Apple Crushes Estimates (AAPL)

Apple Crushes Estimates

Apple (Nasdaq: AAPL ) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), Apple beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly, and earnings per share increased significantly.

Margins increased across the board.

Revenue details
Apple logged revenue of $46.3 billion. The 42 analysts polled by S&P Capital IQ foresaw net sales of $39.2 billion. Sales were 73% higher than the prior-year quarter's $26.7 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $13.87. The 43 earnings estimates compiled by S&P Capital IQ predicted $10.11 per share. GAAP EPS of $13.87 for Q1 were 116% higher than the prior-year quarter's $6.43 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 44.7%, 620 basis points better than the prior-year quarter. Operating margin was 37.4%, 810 basis points better than the prior-year quarter. Net margin was 28.2%, 570 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $32.0 billion. On the bottom line, the average EPS estimate is $8.02.

Next year's average estimate for revenue is $141.5 billion. The average EPS estimate is $35.53.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 25,136 members out of 27,287 rating the stock outperform, and 2,156 members rating it underperform. Among 5,640 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 5,414 give Apple a green thumbs-up, and 226 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Apple is buy, with an average price target of $504.94.

Looking to profit from the makers of computer hardware? You may be missing something obvious about where the money will be made in the tech industry of the future. Is Apple on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

Add Apple to My Watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On February 02, 2012, at 9:25 PM, MHedgeFundTrader wrote:

Apple has become a monster cash flow generator. Apple now has the envious problem in that sales of several of its products are going hyperbolic at the same time.
Apple announced net profits of $13.06 billion, or $13.87 per share, up 11% from the previous year. If the company just maintains that rate for the rest of the year, it will generate $55.48 in earnings, which at the current 11.5 multiple should take the stock up to $638, up 40%. If Apple makes it up to a market multiple, the stock should rise to $721, a gain from here of 58%.
If the multiple expands to its pre-crash average of 35 X, that would take the stock to a positively nose bleeding $1,941, giving you a 424% return from current levels. Then the company would be worth $2.8 trillion and rank 5th in the world in GDP, more than France, and just behind Germany. Wow!
It all reinforces my view that Apple shares will reach my long term target of $1,000 sooner than anyone thinks. Long term readers are well aware that I have been making this call for the past two years back when it was trading at a lowly $240. More recent subscribers will also recall that I predicted that Apple would be the top performing technology stock in my 2012 Annual Asset Class Review.
I'm not saying that you should rush out and load up on stock today. But it might be worth taking a stake on the next wave of fear that strikes the market.
The Mad Hedge Fund Trader