« Google Misses. Sort of. | Main | All Good at Apple. Again. »

April 21, 2010

All Good at Apple. Again.

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.

Posted by Steve Birenberg at April 21, 2010 08:29 AM in AAPL