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InvenSense takeaways from the Apple report +4
21:00 27-Apr-15
Apple reported revenue of $58b, and 69% of that was from iPhones. Since the average iPhone price was $659, I calculate that 60b iPhones were sold, right at the high end of estimates.
That pretty much causes me to throw out my lowest projection of 15 cents. I now think that it's hard to see how InvenSense earns less than 18 cents per share as a base case, and it could easily be in the 20s.
Things that could be wrong with my thinking, in order of likelihood:
- InvenSense was paid by Apple for something other than parts in the last two quarters (design work on the Watch gyro chip?).
- The supply agreement is very non-standard and functions on a sliding price scale or featured large pre-payments by Apple.
- InvenSense encounters some manufacturing or other operational problem.
I don't see any of these as very likely. Market sentiment is
always harder to predict. The Watch, which has not garnered any
initial results worth truly bragging about, remains a negative,
but I'm still optimistic about earnings on the afternoon of May
4th.