Earnings Smackdown

Apple chart of the day: From 66% revenue growth to 9.2%

March 30, 2014: 1:15 PM ET

Without a new product, says a prominent amateur analyst, Apple may be stuck below 10%.

Source: Posts at Eventide from company reports.

Source: Posts at Eventide from company reports.

FORTUNE -- Robert Paul Leitao manages a Los Angeles Catholic Church by day, but his real devotion is to Apple (AAPL).

When I first met him, Leitao was running The Mac Observer's Apple Finance Board, which he moved to LinkedIn a few years ago and renamed AAPL Independent Analysts. He also founded the Braeburn Group, and every quarter he pulls together his members' estimates for Fortune's Apple Earnings Smackdown. With all this, he somehow finds time to write his irregular Posts at Eventide, from which the attached charts were taken.

Ever the Apple bull, Leitao begins his latest post -- Walking Up the Down Staircase -- on a positive note. Over the past eight fiscal years, he reminds us, Apple's revenue has risen 1,127% and its earnings per share 2,457%.

But the charts he posted Saturday tell a very different story.

Following two years of extraordinary revenue growth -- 66% in fiscal 2011, and 54% in fiscal 2012 -- Apple's grew only 9.2% in the fiscal year that ended in September 2013 and its guidance for the quarter that ended Saturday suggests no growth at all.

Leitao's analysis:

Apple's seemingly unreal rates of revenue growth from FY2010 through FY2012 were due in part to the release of the iPad product line in April 2010, the addition of Verizon Wireless as an authorized carrier in February 2011 and the mass consumer migration from feature phones to smartphones that occurred over the three-year period.

Apple's decline in earnings per share in FY2013 was influenced by the company's very strong prior-year performance. Although Apple reported 9.2% revenue growth in the period, the drop in gross margin year-over-year produced negative net income growth and a decline in earnings per share...

While much speculation continues about Apple's plans for new products, with the start of the June quarter, Apple's cycle of negative net income growth has come to end with or without new product lines.

Nonetheless, as the graphs in this article illustrate, on a forward-looking basis fast rates of revenue and net income growth are dependent on the successful release of new and currently unannounced new products. Apple is an episodic enterprise. Revenue growth rates and organic net income growth will be challenged in fiscal years absent the delivery of new products.

For the record, Leitao expects Apple to deliver those new products before the end of the year.

For more charts and more analysis, see Apple Is Walking Up The Down Staircase.

  • Apple's mixed first-quarter results: What analysts are saying

    Disappointed with iPhone sales. Spooked by second-quarter guidance.

    FORTUNE -- The Christmas quarter was a complicated one for Apple (AAPL), with record iPhone sales that disappointed, record iPad sales at lower average prices, and guidance that alerted investors that they can look forward next report to the company's first year-over-year revenue decline in 11 years.

    Most analysts did their best to explain the nuances behind the numbers Apple released Monday night, but there MORE

    - Jan 28, 2014 10:53 AM ET
  • The best and worst Apple analysts: Q1 2014 edition

    None of the analysts -- pros or indies -- got everything right this quarter.

    FORTUNE -- This was tough quarter to call and none of the 47 Apple (AAPL) analysts we polled -- 29 professionals and 18 amateurs -- got everything right. Or even close to right.

    Wells Fargo's Maynard Um, who came in first place on the top and bottom lines -- having missed EPS by only a penny -- came MORE

    - Jan 28, 2014 7:52 AM ET
  • All eyes on Apple Inc.

    Can Cupertino still pull a rabbit out of the hat? We'll find out this afternoon.

    FORTUNE -- "We believe fundamentally that people love surprises." 

    That was Tim Cook explaining to ABC's David Muir Friday why he wasn't going to answer any questions about future devices. Like Steve Jobs, Cook believes in the big reveal, on stage, with the global media watching -- at least when it comes to new products and services.

    For quarterly financial MORE

    - Jan 27, 2014 10:15 AM ET
  • Spreadsheet of the day: Final estimates for Apple's fiscal Q1 2014

    The consensus forecast of 47 analysts: Earnings of $14.36 per share on sales of $58 billion.

    FORTUNE -- The results of Fortune's quarterly survey of Apple (AAPL) analysts are in, and you could look at the findings -- depending on how full or empty your Apple glass happens to be -- as a shift to sustainable growth, a pause before the next big thing, or the end of a high-flying era.

    The consensus estimates MORE

    - Jan 26, 2014 2:19 PM ET
  • Two big banks upped their Apple numbers last week

    Goldman Sachs raised its revenue estimate by $1.26 billion; Credit Suisse by $2.73 billion.

    FORTUNE -- One thing that jumps out at you when you're looking at a lot of Apple (AAPL) analysts' estimates -- as I have been for the past couple of weeks -- are those large, last-minute adjustments.

    Sell-side analysts will often offer their clients one set of estimates a few weeks into the quarter and a second shortly MORE

    - Jan 25, 2014 11:02 AM ET
  • Handicapping Apple's quarterly earnings and revenue: Q1 2014

    Average estimate: $14.32 per share on sales of $57.9B. Apple's guidance: $55 to $58B.

    FORTUNE -- On Monday, after the markets close, Apple (AAPL) is scheduled to announce its results for the first fiscal quarter of 2014, and we'll get to test not just the forecasts of our cadre of Apple analysts -- a mix of pros and amateurs -- but the accuracy of Apple's predictions under the new regime.

    In the MORE

    - Jan 24, 2014 9:52 AM ET
  • How many Macs did Apple sell last quarter?

    The analysts' estimates range from 3.8 million to 5.2 million. Average: 4.6 million.

    FORTUNE -- It was once Apple's (AAPL) No. 1 source of revenue, but today, 30 years after its launch, the Mac is now almost an afterthought -- No. 3 in terms of revenue, behind the iPhone and iPad and ahead (for now) of iTunes.

    The Mac did manage to generated $21.5 billion in fiscal 2013 -- roughly one eighth MORE

    - Jan 23, 2014 8:21 PM ET
  • How many iPads did Apple sell last quarter?

    The analysts' estimates range from 21 million to 28 million. Average: 25 million.

    FORTUNE -- Four years after Steve Jobs introduced it, the iPad is Apple's (AAPL) second biggest cash cow.

    If the iPhone generates a bit more than $5 of every $10 Apple collects, the iPad brings in nearly $2. And for both products, the holiday quarter -- the one that Apple reports next Monday -- is the big one.

    iPad sales MORE

    - Jan 22, 2014 7:29 AM ET
  • How many iPhones did Apple sell last quarter?

    The analysts' estimates range from 50 million to nearly 60 million. Average: 55.3 million.

    FORTUNE -- There's a lot chatter in the tech press right now about iPhone sales to China Mobile (CHL), Apple's (AAPL) newest and biggest partner.

    But when the company reports its earnings a week from Monday, the iPhone result traders will be keyed in on is how many units Apple sold in the quarter before the China Mobile deal.

    With a MORE

    - Jan 19, 2014 6:32 PM ET
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.