Piper Jaffray: Apple positioned to outperform its own margin guidance

“With Apple’s September quarter having come and gone with the only major product transition consisting of slightly cheaper iPods, investment bank Piper Jaffray believes the company is once again in a position to outperform its own margin guidance despite widespread concern,” Katie Marsal reports for AppleInsider.

“The Cupertino-based company during a conference call in July guided its September quarter gross margin down 330 basis points sequentially to 31.5 percent, citing expected impact from a mysterious product transition, a full quarter of back-to-school promo sales, and a one time true-up with a manufacturing partner,” Marsal reports.

“The lower-than-expected guidance was of immediate concern to investors, but as analyst Gene Munster points out in a new report Tuesday, the quarter has since ended and none of the company’s actions seem to warrant such a drop-off in margins,” Marsal reports. “‘Apple cited new, lower-margin products, but the only new products announced in the September quarter were new iPod nanos with higher capacities at the same prices and a 23 percent price cut on the iPod touch,’ he wrote. ‘Considering the decline in NAND Flash pricing has been at least in-line with typical seasonality, it is unlikely that these changes will result in a greater than average sequential GM decline.'”

Marsal reports, “In other words, Munster believes the falling cost of NAND flash memory — historically the most expensive component used in iPods — will offset any reductions in the retail price of the players instated by Apple… Munster said he remains confident in his September quarter gross margin estimate of 32 percent.”

More in the full article here.


  1. Because of Apple’s healh(and I don’t mean Steve), the hedge funds use AAPL to level out the portfolios of all the other tanking stocks that are not as healthy as AAPL, praying that later when everything goes up, AAPL will also. No matter what kind of numbers Apple puts up, the stock is going to go down, mostly because of guidance for the Christmas quarter.

  2. How many people have posted that it is not the past quarter but the next quarter. So Apple continues to have a great “next quarter” and the stock goes down anyway. The little guy doesn’t have a chance against those shorting. They have corrupted the entire market. May all those billionaires become millionaires and the millionaires end up working at McDonalds.

  3. The Shorting of Apple Stock has driven the price way way down.
    in the under $100.00 bracket Apple stock is in the exceptional value range. The Shorts know that the slightest bad news drops Apple Stock if some block are sold off. So, they wait place some negative rumor in the press or with their analyst henchman, let it hit the street (aka Internet) and then they place some naked sell orders, as they don’t control any AAPL Stock at the time. Then they wait till the bottom and buy some to cover their naked positions at a bargain price. Settle the naked trades, collect the cash and walk away with the profits.
    AAPL as suffered so many of these short sale raids that long position investors are very, very nervous about investing in AAPL stock. I’ve held a lot of AAPL for a long time my one bit of advise to investors in AAPL or any stock is simple.
    A good value stock
    1) if the company has a good balance sheet
    2) is in a leadership position in their industry
    3) is in a growing industry
    4) is in an industry that has many segments
    5) is diversified (even within the same or related industry)
    After you buy
    Buy the stock at a value price and hold it. Do not watch the price daily, hourly… Unless your thinking of buying more.
    Do not listen to rumors and never ever sell based on a rumor.
    Keep in mind the target selling price you want for that stock, if it’s not selling for that price keep it, so, if you want $200.00/share keep it till it hits $200.00/share.
    So, if you were to buy AAPL at $100.00/share and sold at $200/share the $100.00/share capital gain would be outstanding.
    If the stock market makes you nervous then you want to stay away from AAPL and some others.

  4. Round up all these analysts and let the investors have their way with them!

    Why do people listen to some asshole who can’t even be bothered to do some due diligence on a company before they spew some garbage and short the stock price!

    They can join the lawyers in a tie for overall scumbag award.

  5. Be prepared for a margin shock on October 21. Why? Only 12.5% of all iPhone revenues in the quarter are recognised, 87.5% are deferred to the forthcoming seven quartes while 100% of the costs of all iPhones sold this quarter are booked into the p/l-accounts. Because of the outstanding number of iPhones sold in the quarter this will stress the margin painfully. I wonder how Peter Oppenheimer is going to handle this probelm.

  6. ” Because of the outstanding number of iPhones sold in the quarter this will stress the margin painfully. I wonder how Peter Oppenheimer is going to handle this probelm.”

    He already said in the last earnings call that margins were going to be substantially lower in the upcoming quarter.


  7. Deferring the iPhone income is going to be a benefit as consumer spending declines due to the current economic condition. AAPL’s outlook is still strong compared to it’s competitors and the market in general.

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