Apple's Dec. quarter: Neil Cybart sticks his neck out

Nosebleed territory: An Earnings Smackdown winner (Q3 2017) just posted the industry-high Apple revenue estimate.

From Thursday's note to Above Avalon subscribers:

Here are my financial estimates for Apple's 1Q18:
  • 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.

7 Comments

  1. Michael Thompson said:
    If these numbers are accurate, the stock will be over 200 during the first week of February.

    0
    January 25, 2018
    • Ken Cheng said:
      Nah, didn’t cha hear? Apple’s discontinuing the iPhone X. Saw it on Twitter and Facebook. /s

      3
      January 25, 2018
      • Michael Thompson said:
        I truly believe that the Apple analysts are engaged in market manipulation via disinformation, and if so should be charged with crimes. It’s nearly all of them too. Who holds Toni Sacconaghi or Katy Hubery accountable after their last ditch market calls go down in flames as usual.

        If Apple reports explosive 1st quarter revenue growth and provides strong 2nd quarter guidance, almost every Apple analyst loses the last of their already low reputation. Is it 2/1 after the bell yet.

        For an Apple Long, these lies MUST be addressed and with the truth of our record breaking financial performance.

        0
        January 25, 2018
        • Ken Cheng said:
          Was interesting to see Apple lost $8 in the last 50hrs since 2:05p et on Tuesday.

          2
          January 25, 2018
  2. Fred Stein said:
    Watching these analysts is like watching small children who ate too much sugar.

    0
    January 25, 2018

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