Nosebleed territory: An Earnings Smackdown winner (Q3 2017) just posted the industry-high Apple revenue estimate.
From Thursday's note to Above Avalon subscribers:
- Revenue: $95.6B (guidance: $84B to $87B)
- Gross Margin: 38.6% (guidance: 38.0% to 38.5%)
- EPS: $4.49 (consensus: $3.80)
- iPhone: 82.0M (up 5%)
- iPad: 14.9M (up 14%)
- Mac: 5.9M (up 10%)
- Apple Watch: 10.2M (up 80%)
- Services: $8.2B (up 14%)
- Other Products: $5.9B (up 45%)
- Buyback: 50M shares repurchased
We will begin today's discussion with the elephant in the room - my revenue estimate. For the past two years, Apple has reported earnings that are roughly in-line with its guidance... Meanwhile, my $95.6M revenue estimate for 1Q18 exceeds the top end of Apple's guidance range by $8.6 billion. What is going on here? As we discussed this past Tuesday, my revenue estimate reflects very strong iPhone X sales driving iPhone ASP to an all-time record.
My take: I'm still gathering December quarter numbers for Apple, but I can tell you that Cybart's estimate of 82 million iPhones is middle-of-the-road. It's those 10.2 million Apple Watches and, especially, his $826 iPhone ASP that have pushed him into nosebleed territory.