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AAPL 2Q12 Estimate

Revenue: $40.6 billion (AAPL guidance: $32.5 billion/Consensus: $36.0 billion) 
  • I expect iPad and iPhone to represent approximately 75% of Apple’s quarterly revenue.  

GM: 42.9%  (AAPL guidance: 42%/Consensus: 42.7%)

  • Apple’s margin jumped to 44.7% last quarter, from 40.5% in 2011. Continued strong iPhone sales should benefit overall GM in 2Q12,  with attractive component pricing providing additional support. 

EPS: $11.45  (AAPL guidance: $8.50/Consensus: $9.81) 

  • I expect Apple to report 79% yoy EPS growth, which is slightly less than the 83% yoy EPS growth observed in 2011.


Product Unit Sales and Commentary

Macs: 4.3 million (14% yoy growth)

  • With no Mac updates during the quarter, I expect Mac shipments to show continued yoy growth, albeit at a slower pace than 1Q12. iPad cannibalization is also picking up as consumers bypass Macs for lower-priced iPads. 

iPad: 12.0 million (155% yoy growth)

  • Apple sold three million new iPads during opening weekend (includes pre-orders that shipped for the 12 days leading up to the March 16 launch, but not iPad 2 sales).  My iPad estimate is primarily based on weekly sales run rates, using Apple’s new iPad opening weekend sales as a benchmark between slower iPad sales in January and February and the supply/demand imbalance at the end of March. Unlike last year’s iPad launch, Apple seemed to have a better handle with new iPad supply, as online shipment waits did not reach 2011 levels, even with a more extensive international rollout. My estimate assumes approximately 6 million new iPads sold during the last 3.5 weeks of March and an additional 6 million iPads sold in January, February, and the beginning of March. 

iPod: 6.8 million (25% yoy decline)

  • Representing only 2.7% of estimated 2Q12 revenue, the iPod is a footnote. 

iPhone: 36.4 million (95% yoy growth)

  • My estimate reflects an average 2.2 million weekly sales run rate and the addition of approximately 6 to 8 million iPhones into the distribution channel (approaching Apple’s desired 4 to 6 week range). For some perspective, Apple saw a 1.6 million weekly iPhone sales run rate during 2Q11 (pre-iPhone 4S).  My 2Q12 estimate assumes 38% yoy growth in the weekly run rate, which I think is reasonable given  the iPhone 4S and increased iPhone penetration at newer carriers (including Verizon and Sprint) and countries (China). 

When Apple releases earnings on April 24, many will look at iPad and iPhone sales as an indicator for continued strong consumer demand. I suspect Apple may be allowed some breathing room on iPad sales given the supply/demand imbalance and trickiness surrounding a new product launch. Meanwhile, iPhone lacked any significant interferences during the quarter, with results dependent on demand, and to a lesser extent, the number of units added into the distribution channel. 

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