“Apple reported earnings last week and brought back the ‘wow factor,'” Matt Lew writes for Seeking Alpha. “Since AAPL revised its guidance methodology in January 2013, when it reported its fiscal Q1 2013 earnings, it has failed to deliver the blowout results investors had come to expect for so many years. That all changed on Tuesday. In particular, from a forward-looking perspective, I believe it is always important to look at the channel inventory numbers and well as commentary provided by management.”
“AAPL actually drew down its channel inventory during the quarter by 200,000 units. It is not a significant number, but it confirms that AAPL exited the quarter with a backlog of demand,” Lew writes. “That demand, as indicated in commentary, was subsequently met and in-balance during January. The 200,000 drawdown is in contrast to the last holiday period where AAPL actually increased its channel inventory (build) by one million units.”
“The changes in these channel inventory amounts actually mask a larger growth in year-over-year unit shipments than reported,” Lew writes. “The underlying sell-through growth, after accounting for channel inventory changes, was actually 49.3%, compared to the reported 45.9%.”
Read more in the full article here.