Horace Dediu takes a bank shot at Apple’s holiday quarter

How does he figure Apple’s December sales will be 36% higher than last year? It’s complicated.

It comes down to the effects of a burst of CapEx spending showing up in the revenue stream three months later.

From Preview of the holiday quarter on Asymco.com

Assuming that the spending on manufacturing equipment and information systems hardware (i.e. data centers) is in support of the iOS device sales and services we can try to show how sales correspond to spending with the following graph:

dediu bank shot

Click to enlarge. Imagine the next gray bar reaching the green line. Skipping ahead to Dediu’s punchline:

iOS and Services sales to date have been $103.2 billion with an estimate for next quarter of about 54.3 billion (based on guidance) and thus a total through Q3 of $157.5 billion. Subtracting this from the $270.45 billion expectation from the calculation above gives a fourth calendar quarter iOS revenue of $113 billion.

Adding $7 billion for the Mac results in a total net sales of $120 billion. This therefore is what I’d put forward as a reasonable target for CQ4.

Note that this is equivalent to a growth of 36% from the 2017 fourth [calendar] quarter.

My take: That would get Wall Street’s attention. Last year’s December quarter sales were $88.3 billon, up 13% year over year..

5 Comments

  1. Gregg Thurman said:

    As I posted earlier this week Apple’s revenue has grown 67% (on average) for the last two years September quarter to December quarter.

    WS’s September quarter revenue consensus is $61 Billion, add 67% and you get $102 Billion December quarter revenue, without taking into account the addition of iPhone X Plus to the iPhone mix.

    This is what I attribute AAPL’s very strong rise since July earnings and GUIDANCE. WS isn’t buying this quarter’s performance, it is buying C2019 (and beyond) performance.

    My December quarter revenue estimate remains $95.177 Billion (which I previously stated I thought was conservative) until management guides the quarter.

    2
    August 24, 2018
    • Michael Thompson said:

      Even your conservative estimate would see approximately $24.5 billion in net profit and EPS of about 5.26. If so, we will see 300+ in calendar year 2019.

      2
      August 24, 2018
  2. Gregg Thurman said:

    Even your conservative estimate would see approximately $24.5 billion in net profit

    Great estimate. My model is indicating $24.488 Billion.

    1
    August 24, 2018
  3. William Kortum said:

    Steve Jobs always lowballed estimates.

    0
    August 27, 2018

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