Monday, January 24, 2011

Apple - The Apple of Everyone's Eye

This from the WSJ:


Bill Shope, Goldman Sachs: The strong December results should underscore the underlying strength in Apple’s fundamentals, especially after the news regarding Steve Jobs’ planned medical leave. This is based on the following key points detailed in this note: 1) gross margins are recovering at a faster than expected pace, 2) iPad demand was far stronger than most expected, and 3) strong iPhone units exceeded our conservative expectations.
Gene Munster, Piper Jaffray: March Guidance More Aggressive Than Historical Guides: Apple Bullish On Verizon iPhone Opportunity (And Expanding Production Capacity). Apple issued EPS guidance above Street consensus for the first time in three years, 10% ahead of the Street. We believe this suggests Apple is, 1) bullish on the opportunity to sell iPhones to existing and new Verizon subs, and 2) working to increase production capacity.
Alexander Peter, Exane BNP Paribas: Apple recorded very strong traction in Asia, with sales up 67%. Sales in China quadrupled sequentially to $2.6 billion; Japan was another area of strength in all categories. Apple reported the highest traffic in its four stores in China.
Richard Gardner, Citigroup: [Gross Margins] of 38.5% was well above guidance, our est and consensus primarily due to more favorable component pricing. We were pleased to see q/q improvement in GM in most products, but especially pleased to see iPhone margins rebound several hundred basis points following last quarter’s steep drop.
Yair Reiner, Oppenheimer: The iPad delivered strong results, selling 7.3 million units in its third quarter since launch, comfortably above the Street’s 6.4 million target and our 7.0 million estimate. The performance is particularly impressive when one considers that many potential buyers are likely biding their time in advance of a probable iPad 2 release in late March or early April.
Scott Craig, BofA Merrill: iPhone units of 16.2mn exceeded our 15.6mn, with strong Y/Y growth in all regions. We think Verizon in F2Q11 should boost sales, while maintaining [Average Selling Price]/profit.
Shaw Wu, Kaufman: Inventory declined 16% Q/Q to $885 million from $1.05 billion last quarter as days of inventory declined to 5 days from 7 days last quarter, which is generally a good sign, but there could be concern that inventory levels are too low given still strong business level.
Brian White, Ticonderoga Securities: We believe Apple’s February 10 launch date for the iPhone 4 on the Verizon CDMA network is only the beginning of more CDMA announcements. Keep in mind, CDMA subscribers around the world are estimated at 550 million (2Q10) by the CDMA Development Group, with approximately 57% in Asia.

As we speak legislation is being introduced to make it illegal to say anything but good things about apple.  I have also heard that they are looking to use their cash hoarde to outright buy California and Greece.

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About Me

A student of the markets that has held portfolio management, analysis and trading positions for over 15 years.