All eyes on Apple next Tuesday; gross margins may be key metric

“Apple’s (AAPL) shares have been getting slammed as Wall Street frets about its March quarter earnings report, due out next Tuesday,” Philip Elmer-DeWitt reports for Fortune.

“Whether the stock bounces from the 16-month low it hit Wednesday or sinks even lower may depend less on iPhone or iPad sales than on its guidance for the June quarter and what it reports about a relatively obscure ratio closely watched by analysts: the company’s gross margin, or GM%,” P.E.D. reports. “‘Gross margins are likely to shape sentiment surrounding Apple’s stock,’ Bernstein’s Toni Sacconaghi wrote in a note to clients Wednesday, ‘as they are key metric underpinning both the bull and bear cases.'”

P.E.D. reports, “In January, Apple management said it was confident the company could report gross margins for the March quarter somewhere between 37.5% and 38.5%. Most analysts expect Apple to come in at the high end of that range. In fact, among the 60 we polled — including 37 Wall Street professionals and 23 amateurs — the median estimate was exactly 38.5%.”

Full article, with a long list of individual sell-side and independent analysts’ estimates for Apple, here.

Related article:
Apple to webcast Q213 earnings release conference call on April 23rd – April 3, 2013


  1. When AAPL hits $ 197 will your song be the same?? I doubt it. The brainless quants and emotionless day traders on Wall Street won’t stop until Steve comes back…. It doesn’t matter WHAT the financial fundamentals are.. OR, Apple dies.

    1. No, long before that point, someone or anyone will use Apple’s assets to buy Apple and drive out the clueless board and CEO! Then, Apple can become Apple again. Unless they let Microsoft, HP or Dell buy it. Then innovation will die for a very long time.

  2. There is no excuse for what happened to Apple’s stock for 7 months. Tim Cook’s and Apple’s management’s silence and lack of action (even some PR or ads) has left all the “patient” investors exposed for the repeated daily, weekly, and monthly decimating beat down. There is more to being a CEO than watching the calendar for the mystery date to arrive to end the delay that the AAPL investors have been told to “be patient” for.

      1. Apple could have taken all those two-year old iPhones they’re selling and flooded places like India, Russia and South America with them. It would have boosted iPhone sales and given Apple some mind share in those places.

        Apple could have taken some of that unused cash hoard and done a bit more hard marketing and advertising just like Samsung is doing. Again, it’s all about mind share. A company shouldn’t just sit back and become a whipping boy for other companies enjoyment.

        Apple could have taken some of that cash hoard and bought itself a search engine and started nipping at Google’s behind in the ad click market. If Google can manage to get hardware with its name on it then Apple can do the same thing with its own search engine business.

        Exactly what signs of hope have investors been getting from Apple. I swear, it appears as though the company is doing nothing. Massive amounts of cash just lying around collecting dust. I can’t get any read from the company at all and I’m sure no one else can. We used to think Apple had some advantage with that cash by buying up equipment and memory in advance, but it doesn’t seem to amount to any advantage at all in Wall Street’s eyes. Apple’s iPhone is not being seen to have any better value than some run-of-the-mill Android smartphone. Apple as a company is being seen as dead money with no future at all.

        Apple needs to try somehow to show it has a tangible future. Other companies can manage to do it somehow, so why not Apple. Is there no way to convince investors that Apple isn’t a doomed company? I’m not all that concerned about the past seven months or so because it’s a relatively short time, but I just wish Apple hadn’t gone down so easily without a fight.

        Do I think I can run Apple better than Tim Cook? No. I know nothing about running a company. It just seems that when a company has so much money to try different things, it just seems like it’s a waste not to try. If Apple’s going out, then they might as well go down while throwing punches instead of just being pummeled to death without a fight.

        Apple couldn’t even stay at the top of the heap for one whole year before it totally collapsed. That has to be some sort of crap record for a top company. That’s just damn disheartening.

        1. Again,
          false premises. Apple is not and never will be about it’s “value” as assigned by Wall Street or Investors. It has always been about making great products, which it still does and leads the industry in making the best smartphones or tablets. Does it own the market in smartphones? No; but does BMW and Mercedes own the car market? The answer is obvious
          So as long as Apple makes great products and leads in innovation, they should be fine. The moment they stop innovating is the moment I will start getting worried. And No, innovation is not a larger screen wrapped in cheap plastic which Samsung is peddling.
          Apple is not a company built on perception based on Wall Street, but one built on making great products. Go read about Steve Jobs’s life

        2. You want Apple to buy a crappy search engine and flood markets with low end phones? Sorry, but Apple doesn’t bing it or bottom feed. I think they hoard cash just so they can safely ignore stupid advice like this from investors and just focus on making excellent products.

        3. “Apple needs to try somehow to show it has a tangible future”

          That is exactly what is l wrong with investors. Spple is doing everything right but they are getting punished for success. Apple does not need to prove anything and that has never been their style either. Apple is concentrating on the long term. Not some stupid PR releases or other idiotic statements of flying cars or self seeing glasses to make head lines. Apple is a widely seccessful company, very profitable in a very competitive market place. They have allot of what other companies need and want in this space, talent, innovation and cash. There is also another thing. I’m happy Apple is not out there defending the company and making stupid statements all the time. First it’s not in their culture. Second there is a rate of diminishing results from efforts like you mention. I think Investors and alike would react less and less on what Apple would do and say and they would lose credibility. Apple have never needed to justify their actions or in-actions. The Street was all the rage when Apple told them to fuk themselves when they wouldn’t disclose information about Steve’s health. Apple is a special company and they do what they do good. No one can really argue with that. So I think that you invest eight them because you agree with them or you sell. I don’t think it would be in Apple’s long term interest to start to please every one more than they already have under Tim. Apple should do more of what Warren Buffet said he would do if he was dealing with someone as Bill Akman “Ignore him” and focus on running a successful company for the long term.

      2. this is what I wrote yesterday:

        Tim Should:

        1) when NYT, WSJ, Forbes etc makes erroneous articles and fake facts the should issue statements correcting them. Yeah they can’t fight back every negative article BUT not fighting AT ALL is crazy.

        when workers threaned suicide at the Foxconn MICROSOFT plant and articles and news clips said Apple (I saw them myself) why didn’t Apple point out it wasn’t Apple? Today many ordinary people (who don’t read geek tech news like MDN) BELIEVE apple is abusing children in its China factories instead of being the top 1% in employee responsibility. My accountant believes it, a smart dude , he reads NYT and WSJ, an ethical person he told me to SELL MY AAPL SHARES !!

        INVESTORS DON’T LIKE COMPANIES THAT DON’T DEFEND THEMSELVES (and therefore their stock investments)

        Note when analysts whacked apple over not having netbooks Jobs went on the attack saying Apple couldn’t build a sub $500 notebook that didn’t suck and current netbooks were piles of junk , flimsy with cramped keyboards etc. He pushed the iPhone as better alternative. (IPad wasn’t out yet but although it was ON the DRAWING BOARDS Jobs didn’t sit back and just wait knowing that sometime in the future he would have product. He went and DEFENDED BEFORE the new product launched. Today too many are saying apple should say nothing and just wait to launch new products… )

        2) Cook shoud Push hard at every opportunity that Apple is doing well and its products are selling. It’s income growth is 60% yet Msft has much higher P.E (14 vs 9) showing that the PERCEPTION of apple is terrible. Goog which is basically making no money off its major initiative of the last 5 years Android ( in fact losing money if you count Motorola losses ) has a P.e DOUBLE appl !

        Goog executives push android as a success all the time . They have Full Time evangelists going round the world saying apple is doing lawsuits because apple cannot innovate. Guy Kawasaki famous former apple evangelist has joined Google!

        If Apple had Goog P.E the stock would be way over 700 now.

        That shows Cook has done a miserable P.R job in convincing investors apple is doing well.

        Jobs took every opportunity pushing the positive apple story. When he was on the cover of Time , Newsweek, All Things D, it was always apple stuff were ‘magical, next great thing’ etc. So much so that people starting calling it ‘reality distortion’ BUT IT WORKED. Apple had the highest positive brand recognition around.

        Jobs knew reporters like Mossberg personally (Mossberg came to his house) and analysts like Bajarin. I bet you if he read something he didn’t like he would be giving poeple the ‘Phone Call’.

        #3) besides P.R what the heck happened to Advertising?

        why no ads for mac mini, iMac etc.
        Macs have 5% market share, iPhone have 30% yet apple doesn’t push it. Msft even with all its problems STILL makes billions of P.C software alone (apple makes more as it makes hardware as well).

        LOOK WIN 8 DUD YET NOT ONE AD AIMED AT IT? NOT ONE MAC OS IS BETTER AD !!! apple used to have dozens of Mac PC guy ads but none now… Mountain Lion is great software but not one ad. Most ordinary folks and the press believes OSX is the same as Windows….

        WIN 8 Vista Dud is a Golden Opportunity for macs to gain significant marketshare ( no matter how many tablets are sold there will still be hundreds of millions of people who need traditionalo PCs) but apple sits…

        Apple ‘missed’ analysts expectations and started its fall from 700 when it ‘missed’ by just $200 million. if It had sold a few more macs maybe it could have made more money and hit the targets and the stock would still be at 700?

        The James Bond movie Skyfall cost $100 m approx to make. Thee film company spent TWICE that on Advertising. The movie grossed over $1 Billion. (If they didn’t spend that ad money I don’t think it would have made anywhere that much.) Lesson : Good Product+ Good Ads and PR= $$$$$$$

        Samsung MAKES FUN OF APPLE in superbowl ads etc for YEARS now and apple does nothing! Some have argued with me that apple shouldn’t attack SMALLER companies .. BUT Samsung sells MORE smartphones than apple (so in that way its not smaller). Take the gloves off, whack them! (samsung spends several times more money in ads than Apple worldwide (go check the charts in,

        4) When an analyst firm made questionable call on Rim Z10 sales Rim CONTACTED THE CANADIAN GOVT and the U.S SEC to investigate! You might not like Rim but in this case I bet RIM PUT THE FEAR OF GOD IN ANALYST FIRMS.

        meanwhile people like Doug Kass , hedge fund owner, on CNBC manipulates apple stock like a yo yo (much worse than the firm with Rim). Kass says apple is doomed because he has inside info of bad sales, he makes money on shorts . then he sheephishly says his info is wrong and we find out he has bought a whole bunch of aapl at the low point . He announces that the ‘truth’ is apple is doing well and he rides aapl up again. And he REPEATS the process with the conniving of CNBC.

        But does apple call the SEC…… nope.
        Multiply Kass a many times with all kinds of other predators.

        etc etc etc
        I can write more but I’ll stop here except for a

        final note:
        Jobs was a PRODUCT GUY true but he was ALSO A MARKETEER and a P.R GUY OF GENIUS. For example look he even spent tremendous effort to make every news conference and product launch PERFECT (down to the lighting and the signage). to think that he ‘only cared for products’ and ‘not image and selling’ is silly.
        since he was teenager he was always hustling and selling.
        Saying that Apple ‘just focusES on products’ is a myth.

        (i used to be an ad pro. ).

        1. Great post Anon C
          The best I have read all year!
          agree with you on all points in terms of Apple needing to protect its brand name. The problem is one cannot replace Steve Jobs at all since he was a product genius, marketing and PR genius also. Doesn’t matter how deep Apple’s “bench” is

    1. Tim Cook should be expected to address all the rumors, FUDs,
      AAPL share price, what Apple’s PR Dept. is doing or not doing.
      Failed to do so, Timmy should consider resigning from his current
      job and just be a Director and leave CEO job to some one else.
      It’s getting absurd what’s news Apple’s getting and company just
      keeping quite for the last several months.

  3. And as they scream in horror at lower margins, they scream in horror that Apple has no low-margin mass market phone. Also, the stock took a beating because the mini was too expensive. Should have had lower margins there too. Next week will be interesting…

  4. Apples value cant be ignored forever. Sooner or later some big investor or institution is going to step in and buy a huge hunk of AAPL and the current will change direction. But i/m beginning to wonder….is Cook even available for comment?

  5. Another bloodbath today. Where the f..k is cook? Step out and comfort your investors. Say or do something to give them confidence, besides saying “be patient”. This is horrible. Is our only salvation the 5s? Is there anything to be excited about they will warrant investors paying a premium for the stock? What is it? China? A TV? A watch?

    1. Comfort my shiny metal @$$. Tim’s job is to run Apple, NOT wallstreet and AAPL. If investors are ‘uncomfortable’ they have the freedom and agency to pull their money and put it somewhere else.

      If they choose to sit, they have only themselves to blame. It’s not Tim’s job to pat them on the back and say “There there, Tim’s here…. Everything will be OK” He has more important things to do at Apple.

    1. Either that or he should stop the secrecy and let investors know that they have plans to save them with new products. I’m sick of the silence. No comment doesn’t fly anymore.

      1. Tim Cook already said new Mac Pros are being released this year and rumors based on bits about the supply chain are always unsound.

        What else can he say besides repeating himself and berate everyone who didn’t listen the first time?

  6. Maybe it would be best if Tim would shut down Apple and give the money back to the shareholders as long as Apple is worth something? It’s like in a ballistic free fall right now

    1. I hope that you are making a Dell joke, “MikeyD,” because your suggestion would guarantee maximum losses to shareholders.

      Most of Apple’s market cap (combined value of all AAPL shares) is associated with its prospects for future revenue and profits. This is true of nearly all companies that are not about to go bankrupt, and concerns about Apple’s future (founded or unfounded) are responsible for the decline in AAPL over the past seven months.

      Although Apple is free of long term debt and has an enormous stash of cash and securities, it still only amounts to about one-third of Apple’s market cap. Shutting down the company would further eat into those reserves, resulting in minimum value to shareholders. SIDAGTMBTTS was a terrible idea when Mikey proposed it, and it is an even worse idea now.

  7. Obscure ratio no, closely watched yes.
    The margins is what everybody is talking about. It is an important metric of a company’s profitability. If we get an iPhone 5S margins will improve significantly. If we got an iPhone 6 they will get under pressure again. Margins for the iPad line will improve with a new mini model.

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