“No analyst is including [Apple’s] tsunami of revenue sharing due from iPhone sales and partnerships, which is accruing at a monster rate (currently $1.2 Billion) the earnings from which are amortised out over a period of 24 months on a subscription account scheme,” Julian Ivan-Alexander writes for Seeking Alpha.
“Apple has the equivalent of an additional 25c earnings in free cash flow, which had it been taken into account would have resulted in Q1 earnings of $2.01 instead of $1.76,” Ivan-Alexander writes.
“So for Q2 – for which Apple guided for 94c, they should be able to deliver $1.42,” Ivan-Alexander writes.
“Apple did a typically über-conservative guidance for Q2, and the stock was train-wrecked by the lynch mob as a result. Apple will earn between $6 – $6.50 this year rather than $5, and approximately $9 in FY09 again the $6.42 expected,” Ivan-Alexander writes. “That’s why its dirt cheap here… Had Apple guided realistically instead, the stock would have been closer to $200 today instead of hitting a low of $126.”
Ivan-Alexander writes, “AAPL is cheaper at $126 relative to its growth than at almost anytime in the last 5 years. Now’s the time to buy.”
Full article here.
[Thanks to MacDailyNews Reader “Macaday” for the heads up.]
