UBS: Apple’s quarterly results unlikely to help stock next week

In a note to clients, UBS analyst Steven Milunovich provided his revenue estimate of $75.6 billion for Apple’s Q116 (December quarter) is below the analysts’ consensus and also near the low end of the company’s guidance.

In October, Apple provided the following guidance for its fiscal 2016 first quarter:
• revenue between $75.5 billion and $77.5 billion
• gross margin between 39 percent and 40 percent
• operating expenses between $6.3 billion and $6.4 billion
• other income/(expense) of $400 million
• tax rate of 26.2 percent

Milunovich’s low estimate is due to an in-line iPhone unit forecast of 75 million units, but a lower forecast for average selling prices (ASPs). The analyst doubts that Apple’s Q116 report will help the company’s stock price and expressed the belief that the current issue hampering shares is the timing of product upgrades.

The analyst also said investors seem too bearish on the company’s product pipeline while reiterating his “Buy” rating and $130 price target on Apple shares.

MacDailyNews Take: We’ll find out for sure next Tuesday at the closing bell.

SEE ALSO:
Apple to release Q116 earnings, webcast live conference call on January 26th – January 5, 2016

19 Comments

  1. So Apple decides to focus and expand more on software and services that are the crux of Apple’s DNA, while maybe slowing down some the frequency/cycles of hardware spec refreshes (which wall st. dismissed ‘anyway’ as insignificant one trick pony moves) and now that warrants more complaining in dumb dumb land…

    Yep, makes as much sense as Donald Trump…

    1. Hey Trump would fix the Apple repatriation of cash problem, the dividend would be much higher…..the Market would be much higher etc etc……
      The ANALists would continue to complain of course….

      Yes and Commraddddd Bernie’s 90% tax rate would definitely stimulate business growth, just like the last 7 years……………….oh wait?!

    1. That is certainly what’s going on right now! I’d call this yet-another scouring of money out of the economy, this time via utterly insane FUDing and resultant selling off of even the very best stocks on the planet, such as AAPL. Meanwhile, the bubble stocks become ever riper for wipeouts. Hello GOOG and AMXN. ∑ = lunacy. Hang onto your AAPL for the sanity correction.

  2. This is a perfectly clear example of why there is a total disconnect between Apple the company and AAPL the stock.

    Whatever Apple reports, certain analysts will find a way to see the cloud in Apple’s silver lining.

    If any aspect of Apple’s performance is less than stellar, it will be all doom and gloom. If iPhone revenue remains strong, Apple will have become too reliant on iPhone, but if the iPhone revenue ever reduces then it would be declared to be the end of the world. If Apple has even more billions of dollars of cash in it’s coffers, that will be regarded as a problem. When Apple releases a new product, it’s an uncertain future. If Apple doesn’t release any new products, that would also lead to an uncertain future.

    1. Obviously, Mr.Market has a missions bashing Apple 366 days out of a year, regardless how great Apple is doing. Why Mr.Market wanted to blow smoke and mirror, endless rumors and negative articles in a great company?. Simple, he sends the signal for a long while now that, he wants his own people running the company.

  3. The market needs to get a grip. Everyone is fretting about the oil industry not making enough dough since none of the producers are willing to cut production.
    This insatiable greed is killing the market. Sure the oil industry is not making as much money but is that really enough cause to drop all stocks. We all know that cheaper oil makes it cheaper to make and move goods. So less profits in oil and more in other industries.
    Same thing with Apple. They are making more profits than any other company in the world but the market is not happy with that. Get a grip. They are taking over the consumer market for PCs (where the money and profit is) and own most of the profit in tablets and smartphones.

  4. my suggestion is to relax. the collective gnashing of our teeth isn’t going to change anything.

    the price will go back up, eventually but i strongly suspect it will go down even further first. so be ready to buy, but wait a while yet.

    there are much larger macro economic forces at play here than simply apples sales can influence.(at least to our satisfaction or desires)

    once it rebounds it will alleviate your concerns of the moment.

    but… you may well want to reconfigure your expectations on the stocks future performance – as i have, (having gotten in in the $10 per share days of yore). the go-go growth days are over, yes the law of large numbers actually works (though not necessarily in our favor)

    apple is, whether we like it or not, transitioning to a hold and dividend company, so be ready to buy up as much as you can as it bottoms out and harvest those dividends in the coming years,…. plus, as the stock does rebound you will also build value, but it ain’t gonna be like the good old days.

    still and all apple is a good investment, one to stick with.

    1. I think Apple growth will continue unabated and will not simply be a “hold & dividend” company. The thing to remember is these things are cyclical until the next big thing. Once again it seems as it did at the turn of the 20th century with “all the things that CAN be invented, HAVE been invented” until proven laughably wrong, again. Apples best days are ahead of it.

      1. i will be delighted to be proven wrong – and have no doubt that apple will rebound and increase in value again, at a modest pace — but i am not betting on things returning to rocket mode.

        but as things sink i will continue to buy more stock and, in turn, benefit from the thousands of dollars in dividends that accrue on an annual basis.

        either way it is a can’t lose investment. i have just readjusted my expectations, but not abandoned hope of much better times to come.

  5. “The only thing that changed is everything” was the tagline for the iPhone 6S. Which equals: “You and everyone in the world will think there’s nothing interesting about this phone. But they’re wrong. It really IS interesting. Swear.”

    Now I did buy the 6S. I use my phone sooooo much it’s worth it to me to have the fastest and newest. But I wouldn’t be surprised if many people looked and said, “Meh”.

    Indeed, I’ve seen more iPhone 5’s in the wild lately than I would ever have expected.

    Time to kick it up a notch, Apple. Upgrades are slowing as the products near shark-jumping territory. “The only thing that’s changed is everything.” lol

    If iPhone 7 is “Look Ma, no bezel” that’s not going to blow off the doors either.

    At home we still use the original iPad Mini and never blink.

    Could be a sllooooow few years, people. Time for something truly compelling to justify the world’s largest company.

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