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Apple (AAPL) Fiscal Q4 iPad Sales Miss the Mark

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Apple's iPhone momentum remains strong, but iPad sales fall short

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									Robert DeFrancesco’s
TechStockProspector.com
October 25, 2012


Apple (AAPL) Fiscal Q4 iPad Sales Miss the Mark
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*Apple stumbles after the iPhone 5 launch
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Apple (AAPL, $609.54) reported fiscal Q4 (Sept.) EPS of $8.67, 14 cents below the
consensus estimate of $8.81, on revenue of $36 billion, vs. the consensus of $36.02
billion.

Here’s the unit sales breakdown by product category:

*iPhone: 26.9 million (better than expected—consensus: 25.4 million)
*iPad: 14 million (weaker than even recently lowered estimates of 15 million+)
*Mac: 4.9 million
*iPod: 5.3 million
For fiscal Q1, Apple sees EPS of $11.75 (consensus is $15.41) on revenue of $52
billion (consensus is $54.98 billion). This guidance could turn out to be quite
conservative, particularly if iPhone momentum keeps up.

While iPhone sales (47% of total revenue) in the latest quarter were particularly
strong even with supply constraints on the iPhone 5, the shortfall in the iPad
number was a bit of a downer. The Apple conference call was dominated by
questions about the iPad, which accounts for about 21% of total revenue.

Everyone is trying to figure out why Apple only sold 14 million units this past
quarter. Perhaps a good number of consumers pushed out purchases ahead of the
release of the widely rumored iPad Mini, which finally made its debut this week.
Unit sales for the iPad were still up a respectable 25.8% year over year.

It was emphasized at least twice on the call that iPad Mini margins are “significantly
below the corporate average.” Apple guided fiscal Q1 gross margin down to 36%, a
400 basis point sequential decline.

There are now a lot of moving parts at Apple as we push through the December
quarter, with the iPhone 5 still supply constrained (into the end of the year at least)
and the new iPads (4 and Mini) just hitting the market.

***********************************************************************************

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Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20
years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street.

TechStockProspector.com, launched in 2003, is an investment-research service
focused primarily on the networking, storage, security, wireless and software
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