Yes, we've given this topic a lot of coverage, but it's time for an update. From all indications that we've received Apple should not only post a profit in its Q3 earnings report but should report a year over year gain as well as a sequential gain from Q2 to Q3. And, it should meet or beat consensus estimates. But, the quarter isn't a lock until it's booked and all of the numbers are juggled and set.
Yet, all eyes will be on unit sales to see if Apple is truly experiencing true growth rather than the benefits of the "Fat G3 Margins" and the tail end effects of the cost cutting and savings. "Units" rather than "cents" will be the focus. An issue we previously discussed.
Well, even though RFI expects Apple to "Meet or Beat Street Consensus Estimates," it might be "Real Close" as to whether Apple meets "unit growth" in this quarter because of the G3 PowerBook delays, etc. which will place an inordinate burden on the desktops. RFI believes that as of 31 May 98 that Apple was within 20% of its unit sales targets, but that's our opinion and it's a "Crap Shoot" as to whether they will reach their unit goals. Whether the promotions and arrival of PowerBook inventory to meet demand will goose it that last bit is open to question.
"Centswise," Apple will almost surely post a profit and should match Q2 if not exceed Q3 Consensus estimates. AAPL.O will react and respond to the "Cents" before it reacts to the "The Sense of the Cents." Whether "Units" are: met, explained or spun; remains to be seen. They're "close," but RFI can't give them a cigar just yet. And, it would have been a '58 Vintage Cuban (Legal!) if it weren't for the fact that smoking is banned on the Apple campus.
People thought that RFI was telling them to change their options strategy last week, and we weren't. We were suggesting a "hedge" lest "bad news" hit AAPL.O before the iMacWorld Expo NY News and the Q3 earnings. A hedge is just that, a hedge.
Well, while the "news" could still hit Apple, it looks as if the danger is passing, so you can keep the hedge or ease out of it on any weakness in AAPL.O. It looks like there's going to be a full-fledged "hype" machine starting soon. Whether The Street listens or not is another matter. FWIW, the "Conspiracy of Silence" is basically keeping the leaks away from the general markets and media. Go figure. The Street now has a vested interest in keeping Apple where it is, and even going higher. Gee....
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