Apple Q1 2009 earnings smackdown
UPDATE: The results are in! See Analyzing the analysts to find out who won the smackdown.
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It's that time of year again.
After the markets close on Wednesday, Apple (AAPL) will report its earnings for fiscal 2009 Q1. And once again blogger Andy Zaky has challenged the professional analysts — most of whom, in his opinion, are clueless — to do as good a job anticipating those results as he and his blogger buddies do.
Last quarter, the round went to the bloggers, who over-estimated Mac sales and therefore total revenue, but were far closer to the mark on nearly every other number (see Apple Q4 earnings: Analyzing the analysts).
This quarter, Zaky expects the pros to do even worse. "If previous earnings debacles weren’t already embarrassing enough for the analysts," he writes, "then this quarter should be one for the books." (link)
The Street — represented by Thomson Financial's polling data — expects Apple to report a relatively anemic quarter, with earnings of $1.38 per share on revenue of $9.74 billion. (Apple's guidance offered a range: EPS between $1.06 and $1.35 on sales somewhere between $9.0 and $10.0 billion.)
Zaky, who tracks Apple in a blog called Bullish Cross, is expecting a blow-out quarter so much better than the Street's consensus — as much as $1 billion — that trading in Apple shares could be halted. The estimates of colleagues, whom he calls the "unaffiliated analysts" are pretty much in line with his.
The key, according to Zaky, will be the adjusted — or non-GAAP — earnings that fully report revenue from iPhone sales (see Spotlight on Apple's hidden revenue stream).
We'll find out who is right soon enough, thanks to the scorecard Zaky has provided. He's gathered all the analysts estimates he could get his hands on and assembled them in the spreadsheets pasted below the fold. (It’s a work in progress and may contain errors; analysts with corrections or updates are welcome to mail them here.)
Tune in to this space after the markets close to get Apple's Q1 results and to follow our live blog of the company's earnings call with analysts and reporters.
Zaky's spreadsheets:
"Andy is a genius because he has done it again. He was right on everything. I am so sick of these idiot analysts that get paid six and seven figure salaries to write reports that sway the stock up or down in the direction of their respective firms. The market reacts too much to what these incompotent morons say with upgrades and down grades. Numbers don’t lie."
What are you talking about dude! Andy didn't get a single number right or even close. Only number that wasn't correctly predicted by the "six figure" analysts was the EPS. Get over you love for Andy and let go of his johnson.
So despite all the doom and gloom, people still bought Macs, iPods (especially iPods, their numbers there are staggering) and iPhones. And it's not surprising. People with high incomes buy Apple products and they don't buy on credit like low-income people. They still love these products, they love the brand, love the style. And they know they're not getting a piece of junk so it makes for a good investment.
Andy is a genius because he has done it again. He was right on everything. I am so sick of these idiot analysts that get paid six and seven figure salaries to write reports that sway the stock up or down in the direction of their respective firms. The market reacts too much to what these incompotent morons say with upgrades and down grades. Numbers don't lie.
Looks like Gene Munster was the winner on Revenue, Scott Graig on iPhones, Doug Reid on Macs, Mike Abramsky on iPods, Deagol/Turley muller on EPS (Unaffiliated Analysts).
Looks like the real analysts won this round. Oh BTW the Q2 number are lower than expectations. Stock is up now but tomorrow it might be a bit more muted since they are guiding down slightly.
Here's the problem. Apple never gets credit for its quarterly outperformance because the market is more concerned with the forward guidance. So, even when q/q numbers are stellar, the conservative guidance nullifies what should be an investor celebration of another spectacular quarter. Everyone knows the ploy by now, but still the stock moves on the guidance and not on the results. Apple should cease giving forward guidance or, even better, should release a weekly or daily tally of all phone, computer, app, and music sales. Why not? Let's have more clarity, not less. What they are doing now clearly isn't working to the benefit of shareholders and provides plenty of opportunity for data manipulation by analysts. If the company books as sold everything that they ship, they have this number and could easily release it. In the event that accounting rules prevent them for recording that revenue until the seller actually sells it, the company would need to receive a daily or weekly sales report from its selling partners, but I would guess that this already happens. I'd be interested to hear from anyone who thinks that such transparency would not be a better idea than what the company does now. Help me see what I may be missing. Thanks.
The teary saga continues:
Apple posts great numbers, issues lower guidance for all of 2009, adds another $2 billion to it's cash reserve, stock either remains the same or tanks another $5, long-term investors get nothing back for at least another quarter. For the next half of the year, Apple share price fluctuates based upon Steve Jobs health rumors and wagering whether he'll return to Apple or not. Apple fundamentals no longer valid for gauging share price. Only a toy for blogger's delight. Great company excellent customer service, lousy near-term stock investment.
Wall Street called it. Acer was the big winner this quarter. Apple was the big loser.
Ha! Should I trust my money to people who have failed on Apple and worse who have been reactive rather than predictive of the current economy? No thanks. I'm reminded of the commercial with all the monkies in the office. Spend an hour in an Apple retail store to be more accurate.
'to expect that revenue didn’t take a hit during xmas is just ludicrous'
To assume that revenues for apple will be down just because of the economy is the same uninformed, lemming-like assumption all these analysts are making. The numbers are already out from various research groups: ipod sales are flat YOY, mac sales are up in the 4-6% range YOY, and iPhone wasn't a factor last Q1. So if they did $1.76 last year Q1, and this year you can add in iPhone (both current qtr and deferred), how on earth do these "geniuses" come up with estimates like $1.30? I really, sincerely hope these so-called professionals get so much egg on their face today. Of course, it won't help the stock price because the same "pros" will say "oh yeah, they did it this qtr but NOW the economy is really going to hurt them." Yawn…
No doubt they will blow through the Streets numbers, but they did it last quarter and the stock went south. It's their crappy guidance that is killing them, and the share holders. Seems like Apple is missing the mark pretty bad. If they end up at 10.7 Billion that is a huge miss to their own guidance, and you can't blame the street for that. I am hoping for a short term pop to get out with, because the no matter how much they outperform their peers the stock does not follow suit.
These guys are just guessing (not to say that analysts don't either) but to expect that revenue didn't take a hit during xmas is just ludicrous.
Not to mention what happen last qtr doesn't really matter, it's what Apple says about the next qtr that is going to make or break the stock.
Tony! Toni! Toné! Sacconaghi always lowballs AAPL and is always wrong. You'd think he would quit trying, and failing, and move on to a company he can properly analyze. If that's even possible …
Scott Craig at Merrill Lynch has estimates that make the most sense to me for both GAAP and Non-GAAP.
Wow,these estimates are all over the place. Someone is going to be very, very wrong. I hope it's not Andy!! PED, please do a follow-up later and give us the good, bad, & ugly so I can update my Wall of Fame and Wall of Shame for analysts.
ex ped: That's the plan.
Mike, the most important number by far to investors is the EPS. On that count, Andy and the other unaffiliated analysts were almost right on the money — far, far closer than the others.
iPhone and iPod Touch sales are very much linked — they share the same technology and run the same software. People will buy one or the other, not both. I think this holiday season, the iPod's were a huge hit with the gift giving crowd. iPhones are much more difficult to gift, with the in-store activation process and carrier restrictions.