Enough GOOG squabbling. AAPL earnings time.

[UVaOK]

So, being the short-term investing (OK, fine, speculating) chicken I am, I closed out my long AAPL at about $145 today. I usually don't like to hold my shorter-term plays during earnings announcements (especially when already sitting on a nice profit), but, from what I've been reading today about the exceedingly lucrative nature of the actual at&t iPhone agreement, it sounds as though everyone thinks earnings won't cause a Google repeat.

Any thoughts on whether I should get back on the AAPL train?

[theoldwizard]

Originally Posted by UVaOK

So, being the short-term investing (OK, fine, speculating) chicken I am, I closed out my long AAPL at about $145 today. I usually don't like to hold my shorter-term plays during earnings announcements (especially when already sitting on a nice profit),

Apple options are going to pay for my daughters wedding this fall. And being my only daughter, she and my DW are "doing it up big !"

But, I too expect AAPL to pull back some especially short term. ("Buy on the rumor, sell on the fact")

...but, from what I've been reading today about the exceedingly lucrative nature of the actual at&t iPhone agreement,

Yep, what a deal ! $3/month kick back plus $8 for new subscribers. That plus the cost to manufacture an iPhone is pegged at $250-$275. Steve Jobs is a money making machine !

Any thoughts on whether I should get back on the AAPL train?

Stephen Coleman says "I truly believe that Apple will be the first company to achieve a market cap of one trillion dollars."

Piper Jaffray analyst Gene Munster has picked a new target price of $205

I never left Apple !

[Texas Proud]

Originally Posted by theoldwizard

Stephen Coleman says "I truly believe that Apple will be the first company to achieve a market cap of one trillion dollars."

Piper Jaffray analyst Gene Munster has picked a new target price of $205

I never left Apple !

Hmmm... Apple selling at 45x... down a bit today... and market cap of $128...

I think Stephen is smoking something if he thinks it will be the first trillion company...

some of the oil companies and banks make what Apple makes this year next quarter...

[kcowan]

I expect a pullback this quarter. Then the hype may resume. But they have to catch up to those sky high PEs and so it will be 3Q numbers that fuel any further growth.

We still hold 25% of our original ($13) stake.

[ERD50]

Tough to say (or we'd all be super-rich!). There is a lot of expectation built into the current share price, obviously. However, there also is a lot that is not counted.

The numbers I've seen thrown around are more like $8/month to Apple over the contract, and $200 signing bonus from T to Apple for a phone sold by Apple.

Also factor in the increased traffic to Apple stores, the 'halo effect' from not just iPod, but now iPhone (Mac computer sales have been up faster than overall market). Most of the current line-up of Macs is a bit 'long-in-the-tooth' ready for upgrades. Leopard is due in October. iPods are due for an update, and there will probably be high-end iPhone-like video iPods for big bucks. And, there are a lot of expectations that Apple will come out with a smaller iPhone-nano w/o web browser and such. That could be a real high volume seller - good for anyone that wants a combo phone/iPod, but doesn't need all the bells/whistles of a $500 iPhone. If your kid wants a $150 iPod nano, and needs a phone, why not throw in $100 and get a combo unit?

And i expect (at least hope) that all that 'multi-touch' stuff in the iPhone will be available in Leopard. Maybe with an add-on touch-pad?

The drop today was kind of crazy (I say 'kind of' only because the fast rise has been kind of crazy). People were confusing the 146,000 'activations' by T with 'sales' by Apple. Heck, the phone was only on sale for less than 30 hours in the Q. And sales on-line would not be received fast enough to get activated by EOD June 30th. And, T had problems supporting the activations. And, a bunch of people bought them as gifts, so they didn't activate them right away.

It is the long term handling of this that will count, not 30 hours of sales. And Apple has been handling things quire well since Steve Jobs is back at the helm.

Compare Apple's market Cap to Dell, or GM or F or MOT. You might be surprised. You can add some of those together and AAPL is still bigger.

-ERD50

[ERD50]

Originally Posted by kcowan

I expect a pullback this quarter. Then the hype may resume. But they have to catch up to those sky high PEs and so it will be 3Q numbers that fuel any further growth.

We still hold 25% of our original ($13) stake.

Yahoo lists the forward PE as ~ 32x. High yes, not sure I'd cal it sky-high though.

I wish I had held more of what I bought at rock bottom prices. Sold and traded much of it along the way. No complaints though.

-ERD50

[Texas Proud]

ERD...

My point is that to get a market cap of $1 trillion, you need to be making REAL money... and at that level you are not going to be trading at 43 or even 32X...

I am not saying it is bad (even though I think it is way overpriced), but that getting from $100 some bill to $1 trill will take a lot and I don't think it will happen with this stock anytime soon... and there are many more that would get there first...

XOM only needs to double (with a 13X)... C is 4 times (12X).... AAPL is 9 times with that 43X...

[ERD50]

Originally Posted by Texas Proud

ERD...

My point is that to get a market cap of $1 trillion, you need to be making REAL money... and at that level you are not going to be trading at 43 or even 32X...

I am not saying it is bad (even though I think it is way overpriced), but that getting from $100 some bill to $1 trill will take a lot and I don't think it will happen with this stock anytime soon... and there are many more that would get there first...

XOM only needs to double (with a 13X)... C is 4 times (12X).... AAPL is 9 times with that 43X...

No argument on that one. I think Apple may do very well, but I'm not counting on any trillion dollar market cap (outside of reasonable growth and long term inflation). Heck, a billion dollars used to be a lot of money

-ERD50

[utrecht]

I hope you didnt sell your AAPL

[UVaOK]

Originally Posted by utrecht

I hope you didnt sell your AAPL

Nothing wrong with selling at $145, getting back in at $137 two days later and watching it hit $150 after hours. Who says there's no money in momentum?

[ERD50]

Originally Posted by UVaOK

Nothing wrong with selling at $145, getting back in at $137 two days later and watching it hit $150 after hours. Who says there's no money in momentum?

Yep, one could have bought/sold several times in the past few days (and AH). I did sell puts on some dips, and sell some calls on the rise.

I think I did good, only time will tell.

-ERD50

[theoldwizard]

iPhone sales were no where near what was predicted (for the 2 days in the reporting quarter) but iPod and Mac sales still "brought home the bacon" !

Apple is still projecting 10M iPhone sales by the end of 2008, which I think is very achievable. Don't look for iPhone V2 until middle of 2008.

[ERD50]

Originally Posted by theoldwizard

iPhone sales were no where near what was predicted (for the 2 days in the reporting quarter) but iPod and Mac sales still "brought home the bacon" !

There are/were a lot of bad numbers and predictions being thrown around about iPhone sales. Analysts were throwing out some high numbers, some from 200,000 to 500,000. Now, it was not always clear if they were talking the sales in the quarter (6PM Friday to Midnight Saturday), sales for the Weekend, or sales for the first week. If for the Q, remember that is only 30 *hours* if you assume that all the stores were open 24 hours a day (they were not). It is also unclear if they were including sales made on-line, So, a *lot* of unknown in that range of estimates.

FIRST - On Tuesday, AT&T said there were 147,000 *activations* in that 30 hour period. Which means you needed to buy the phone and get it activated (at home through iTunes) before midnight Saturday. AT&T had issues with about 10K activations, which got delayed. Some people bought iPhones as gifts, so they would not activate immediately. Some bought to resell. Some even waited to hear feedback from other users, as you could return an unopened box with no restock fee.

SECOND: Yesterday, Apple confirmed they had sales (NOT including on-line sales) of 270,000 units in 30 hours. So, I think the only people 'disappointed' in sales were the ones smoking something when they came up with the estimates.

But it is true, Apple recorded very little actual profit this quarter in those few hours of iPhone sales. They are deferring a lot of the profit across the two year contract period. I think they are doing this partially to try to level out their revenue stream.

AAPL UP $10 this AM

Apple market cap is closing in on being 2X Dell market cap. And in 1997, Michael Dell told Steve Jobs to close the doors and give the cash back to the shareholders...

-ERD50

[kcowan]

Apple stock surges as Mac, iPod and iPhone drive earnings - MarketWatch
Apple reported a 73% increase in fiscal third-quarter profit due to growing sales of its flagship Macintosh computers and iPods.
Revenue advanced 24% to $5.41 billion from $4.37 billion. Gross margin widened to 36.9% from 30.3%, or 92 cents a share. Thomson Financial expected Apple to earn 72 cents a share on $5.29 billion in sales.
Apple sold 1.76 million Macintosh computers during the quarter, a record for Mac sales in one quarter and up 33% from the year-earlier period. Mac sales included 1.13 million MacBook and MacBook Pro notebook PCs and 634,000 desktop Macs.
IPod sales climbed 21% from a year ago to 9.8 million units.
Apple said it sold 270,000 iPhones during the one-and-a-half days the devices were on sale during the quarter.

AAPL shares recovered from their recent swoon from 143.70 to 134.89 and is currently trading in the 146 range. The recent swoon was prompted in part by AT&T reporting a low number of activations in their latest quarter. But it was widely reported that the lack of prompt activations was AT&Ts problem.

[theoldwizard]

Apple has yet to confirm (at least I can't find it on the 'net) that there is any "revenue sharing" (i.e. kickback) going on between AT&T and themselves, although most analyst believe that there is an agreement (as do I).

This is "money in the bank" !

[terminator]

Originally Posted by ERD50

Apple market cap is closing in on being 2X Dell market cap. And in 1997, Michael Dell told Steve Jobs to close the doors and give the cash back to the shareholders...

Really? That's classic!

I've owned AAPL and DELL since 1991 (sold most of the DELL in 1998 and half of the AAPL last year at $75).

AAPL's renaissance has been simply unbelievable (to me). I remember some years in the 90's wondering if they would go broke.

Funny, I was going to sell my AAPL back in the early 00's, but couldn't find the certificate. By the time I did the iPod had happened. So having instant ability to buy/sell in a Fido account may be overrated.