“The current GAAP 2010 earnings consensus for Apple (AAPL) is $6.85. Assuming Q4 iPhone sales of 8M to 11M, Apple will close out FY 2009 with somewhere between $12B and $14B in deferred iPhone revenues. This equates to somewhere between $3.64 and $4.02 in deferred GAAP EPS to be realized in 2010,” Stefan Sidahmed writes for Seeking Alpha.
“For argument’s sake, let’s say Apple sells 9.5M iPhones in Q4 2009. This equates to $3.85 in deferred earnings to be recognized in 2010 and $1.75 in 2011. These earnings are already booked. The iPhones were sold in 2008 and 2009,” Sidahmed explains. “This means the analysts, on average, are expecting Apple to earn $6.85 – $3.85 = $3.00 in new earning in 2010 from iPods, computers and iPhones.”
“To generate $3.00 in EPS Apple needs to sell about $26B in iPods and computers in all of FY 2010,” Sidahmed writes. “In the first 3 quarters of 2009 alone they have sold $26.7B in non-iPhone products, so this doesn’t seem like much of a hurdle… I don’t know what the analysts are looking at.”
Sidahmed writes, “To sum this up: Under current GAAP rules, for Apple to meet analyst expectations for 2010 they only need to sell as many computers and iPods as they did in the first 3 quarters of 2009. No iPhones need to be sold to meet analyst expectations… Even after more than doubling from less than $80/share to over $180/share, Apple can still double – again.”
Full article here.