Zaky: Apple should blow away consensus, again

Invisible Shield for Apple iPhone 4!“An early analysis of Apple’s Fiscal Q3 2010 seems to indicate that Apple (AAPL) is on tap to significantly beat analyst estimates yet again,” Andy Zaky writes for Seeking Alpha. “Last quarter was one of the biggest blowouts I’ve ever seen Apple report, and if major upward revisions don’t start rolling in, it appears that Q3 can give investors another staggering halt-trading type blowout.”

“The current consensus estimates as published by Thompson Financial apparently do not in any way contemplate sales of the iPad,” Zaky writes. “Seasonally speaking, Q2 is generally Apple’s weakest quarter and so naturally one would expect Q3 to outperform. And while the consensus does in fact reflect this point in the revenue estimates, analysts seem to believe that Apple will see a sequential decline in EPS from earning $3.33 in Q2 to $2.98 in Q3. Something I find to be highly unlikely unless we see a massive collapse in Apple’s gross margin. Yet, even though the bump up in the consensus revenue estimates from $13.499 billion in Q2 to a forecasted $14.37 billion in Q3 contemplates a more favorable seasonal quarter, it doesn’t seem to take into account the 3 million iPads Apple is likely to sell this quarter, and the 9.3 million iPhones that Apple is on track to sell as a result of massive demand for the iPhone 4.”

Zaky writes, “After a cursory look into Apple’s Q3, I’m looking for Apple to report earnings of $3.78 on $15.371 billion in revenue versus the consensus of $2.98 in EPS on $14.730 billion in revenue. That’s a $1 billion beat on the top line, and an $0.80 beat on the bottom line.”

Full article here.

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


  1. I think I’ve heard this story somewhere before about some earnings report of some kind from some analyst somewhere… like every quarter for the past five years or so ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  2. And yet, even this morning, the talking heads do not believe that Apple can blow away the numbers anymore because they are getting to big. Idiots! Once again, the lines will be wrapping around the buildings this week and now pre-ordered products are 2 to 4 weeks backlogged. About 3 out of 4 student will be walking into their Freshman year with a Mac and maybe an iPad.

    Yes, “Apple should blow away consensus, again”, and again, and again!

  3. You know, these talking heads have know idea about the billion dollar server farm that Apple built or what Apple is about to do with it. What did Apple need with 400 to 500 percent more server capability. It is like they are sitting on the beach and watching the sunset (of old technology companies) and the tsunami is rushing at then and only minutes away! Enjoy the view.

  4. @almux

    Splitting the stock doesn’t do much. An argument can be made that splitting shares creates more volatility in the stock. People for the last two years seem to be fixated on shares being split, but I think that’s outdated thinking.

    In the past when you had to go to a broker for shares, you generally had to buy in round lots of 100. That makes a 270$ stock pretty pricey, thus a split was more favorable to smaller investors.

    Now with electronic stock purchasing, you can buy 50, 10 or even 1 share if you wish.

    If I bought one share today at 270$ and Apple split it 10-for-1 tomorrow, all that means is I could have bought 10 shares tomorrow, but the very nature of a split means I would still have the exact same value today as I would have tomorrow. It doesn’t give you any more value just by splitting the stock.

    Bottom line is, splits aren’t that big of a deal.

  5. That would put Apple on pace for a $60B fiscal year, and almost $15 a share in profit. HUGE! That’s a big increase over $43B and $9 a share from last FY. It’s unprecedented for a large company to keep growing at that rate.

    For some context, Microsoft had revenues of $58B last fiscal year.

  6. splits are a big deal because of the perception. nobody wants to buy one or two shares, they want to buy a bunch. the price does make a difference in other ways too, otherwise companies wouldn’t sell stuff for 99¢, they would just sell it for a $ and technically increase their profit.

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