Monday, April 12, 2010

Apple Inc. (NASDAQ: AAPL): Q2 Earnings Preview 2010

Apple is scheduled to release its fiscal second quarter 2010 earnings after the closing bell on Tuesday, April 20, 2010. Analysts, on average, expect the company to report earnings of $2.41 per share in the second quarter with estimates ranging from a low of $1.93 to a high of $2.72 per share. Revenues for the quarter are estimated to be $8.16 billion. In the second quarter of fiscal 2009, the company reported earnings of $2.77 per share on revenue of $7.51 billion.

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions.

In the preceding Q12010, the California-based company reported that its first quarter profit soared nearly 50% to $3.38 billion or $3.67 per share, from $2.26 billion or $2.50 per share, in the prior year quarter. Revenue jumped 32% to an all-time high of $15.68 billion from $11.88 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $2.07 per share on revenue of $12.06 billion. Gross margin for the quarter expanded to 40.9% from 37.9% in the year-ago quarter. The results were primarily boosted by better-than-expected sales of Mac computers, iPhones and iPods.Apple sold 3.36 million Macintosh computers during the first quarter, up 33% over a year earlier. iPhone sales doubled to 8.7 million units in the first quarter, but iPod sales dropped 8% to 21 million units during the quarter.

Apple, known for its conservative outlook, provided earnings forecast for the second quarter that is expected to come in well ahead of the analysts' expectations. Looking ahead to the second quarter of fiscal 2010, Apple anticipates earnings in the range of about $2.06 to $2.18 per share, and revenue of about $11.0 billion to $11.4 billion.

Late in January, Apple unveiled its highly anticipated new touch screen multimedia device "iPad," which resembles the hugely popular iPhone. The device went for sale in U.S. on April 3. Starting at $499, iPad lets users browse the web, read and send email, share photos, watch videos, listen to music, play games and read ebooks. It is 0.5 inches thick and weighs 1.5 pounds and delivers battery life of up to 10 hours. The company sold more than 300,000 iPads in the U.S. on the first day of its launch. As of April 8, 2010, 450,00 iPads had been sold to date.

Meanwhile, iPhone has continued to grow in popularity-more than 50 million iPhones sold with 30,000 new iPhone users added every day, according to Apple. It has sold over 35 million iPod Touches until now around the world. Also, there are now 185,000 applications in the App store.

The company reportedly plans to begin producing a new iPhone this year, which could allow U.S. phone carriers other than AT&T Inc. to sell the gadget. Industry experts believe that Apple is also developing a next-generation iPhone to debut this summer.

Apple will be releasing the iPhone Operating System (OS) 4.0 in the summer and iPod Touch, with the same update available for the new iPad later this year.

In terms of stock performance, Apple shares have gained nearly 15 percent since the beginning of the year.

Full Disclosure: None.
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