Last week we saw blowout earnings for Q3:15 from Amazon, Google and even
For calendar Q3 (Apple FQ:4), Wall Street analysts are expecting Apple to report earnings of $1.88 per share on revenues of $51.1 billion. Numbers for the September quarter matter very little except for headline shock or awe (dismay or pleasure). What matters is how the company guided for the December quarter and currently the sell-siders are modeling earnings of $3.21 per share on revenues of $
Let's look at some of the key headlines on Apple just from last week:
- Tim Cook says that Apple Music has 6.5 million paid subscribers and 8.5 million still in trial and that the new Apple TV box will be available this week
- FBR says Apple Music "Off to a Solid Start" (maintain Outperform on the shares)
- Canaccord says that Apple maintains strong high market share in smartphones despite overall slower growth in the segment (Price target $160 per share)
- Carl Icahn (Uncle Carl) says that he hasn't sold a share of Apple but wishes it had pulled back more so he could add. Doesn't comment on whether he did add.
- Citi removes Apple from it's Focus List but maintains a Buy with a $145 PT (CYA tactic by Jim Suva..removed from Focus list so if they disappoint he can say, "I told you I removed it from the Focus List"..maintains buy so if numbers pop the stock he can say, "I told you it was a Buy")
- Susquehanna lowered his expectations for iPhone sell through but reiterated his positive rating on the company shares with a PT of $155 per share. (pulling a Suva-heads he wins, tails we lose-total CYA)
- Maxim upgrades the shares to a Buy from a Hold with a $167 price target
- Morgan Stanley says that Apple is still its Best Idea and maintains an Overweight Rating with a PT of $162 per share.
A couple more points to note going into Apple earnings on Tuesday are as follows:
Interestingly, Carl Icahn called for more buybacks from the company which I think is meaningless even if Apple makes an announcement. After all is said and done is allow for even more transfer of wealth from shareholders to management pockets as a majority of buybacks are offset by massive dilution via management stocks options vesting and stock grants explained by management as "talent retention".
Pandora absolutely imploded when it reported numbers last week which is a tee for Apple Music if not an outright validation of the adverse effect Apple Music had directly on Pandora subscriber losses (Pandora lost 1.3 million subscribers sequentially in the September quarter versus the June quarter). Management said that the adverse effect of Apple music will be "short-term" although the proof of that remains to be seen. Incidentally, if Pandora management believed what they ere saying, why then did they lower revenue guidance for the December quarter?
As far as unit breakdown forecasts for the September quarter for various major Apple products the range is pretty wide and as follows:
- iPhones estimates range from 46 to 49 million units with an average consensus of 47.7 million units
- average of 5.7 million Macs with a range of 5.1 million to 5.8 million
- average of 10.2 million iPads with a range of 9.8 million to 10.4 million
Approximately 10 points lower than where we are here I had stated that the risk/reward in being long Apple was changing in favor of being long. Take a look at the following from just a little more than a week ago:
"Like I have said in recent articles, it’s now getting close to the time to unwrap hedges/dark side positions on Apple which is what I have begun doing in the last few days although selling weekly calls is still the way to continually lower entry costs."
I know I have a lot of links to prior articles in this one but it will give all of you an insight into positioning on just not Apple but pretty much any other investment, be it long or short.
After all its very early Sunday morning and there is still time for the Bills versus Jaguars game to kick off in more than 4 hours which will be globally live streamed via Yahoo for the first time in NFL history.
(I am long Apple, Google, Amazon, Yahoo shares in addition to long and short options on the first three)
