MacUpdate Weekend Sale :This weekend MacUpdate has slashed prices on Painter 12 and Painter Lite. Painter 12 retails for $429, but has been reduced by 54% to $199. Painter Lite has seen a 58% price cut from $69 to $29. Hurry, because these deals are only available until May 19th 2013.      
toggle

AAPL Stock: 433.26 ( -1.32 )

http://www.macnn.com/articles/09/09/17/firm.backs.importance.to.investors/

Accounting change makes room for Apple's 'hybrids' - analyst

updated 12:50 pm EDT, Thu September 17, 2009

 

Firm backs importance to investors


A change in accounting rules that will favor Apple is based on the recognition of "hybrid" products, says Kaufman Bros. analyst Shaw Wu. The analyst notes that a number of companies are now dependent on vertically-integrated business models, in terms of hardware, software and services; Apple for instance not only produces the iPhone, it develops the iPhone OS, and runs the iTunes Store. Under the current incarnation of rule SOP 97-2, hybrid products must have deferred revenue recognition.

The tentative change to SOP 97-2 means that Apple should be able to recognize point-of-sale revenues for both the iPhone and the Apple TV, along with an estimated value for software and service over the life of the hardware.

Like other analysts, Wu observes that the shift should finally present a more accurate picture of Apple revenue and EPS. Professional analysts are said to be unlikely to change their opinions much, however, as they already use free cash flow to judge Apple shares. In this regard the altered rules are more likely to help "mainstream" investors, who instead rely on EPS, a factor greatly influenced by deferred revenue accounting.

Wu is calling for a price target of $184 on Apple stock, and a forecasted $6.60 in EPS during calendar 2010. Using free cash flow, Wu expects $10 per share.


by MacNN Staff

Post tools:

TAGS :

 iPhone, Investor, Apple TV, Apple
toggle

Comments

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    No no no

    in terms of hardware, software and services; Apple for instance not only produces the iPhone, it develops the iPhone OS, and runs the iTunes Store. Under the current incarnation of rule SOP 97-2, hybrid products must have deferred revenue recognition.

    That's not right. Otherwise, would not the iPod require a deferred revenue model as well. But it doesn't.

Login Here

Not a member of the MacNN forums? Register now for free.

 
close
Photo
toggle

Network Headlines

toggle

Most Popular

MacNN Sponsor

Recent Reviews

Brother HL-3170CDW LED Printer

We've mentioned before that we are far from a paperless society. For now, at least, there are tasks that require a piece of paper for ...

HTC One

It is hard to overstate just how critically important the HTC One is to the Taiwanese company’s fortunes. Despite its alarming decline ...

Samsung Galaxy S 4

Samsung's new flagship Android smartphone, the Galaxy S 4, faces even stiffer competition than its popular predecessor. With a five-in ...

toggle

Most Commented