Below are my Twitter comments in chronological order as I was listening to the Apple conference call. I find these initial reaction comments, which for most companies are handwritten notes, are usually my best analysis. Gut reaction plus objective analysis is reliable. Or to put it another way, I like to keep it simple and not overanalyze every last detail.
To reiterate, I think this was a very good quarter from Apple and justifies raising my 2010 price target from $265 to $350 based on the math below.
• All good at $AAPL. If I HAD to nitpick…tax rate of $23.7% added about 23 cents. Cash build less than usual. Inventories up a bit.
• $AAPL made an acquisition and inventory build is probably iPad. Mac shipments and ASP in line. iPod units BTE on ASP BTE.
• $AAPL iPhone shipments of 8.74 million is way BTE. Flat against seasonally strong Dec Q. Good for $T thohg big rev gains outside US.
• $AAPL US rev +26%, Europe +63%, Japan +51%, Asia Pacific +184
• Old consensus for $AAPL for FY10 is $12.06. Figure it goes north of $13 now. 20 times EPS before deducting $45 in cash. 16.5 times adj P-E.
• $AAPL rev +49%, net income +90%. Say what you want about P-E, but at 16.5 adj for cash or 20 times unadjusted you get a lot of growth.
• How about $15 EPS for $AAPL in 2011. 18-20 P-E plus what will be north of $50 per share in cash for target of $350????
• $AAPL explains lower tax rate as “true up” to change from 29% to 27% for yr due to greater intl mix. Legit explanation. + for estimates.
• $AAPL guidance on gross margin is for seq drop of 470 bps due to iPad, forex, mac transition, and unannounced transition. Unannounced :-).
• Gr8 Q from Bernstein analyst on $APPL guidance and iPad. Either iPad unit or mgn expectations way too low. Or gross mgn guidance too low.
Disclosure: Apple is widely held by clients of Northlake Capital Management, LLC including in Steve Birenberg’s personal account. Steve Birenberg is sole proprietor of Northlake Capital Management.