Tuesday, July 23, 2013

Fiscal 3Q 2013 Final Estimates

At around $424 AAPL is now trading at 9.1x my forward EPS estimate (5.9x ex-cash). These two quarters (June and September) really don't matter, but Apple better beat my revised long-term projections since I've set the bar quite low. I want to start revising numbers upwards from here on, for a change.

3mo ending Jun-2013   Rev($M)   EPS($)
-------------------   -------   ------
Apple guidance(mid)    34,500     7.13 (derived with 934m diluted shares)
Analysts consensus     35,090     7.31
Deagol estimates       36,186     7.70

3mo ending Sep-2013   Rev($M)   EPS($)
-------------------   -------   ------
Deagol estimates       39,690     9.30
Analysts consensus     37,550     8.08
Apple guide (est.)     37,500     8.62 (derived with 922m diluted shares)

12m ending Sep-2014   Rev($M)   EPS($)
-------------------   -------   ------
Deagol estimates      186,727    48.18
Analysts consensus    186,230    43.34

Valuation (12mo ending on)   EPS($)  Y/Y  10x  Cash* Div   Tot
--------------------------   ------  ---  ---  ----  ---  ----
Trailing        (Jun-2013)    40.27  -5%  403   149   11   563
Fair value      (Jun-2014)    46.66  16%  467   158   12   637
1yr target      (Jun-2015)    51.80  11%  518   183   13   714

* Cash balance net of debt

F3Q13 Revenue breakdown ($M):
Mac        5,213 ( 3,900 × $1,337)
iPod         836 ( 5,200 × $161)
iPhone    16,620 (28,000 × $594)
iPad       8,234 (18,600 × $443)
iT/S/S     3,961
Accssr     1,321

Income statement ($M):
Revenue   36,186
COGS      22,846
GM        13,340
OpEx       3,914
OpInc      9,425
OI&E         293
Pre-tax    9,718
Tax        2,527
NetInc     7,191
Shrs.        934
EPS        $7.70

GM%        36.9%
OpInc%     26.0%
Tax%       26.0%
NetInc%    19.9%


JavaJack said...

Love this! I hope you're right with your estimates. The past year has been a sad year for investors and Apple in general. Looking forward to a resurgence, Thanks as always for your work, Daniel.

artman1033 said...

Thank you Daniel.

I think the total share buyback will be important. I think there may be 944 M diluted shares.

My WAG on iPad ASP =$425

Daniel Tello said...

Artman, 944m shares is only 2m less than the March quarter. At say $430 per share that's about $860m. But Apple still had $58b to spend over 11 quarters, or more than $5b/q which at $430 could buy them about 12m shares last quarter.

Why do you think they wouldn't take advantage of the depressed price yet?

RD said...


I wonder if you'd care to speculate about where your expected growth will come from, whether you're projecting it from native growth within the current product offerings, from a reduced share count, etc., and how you expect reduced margins on iPad and potentially lower-priced iPhone to balance with iPhone 5S margin gains. Obviously a huge question, so maybe a simpler way would be to say: How will AAPL grow from here?

Gregg Thurman said...

Deagol, I like your numbers...a lot. They are almost a mirror of my own.

On share count, I think the point was to offset the dilution created by maturing employee grants. For that reason I don't see Apple buying on the open market. Not doing so gives them price elasticity they wouldn't ordinarily have. That elasticity becomes important when buying back underwater grants.

It doesn't matter otherwise if the buyback is on the open market (where I don't see that kind of activity having occurred), or from employee grants, the buyback impacts fully diluted shares either way.

I'm conflicted about the net reduction, because there ordinarily would have been increased dilution from maturing grants. In past periods that amounted to about 3 Million shares.

I'm showing a net reduction of 7 million shares, and if they were all buybacks of employee grants, the ASP could be much higher without impacting the market price.

Gregg Thurman said...

Whoops. Net reduction should have read 4 Million. Seven million is my estimate of how many were purchased.

artman1033 said...

IT appears there are 924,265 Million diluted shares.


iPad ASP =$436.

How's my math?