Asymco estimates Apple’s Q318 earnings per share

Horace Dediu writes for Asymco, “Three months ago Apple provided the following guidance: ‘As we move ahead into the June quarter,[…] We expect revenue to be between $51.5 billion and $53.5 billion. We expect gross margin to be between 38% and 38.5%. We expect OpEx to be between $7.7 billion and $7.8 billion. We expect OI&E to be about $400 million. And we expect our tax rate to be about 14.5%.'”

Dediu writes, “If we aim for a revenue figure close to the upper end of the range ($53.2 billion) and insert all the other figures (split the difference for OpEx) then the company’s fiscal third quarter looks as follows:”

• Revenues: $53.2b
• iPhone (units): 43.2 million
• iPad (units): 11.6 million
• Mac (units): 4.3 million
• Services ($): 9.5 billion
• Other products ($): 3.5 billion
• Gross margin (%): 38.6%

• EPS ($): $2.26

How Dediu arrived at that EPS figure is explained in full here.

MacDailyNews Take: As always, the amount and timing of Apple’s massive buyback program during the quarter is the great unknown.

Reminder: Apple’s Q318 results are scheduled to be revealed on Tuesday, July 31, 2018, at market close. Check our homepage right around 4:30pm EDT for the results report.

6 Comments

  1. Using the average percent of YoY share count reductions I come up with $2.24 EPS. Not as aggressive as Horace’s estimate but still showing YoY growth of ~35%.

    1. 2.24..vs 2.26 ?

      No matter.. if true..thats massive growth … deserving of PE above 20 To 25 . ….
      But doubt if the market has that kind of condidance in Apple yet !

      1. Apple’s P/E isn’t terrible and even 20 would be nice, however that’s not my complaint. What really pisses me off is Microsoft’s P/E of freaking 75. It’s really crushing how Wall Street values Microsoft that much above Apple. With that kind of liberal value it’s no wonder there are so many companies that are being considered to break a $1T market cap.

        Is Apple really doing that poorly as a company compared to other major tech companies that Apple’s P/E doesn’t even come close to them? Why is Apple seen as being so weak compared to those other companies? It’s almost as though Tim Cook is seen as being like Steve Ballmer was for Microsoft. It just seems almost unfair why other major tech companies are easily given such fat P/Es and Apple is always excluded. I’m certain if Apple were to start a bundled streaming video and music service, revenue would definitely get a decent boost. Don’t investors even have enough confidence in that possibility? It’s not that far-fetched.

        Look at how high Spotify (with an EPS of -9.xx) is being valued and that’s just insane based on Spotify’s past financials as a company. I’m honestly more puzzled than pissed because I keep trying to compare Apple’s fundamental figures with other major tech companies and I honestly don’t see where Apple falls so short in value of those other companies. Lack of confidence is impossible for me to measure in terms of a company’s value but it sure must be a huge factor for Apple.

        1. Mind boggling indeed..
          IMO. Some valuations out there are whacked out ….. and kind of scary to me….. But it is what it is.. ..

          I like to see a pe of 20-25 for Apple if Apple can Deliver 30% ish growth ..
          Yet if it goes to ridiculous levels.. i would be scared to continue my investment .

  2. Hmm. I never like this kind of work. I read his analysis. While he’s one of the better ones, he’s more or less picking a number out of a hat, and going from there.

  3. The P/E reflects what people, not Wall Street in particular, think about the future growth of the companies sales and profits. If you think that Apple’s grown about as much as it cannwith slowing smartphone sales around the world, that it’s iPad growth has effectively ended, it’s mac growth too has effectively ended, and that growth from other sources are not that important,mathematical you’ll think the company is basically stalled. So the P/E won’t be that high.

    With Microsoft, sentiment these days, with Nadella running the company, has turned around, Microsoft is growing well again, and its cloud services are growing strongly, as are its application subscriptions. So it’s P/E is high.

    All of this can turn around. It’s not fixed in stone.

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