1st gen LTE chipsets compromised design. Not going there yet.

$AAPL guiding to 350 seq drop in gross margin. less operating leverage, more iPad in mix. Last Q benefited from iPhone beat/iPad miss.

$AAPL re Android, look at entire iOS platform, not just phones. also still like integrated vs. fragmented approach for user and developer.

$AAPL China is 10% of revenue. Been careful. Wanted to learn. Working. Will take knowledge to other emerging mkts.

$AAPL "see Jobs on regular basis. involved in strategic decisions. wants to return full time asap." more than they usually say. good sign?

$AAPL up $7 since call began. One bump on Japan, another on Jobs, more as call ends. Nothing to complain about here. $500 tgts get support.

Disclosure: Apple is widely held by clients of Northlake Capital Management, LLC, including in Steve Birenberg's personal accounts. Steve is sole proprietor of Northlake Capital Management, an SEC registered investment advisor. Apple is a net long position in the Entermedia Funds. Steve is co-portfolio manager of Entermedia, owns a stake in the Funds' investment management company, and has personal monies invested in the Funds.

Posted by Steve Birenberg at April 20, 2011 05:10 PM in AAPL