Apple’s 2008 earnings with full recognition for sales of iPhone and Apple TV

“Now that Apple has reported its earnings for the full 2008 fiscal year, I think it’s important for investors to focus on how Apple would have performed if it fully recognized the revenue and earnings from its sales of the iPhone. Apple’s true 2008 financial results have been hitherto veiled under a shroud of financial secrecy that I set out to finally irrevocably uncover since Wall Street analysts apparently cannot do their jobs. Someone needs to put an end to this nonsense and if not the analysts, then it’s up to the investment community to make such determinations on their own,” Andy M. Zaky reports for Bullish Cross.

MacDailyNews Take: It depends on what you think actually constitutes Wall Street analyst’ jobs. In other words, when some of these vermin die, you don’t need to dig a hole; they’re so crooked, you just screw them into the ground.

Zaky continues, “The Apple earnings confusion has largely been the result of Apple’s relatively (un)complicated subscription method of accounting for sales of the iPhone. Most analysts seem to be either thoroughly lazy, or genuinely perplexed by this fairly simple concept; and so I thought I might make their jobs a little easier by reconstructing Apple’s 2008 earnings results to reflect what Apple actually earned in 2008. After reviewing several research notes by analysts for the months of September and October, it doesn’t surprise me one bit that “the analysts are at the bottom of the s**t heap” or “at the lowest level of the investment banking hierarchy” as described by John Rolfe and Peter Troob in Monkey Business.”

“Apple should have determined that analysts would simply be too stupid to give their investors a full and accurate picture of Apple’s true fundamentals. But that is neither here nor there, Zaky writes.

“GOOG trades at 7.18 times its cash position, RIMM at 15.51 times cash, AMZN at 9.15 times cash, MSFT at 9.13 times cash, CSCO at 3.62 times cash, IBM at 10.96 times cash, INTC at 6.54 times cash, and HPQ at 5.15 times cash. What is more, only GOOG, AAPL and MSFT have no debt of the companies mentioned above. Apple has the largest net cash position than any of those companies and Apple has more net cash than RIMM, GOOG, AMZN and IBM combined,” Zaky explains.

The full article — highly recommended — in which Zaky presents tables that clearly explain “what almost no analyst has dared to show their clients regarding the reality of Apple’s earnings results in 2008” is here.

[Thanks to MacDailyNews Reader “Scott R” for the heads up.]


  1. All the anal cysts are probably too embarrassed that they downgraded Apple at some time in the last year, including right before or after the quarterly earnings report.

    Even here in Philly I heard a collective “D’Ohhhh!” coming from the vicinity of NYC.

  2. This guy goes through this huge analysis which is interesting, but it’s much easier than this. Apple generated $9.1 billion free cash flow (which is true earnings that they banked) in 2008, so you have an entity worth $90B, with $25B cash, and $9.1B historical earnings. This means you can buy Apple at the grand price of 7X historical in the bank earnings. Huh? This stock used to trade at 25-30X earnings. This yields a stock price somewhere around $250-300….but no one cares in this environment. That’s why you need to accumulate shares and then be patient.

  3. Apple is one of the most volatile stocks large cap stocks around. People trade it like they were in Vegas. It’s hyped up, then dragged down and most of the time there is not sense in the stock. I truly believe that there is some collusion going on with aapl. Brokers play the up and down game for their own profit. They know when or even instigate large drops and gains to profit from it.

    Here’s an interesting thought. Several years ago M$’s revenue and profit dwarfed Apple’s. Now Apple is earning 66% of M$. That’s a huge change and really does demonstrate how much Apple have caught it.

    I wish I could buy more appl. They are hugely undervalued. Mkt cap is 2.5 less than M$. One thing the article did not mention is that as time goes on Apple’s revenue will increase more than expected since they will be including revenue from iPhone sales from the previous two years. Currently they only add on ~ 1 years sales during which time ~5M iPhones were sold.

    Once the brokers ger together again they will pump Apple up high. Give it time.

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