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Analyzing Apple Earnings, Google Challenging Amazon & Microsoft on CNBC Stock Draft Picks Today at 2:30
Okay, it's time to review Apple's earnings. It's interesting that so many in the street and off are coming around to my way of thinking regarding Apple. To me that means that fundamental analysis is starting to return. I have had more hedge funds request Apple research than at any time in my site's history. Before we move on to the Apple analysis, I want to inform all that I will be discussing this on air live today in the “CNBC Stock Draft 2012” live on @StreetSignsCNBC, 2:30 pm ET, hash-tag: #cnbcstockdraft2012

Here’s the competition:
- Josh Brown – SHAOLIN STOCKPICKERS
- Abigail Doolittle - DOOLITTLE'S DO-A-LOTS
- James Altucher – THE BOOM TEAM
- Reggie Middleton – TEAM BOOM BUST
- Pete Najarian – THE PONY EXPRESS
- Paul Hickey – B.I.G. MONEY
- Guy Adami – THE OUTSIDERS
Here’s the list of stocks:
- Apple
- Starbucks
- Priceline.com
- Mastercard
- Dollar Tree
- Facebook (You buy the stock POST IPO .. you don’t get it at the IPO price…must buy at first day closing price)
- AT&T
- Johnson & Johnson
- Dell
- Microsoft
- Coca Cola
- Exxon Mobil
- McDonalds
- Groupon
- JC Penney
- Netflix
- Best Buy
- RadioShack
- RIMM
- Green Mountain Coffee
On that note, its time to review Apple's Q2 results. Subscribers, please download
Apple 2Q2012 results analysis.
In short, we significantly underestimated the international sell through of the iPhone, as did much of the sell side. We were off, and wrong on that part and although there was significant internal discussion on raising estimates, the work that went out was not what it should have been. I mention this because we are consistently more optimistic than the sell side in terms of units shipped, thus more accurate come earnings time. This quarter was a snafu. I also mention it because I tend to be a perfectionist and the deviance between the actual results and the projection should have been minimized. With that being said, the logic behind the added caution is still quite valid.
For all of those near fanatics who do not subscribe, I suggest you ask a friend who does subscribe to share with you the difference between last month's valuation note target price (page 10 of
Apple Margin & Valuation Note) and the price of Apple today, the day after earnings (click here to subscribe).
As excerpted:
It is worth noting that the key assumptions that underline the above valuations – (1) iPhone continuing to witness stupendous growth ******* in 2012 and ****** 2013 over a larger base and (2) iPhone margins continue to remain healthy off stable prices and despite increase in material cost – should be keenly watched over the next couple of quarters.
Then ask them bout the logical argument behind the concern with Apple and the extremely volatile price action of the last few weeks. As stated many times in the past, The BoomBustBlog argument and analysis is solid.
What else is there to the earnings announcement? Well we were absolutely correct in terms of the oncoming margin compression of the the product lines, something that was actually easy to see coming but many refused to admit. Of course, there will be those select few that say, "But wait, the company reported an INCREASE in margins while you said there will be a decrease!". Yes, that's true and both can exist simultaneously.



I will discuss nearly all of the stocks in the CNBC stockpicking list above in the next few posts on my way to studios via BoomBustBlog and ZeroHedge. Comments are always welcome. Follow me:
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the make that went out was not what it should hold been.I acknowledge this because we are consistently more Pollyanna click here than the trade pull in cost of units shipped, thus more precise amount earnings experience to get more information
Here is an interesting summary of the fight in smart phones segment :
Samsung Crushes Earnings, Blows Past Nokia To Become World's Biggest Cellphone Maker - Business Insider
With the 4th pick in the 1st Round, Reggie Middleton picks.........
GOOGLE!
You rock Reggie; can you add a subscription service for us newbie small investors with sub 20K investment accounts...
At least Reggie admits it if he's off. He still has a valid point that margins have gone down over the previous average of 60-70%+.
This is one reason why I won't get an iAnything. How much longer can squeezing your suppliers and your cell phone carriers go on?
The last time I ordered an Apple product (laptop), I could track it going from Taiwan, to Alaska, to California, and across to the East coast. This happened in 2 days, so they were shipping the product by plane.
How much $$ does that cost and how much fuel is that plane burning? A lot.
Is that sustainable? Not a chance in hell.
Ask Abigail how that QE is looking. We're kicking her butt too.
"In short, we significantly underestimated the international sell through of the iPhone"
did those words really come from Reggie.
Hey Reg....looks like Mandy Drury picked you! Bravo. Best tits on the (sky) network.
She's not a patch on Capital Account's Lauren Lyster who has both beauty AND brains.
DavidC