UBS Securities’ Maynard Um this morning offers what he calls a “10-Q/K picture book” for Apple (AAPL), a guide to the company’s fiscal trends in charts and graphs.
Among the observations by Um, who maintains a Buy rating on Apple shares and a $510 price target, offers, are that the company’s profit last quarter, the fiscal Q4, was reduced by as much as 72 cents per share thanks to “deferred margin on component sales,” which reduce gross profit. Um provides no explanation for the higher components cost, though one would assume it is linked to the ramp up for the iPhone 4S during the September quarter.
What’s the takeaway from that? �Well, not much, though Um throws out the following: “If reversed, five quarters of over accruals of $650m would equate to ~180bps of gross margin/~$0.52 in EPS.”
Um also makes note of the big — more than 50% — jump in Apple’s capital expenditures planned for this fiscal�year, and speculates “We think it is likely Apple will continue to invest in its data centers (possibly a solar farm in NC), demolish & build the site for its new campus, & grow capacity (tooling equipment for 3rd party mfg, etc),” not to mention 40 new Apple stores, most overseas.
Lastly, Um takes note of Apple’s spectacular growth in China, where sales more than doubled, year over year, last quarter. He sees the trend continuing, and in fact he issued a separate report today with an update on the likelihood of greater expansion, as the existing carrier, China Unicom (CHU), sold the newly discounted iPhone 3GS and 4 in October, and as China Telecom (CHA) gears up to sell the iPhone in future, he believes:
UBS�s [China telecom analyst] Jinjin Wang believes that China Telecom needs an improved handset portfolio & more support from 3rd party distribution channels in order to drive further stand alone wireless service (China Telecom�s bundling rate with broadband is already high). The CDMA iPhone launch should be a positive driver as it will also help China Telecom penetrate the high-end segment.
Apple shares today are down $3.02, or 0.8%, at $401.93 up $3.92, or 1%, at $408.87.
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