APPLE INC (AAPL) 140.02 $0.00 (0.00%)

Will Apple Beat 2009 Revenue Consensus?

Nov 14, 2008 - 8:02 AM EST

Andy Zaky submits:

Four months ago, the analyst consensus estimate for 2009 had Apple (AAPL) earning $6.36 in EPS on approximately $40 billion in revenue. Since that time, the economy has gone through a major financial crisis, which has led many analysts to revise their estimates down, quite dramatically. As of Wednesday, the analysts were now looking for Apple to earn $5.35 in EPS on approximately $37.5 billion in revenue in 2009. The consensus has Apple literally contracting on the year—down from $5.36 in EPS in 2008. These extraordinarily bearish consensus estimates have set Apple up to beat revenue expectations by approximately $900 million each quarter in 2009.

I expect Apple to earn about $6.63 in EPS on $41.2 billion in revenue beating expectations by $1.28 in EPS and $3.63 billion in revenue. This amounts to an average quarterly beat of $907 million in revenue and $0.32 in EPS. Even before this recent bout of downward revisions to the estimate, I saw the consensus as already pricing in a moderate to severe recession.

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Source: Seeking Alpha (Nov 14, 2008 - 8:02 AM EST)