“The March and June quarters will be messy for all companies, including Apple.”
From a note to Loup Ventures subscribers that landed on my desktop Tuesday:
The Quarter in Perspective
The March quarter is a once in a lifetime event (we hope). Traditional micro metrics (sales, units, ASPs , gross margin) are less relevant given this historically different period. The quarter is an opportunity to look for relevant information about Apple’s current strength, future prospects, and true intrinsic value…
Apple Weathering the Storm
The pandemic has called into question the near and mid-term health of airlines, hotels, cruise lines, restaurants, and live sports. For Apple, while regrettable, this period has amplified the company’s strengths and leadership position in tech and more broadly in society navigating the pandemic. Apple entered the pandemic strong, and the company’s products are even more a foundation of our lives compared to last year.
Like most companies, Apple’s guidance will also be atypical. We expect a broad revenue range, potentially 15%, compared to the companies’ typical revenue guidance range of around 6%. There is also a chance the company does not give any guidance. Any approach is acceptable given this quarter will bear the brunt of the intentional economic shutdown… It should be expected that Apple’s Jun-20 quarter will be significantly lower than the Mar-20 in terms of revenue and earnings and viewed as an aberration. For June we’re expecting revenue of $46B, compared to $51B in March.
Sep-20 will likely be a transition quarter as the economy comes back online. Economic growth and vitality should be expected to quicken through the September quarter as the unprecedented fiscal and monetary support globally begins to take. We expect by Mar-21 growth will have returned.
My take: That’s just a taste of Munster’s long, reflective note. No other Apple analyst began his or her earnings preview with anything like this:
First things first. We’re reminded that analyzing the impact of the pandemic on commerce misses a global truth. The true cost is those directly affected by losing loved ones and to a far lesser extent the disruption around our lives.