Comments on: Deferred earnings: Apple's hidden revenue bonus

By: Ander Collar, New York, NY

Ander Collar, New York, NY — Sat, 19 Sep 2009 20:13:16 +0000

The reason for the accounting treatment is this: When looking at a Company's ability to create income – you have to compare the incomes they receive with the costs they have for having those incomes. This is today done a in shorter and shorter time period. Therefore you have the problem if you continue to have costs such as for software developments ("updates") then you have to calculate the incomes in the same period – Otherwise you will not be able to see the Company's ability to create income – and in the end – profits.

By: Anonymous

Anonymous — Wed, 25 Jun 2008 21:35:36 +0000

"As Rosenmen points out, those $3 billion and change are not going away. They are like backordered Boeing jets or offshore oil reserves — the equivalent of money in the bank."

Nom, it is not like backordered Boeing jets.

A backorder means a product still needs to be delivered. In the case of the iPhone, there is nothing left for Apple to deliver.

Chris – CO

By: AAPLassociate, NYC

AAPLassociate, NYC — Wed, 13 Feb 2008 03:34:55 +0000

I agree with Dave – those analysts are so dumb! Only 93% of analysts covering AAPL do so with a Buy rating, and the average price target is just over $200. I assume Dave from TX is not making the big bucks. Deferred revs is a topic everyone on Wall Street except Dave already knows about. Its taught in entry level financial accounting and is a topic on the lowest level of the CFA exam. Conspiricists should look at Time Warner (TWX), where mgt arbitrarily recognizes revenue from magazine subscriptions over (gasp) the 12 months of a subscription. Extra knowledge for the kiddies: deferred revenues are accounted for as a liability, so as they are recognized on the income statement as revenues, the company's balance sheet magically de-levers!

By: Andrew, BC Canada

Andrew, BC Canada — Tue, 12 Feb 2008 06:02:33 +0000

So beyond 8qtrs this does not matter? Why was no analysts, real analysts, contacted for comment on this? Better hope that they sell a boat load of these 2 items and don't ramp up add-ons, upgrades, patches, fixes or what ever. Or that revenue will not turn into profit.

By: Ken C, Gardiner, Maine

Ken C, Gardiner, Maine — Tue, 12 Feb 2008 04:34:48 +0000

I've been pointing this out on Google's msg board, MDN, and Rosenman's blog, that the analysts don't get it. If, they did, they wouldn't compare last year's revenue number to this year's, without mentioning the deferred revenue number. Otherwise, they're comparing apples to oranges. I figured Apple's revenue figure for last quarter was not $9.6B but in fact, $10.5B if you included the deferred sales. That was a blowout, but the analysts were too stupid to notice.

By: Mike, San diego, CA

Mike, San diego, CA — Tue, 12 Feb 2008 04:16:25 +0000

This deferred revenue is one of the main reasons I'm so excited about Apple's future and why Steve Jobs is not worried about earnings anytime soon. When he's asked about alll the negative news articles, he shrugs as if to say"if they don't get it, I not going to explain it to them"

The deferred revenue is like a big snowball going down the mountain…it keeps getting bigger as the base stays intact and it keeps growing expotentially as time goes on.

By: JB Boston, Ma

JB Boston, Ma — Tue, 12 Feb 2008 02:42:12 +0000

Iphone reported by several outfits to cost $220 so about $180 profit per + $15 per month ATT 180+15(24)=540/24 = $22.5 per unit per month * 14 mil on market at 1/1/09 = $315(3) =$945 mil per qtr PROFIT – close to $1 per share

in 2009 not incl. atv,aplcre etc.. look for $2-3 per in 2010?

BTW MBA is the best selling Mac on the Apple website now

By: new zealand

new zealand — Mon, 11 Feb 2008 23:51:58 +0000

By the time FY10 comes along…. won't all the deferred revenue for iPhones and contracts already have run its course? (revenue is defered over 24 months).

any bomb that gets dropped by then is based on product sold late this year and next year.

By: Brian, Indianapolis

Brian, Indianapolis — Mon, 11 Feb 2008 21:04:17 +0000

I am not a business school grad. But you guys are just now figuring this out? They announced this when the iPhone came out. Stock was at about $85 then… Went up briefly, day traders, etc… took profits and it settled back to about $87 before last year's run up past $200.

It will surpass $200 again this year, easily. You all can't wrap your head around the MB Air. Think it's a 'cube'? You have no clue, it's the laptop of the future. Nobody uses the ports they left off. You think the iPod was a fad? If so, then you are wrong about that too.

By: Marty Davidson, Washington, DC

Marty Davidson, Washington, DC — Mon, 11 Feb 2008 20:45:00 +0000

The other link to not click is Seeking Alpha "under the radar news". It seems a few people have figured that if AAPL shows up in their text, their hitcounts go way up. So every article now mentions AAPL, even if it is to say "no news on AAPL today – isn't that strange?"