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A Review Of The Accuracy Of Last Quarter's Apple Earnings Notes

Reggie Middleton's picture




 

 A subscriber convinced me to post the 1st quarter's valuation bands (subscribers, see Apple Margin & Valuation Note 03/15/2012) for
Apple to squelch the comments of those who are guessing what's behind
the firewall. Our base case scenario was right on target, and  during
the target and after the earnings release I realized that we
underestimated international (especially Asian) sell though and shifted
the weight to out optimistic band which also proved fairly accurate. As
all can notice, the pessimistic band is not show, and that is where the
value lies here. I am not shifting my bias towards (that's towards, not to) the
pessimistic band, for I feel Apple has now started to feel the
competitive and margin pressures that I warned of, and has done so right
at the deadline that I gave in 2010 (this is just as much a factor of
luck as it is skill, alas, if it bears fruit it bears fruit). The latest
valuation bands can be accessed by paying subscribers below (click here to subscribe):

Apple 4Q2012 update professional & institutional
Apple 4Q2012 update - retail
"iPhone Margin worksheet - blog download

image005 image005

Keep the following in mind as you peruse this post...

apple product chart growth apple product chart growth

This the BoomBustBlog quarterly update analyzing the info released after Apple's Q1 release. Let me know how prescient you think we have been come the 3rd quarter of the same year.

Apple 2Q2012 results analysis Final - redacted Page 1Apple 2Q2012 results analysis Final - redacted Page 1

Apple 2Q2012 results analysis Final - redacted Page 2Apple 2Q2012 results analysis Final - redacted Page 2

Apple 2Q2012 results analysis Final - redacted Page 3Apple 2Q2012 results analysis Final - redacted Page 3

Apple 2Q2012 results analysis Final Page 4Apple 2Q2012 results analysis Final Page 4

I discussed this in detail with Lauren Lyster on Capital Account. The margin discussion started at 7:55.

For those who haven't heard my description of Apple's arch competitor, Google's, business model, look here:

See Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money! for more on the mechanics of the margin compression theory for Apple

 

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Mon, 10/15/2012 - 15:57 | 2891738 I am a Man I am...
I am a Man I am Forty's picture

Why did you underestimate Asia?  So many analysts did, it's quite remarkable really.  I, of course, told everyone Asia was going to be huge.  So why did you not think sales were going to be big in Asia? It being a giant country and all and they absolutely love iStuff over there.  So how did you miss the largest growth story that Apple has since your analysis is so spot on tight and all.  We won't go into the fact that you have been nay saying apple since the stock was below $200, but I digress.

Mon, 10/15/2012 - 17:05 | 2891904 Reggie Middleton
Reggie Middleton's picture

Does it matter that I underestimated Asia? I got the numbers right on Apple stock and I got it right on Apple's outlook, margin pressure and competition. You guys are highly unrealistic. 

Mon, 10/15/2012 - 15:36 | 2891690 Popo
Popo's picture

What on earth are you bragging about Reggie?   Anyone who took your advice on Apple 18 months ago lost their shirts.  You're conveniently starting the "clock" in the last week and tooting your own horn somewhat clownishly.   You've been dead wrong on APPL for more quarters than I care to count.  

The thing about being an analyst Reggie is not being "eventually" right.  It's about being right, at the right time.   I feel sorry for the poor lemmings who buy your newsletter and actually trade your recs.  They must be living on a park bench by now.  

There's nothing wrong with making a bad call by the way.  It happens to the best of the best.   But coming back bragging like you're batting 100% just makes you look ridiculous when anyone who's been following you can clearly see how long you've been whiffing.   Give the chest beating a rest, bro.   Make some good, TIMELY calls and we'll be impressed.

Mon, 10/15/2012 - 15:53 | 2891731 Reggie Middleton
Reggie Middleton's picture

18 months ago I was just as accurate as I was 6 months ago. As a matter of fact, I think the valuation bands actually stuck tighter to the actual stock price then than it did in the first quarter. Of couse you somehow missed that. This is one thing that I don't understand about the "cult-like". I put the subscription numbers up for all to see and still you babble about as if you have a point. I have no problem admitting when I'm wrong, it's just that I have this condition of having to be wrong first before I admit it.

Mon, 10/15/2012 - 14:49 | 2891546 Jack Sheet
Jack Sheet's picture

Lauren's thighs again.

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