Oppenheimer is out with a potentially venomous call on Apple (NASDAQ:AAPL) saying they Apple could report in line to slightly disappointing F4Q09 revenue ($9.0B-$9.2B) and would keep some powder dry to buy shares following the print, rather than ahead of it.
The focus of their concern is the iPhone. While demand for the product appeared to run ahead of firm's 6M unit target, they believe component/manufacturing hiccups may have prevented Apple from fully meeting demand during F4Q09. They'd use any pull-back as an opportunity to aggressively accumulate additional shares ahead of several near-term catalysts: a potentially gargantuan December quarter for iPhone (assuming no further component issues); re-acceleration of Mac growth with the release of the new MacBook and iMacs; and the likely announcement of the tablet in early 2010.
The first hint of trouble for the iPhone surfaced during the iPod event on Sept. 9, when Apple implied that ~3.5M phones had been sold with only 21 days left in the quarter. Subsequent checks showed the iPhone 3GS sold out in many markets. Something was clearly preventing Apple from shipping to demand.
- Recent carrier surveys suggest the supply constraint has eased. But it's difficult to judge when the bottleneck was resolved, or how many iPhones might have shipped in the final 21 days of the quarter. Consensus estimates imply that 3.5M phones flowed out to customers in the final weeks of 4Q09, which may be too aggressive.
- With demand for the iPhone apparently outstripping supply, December could be a substantial catch-up quarter, both in terms of sell-through and channel replenishment. Barring any additional component or manufacturing disruptions, Oppenheimer believes their 8M unit assumption for F1Q10 could prove conservative, especially given the iPhone's expanding carrier footprint.
- On Mac, they believe upside potential relative to the consensus range of 2.7M-2.8M units is limited, as persistent chatter about a new MacBook and iMacs likely delayed some purchases. Oppenheimer believes F1Q10 YoY growth rates will be significantly more impressive than for F4Q09.
- On gross margin, they expect Apple to significantly outpace consensus on a GAAP basis (they're at 37.3%), as a result of higher iPhone mix and a strong software contribution. Non-GAAP gross margin is likely to be only slightly above the consensus 40.3%—if iPhone caution proves true.
Notablecalls: Wow, calling a potential miss for Apple (AAPL) this is a bold statement from Oppenheimer's Tech/Applied Tech team!
INTC, IBM etc have sold off on pretty stellar (well, at least seemingly stellar) quarters so you would imagine the reaction when Apple actually misses on revs. When was the last time that happened? 4 years ago? Intstant -10-15pts in the cards?
This is a major (sentiment) negative for the stock here, I suspect. Supply issues or not, AAPL's current valuation is not built for that here.
I think we will see some hefty early downside in AAPL stock once the call starts to circulate the trading desks.
I see 3-5 pts of downside today if the market cooperates.
The focus of their concern is the iPhone. While demand for the product appeared to run ahead of firm's 6M unit target, they believe component/manufacturing hiccups may have prevented Apple from fully meeting demand during F4Q09. They'd use any pull-back as an opportunity to aggressively accumulate additional shares ahead of several near-term catalysts: a potentially gargantuan December quarter for iPhone (assuming no further component issues); re-acceleration of Mac growth with the release of the new MacBook and iMacs; and the likely announcement of the tablet in early 2010.
The first hint of trouble for the iPhone surfaced during the iPod event on Sept. 9, when Apple implied that ~3.5M phones had been sold with only 21 days left in the quarter. Subsequent checks showed the iPhone 3GS sold out in many markets. Something was clearly preventing Apple from shipping to demand.
- Recent carrier surveys suggest the supply constraint has eased. But it's difficult to judge when the bottleneck was resolved, or how many iPhones might have shipped in the final 21 days of the quarter. Consensus estimates imply that 3.5M phones flowed out to customers in the final weeks of 4Q09, which may be too aggressive.
- With demand for the iPhone apparently outstripping supply, December could be a substantial catch-up quarter, both in terms of sell-through and channel replenishment. Barring any additional component or manufacturing disruptions, Oppenheimer believes their 8M unit assumption for F1Q10 could prove conservative, especially given the iPhone's expanding carrier footprint.
- On Mac, they believe upside potential relative to the consensus range of 2.7M-2.8M units is limited, as persistent chatter about a new MacBook and iMacs likely delayed some purchases. Oppenheimer believes F1Q10 YoY growth rates will be significantly more impressive than for F4Q09.
- On gross margin, they expect Apple to significantly outpace consensus on a GAAP basis (they're at 37.3%), as a result of higher iPhone mix and a strong software contribution. Non-GAAP gross margin is likely to be only slightly above the consensus 40.3%—if iPhone caution proves true.
Notablecalls: Wow, calling a potential miss for Apple (AAPL) this is a bold statement from Oppenheimer's Tech/Applied Tech team!
INTC, IBM etc have sold off on pretty stellar (well, at least seemingly stellar) quarters so you would imagine the reaction when Apple actually misses on revs. When was the last time that happened? 4 years ago? Intstant -10-15pts in the cards?
This is a major (sentiment) negative for the stock here, I suspect. Supply issues or not, AAPL's current valuation is not built for that here.
I think we will see some hefty early downside in AAPL stock once the call starts to circulate the trading desks.
I see 3-5 pts of downside today if the market cooperates.
11 comments:
I guess Oppenheimer has Asshat Kumar doing the checks.
The same guy that said only a few days ago that iPhone sales in China have been disappointing....even though they haven't gone on sale yet.
Oppenheimer comes out with this the morning of Option Expiration , and the day before AAPL reports........yeah there's no manipulation going on here.
Enough with the black helicopters and tin foil hats.
The headline is the shocker here.
Sorry dude, I call em like I see em. Go look at Savitz' piece where he quoted Ashoks "research note" ....you're telling me that dipshit is getting paid to cover the stock and he comes up with that stinking pile of crap. How does a guy claim sales are disappointing when they havent started. If you dont think there are people heavily invested in trying to keep AAPL from breaking above 192 you are sorely mistaken.
I would have to say there is much truth to what RMH is saying. the market is manipulated by people with their own agenda. it is amzing how many times a stock will trade up /down and the next morning a news flash comes out that confirms the ove the previous day.
Scary world we live in! Where stocks move up and down and then news comes out which continues to move a stock up or down! Treachery is afoot! /sarcasm
Oppenheimer... do they make Hymermobiles in Germany?
Found a 1984 model for sale in England:
http://www.caravans-for-sale.com/15492
Asshat Kumar probably screwed up like RMH stated. Good thing no one cares about this analyst blah blah. Apple rules this market better than Goldman Sachs! Apple down 1% riding the market.
HH
Another example of blatant manipulation today with the arrest of Raj Rajaratnam and cohorts.....how many other examples of "analysts" feeding information to firms prior to the public goes unnoticed?
Observing how a stock reacts to news is where one makes profit not one's opinion on what should be. ICE GOOG CME where upgraded Friday premkt...check the options. Take advantage of "manipulation".
oopsie-daisy, OPCO. lol
I sure am glad Mr Jim Cramer jumped on this call too last Friday and specifically said on his show to wait until Tuesday morning to buy AAPL as they were going to disappoint with their earnings.......Yea Im sure he had his viewers best interest in mind. LOL
He will have em buying it back up 15 points higher.
Oppenheimer = Goffenheimer
Apple over $200 after hours = KaChing!
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