Apple Inc. (NASDAQ:AAPL) has released its 10-K filing, detailing increased capital expenditure (CapEx) and off-balance sheet commitments, which Morgan Stanley equity research analysts believe will boost full year 2013 revenue beyond consensus estimates.
Apple Inc. (NASDAQ:AAPL) earlier this year, published a long list of its supply chain, exhibiting high levels of off-balance sheet commitments, including materials for manufacturing products. The commitments are indicative of the company's plans for massive product development, while the CapEx will boost the long term growth of the iPhone maker.
According to Morgan Stanley's analysis on Apple Inc. (NASDAQ:AAPL)'s capital expenditure and off balance sheet commitments, the company's Capex enjoys an estimated growth of 58% from 2011, and is expected to pull up the company's revenues accordingly. Apple Inc. (NASDAQ:AAPL) is expected to register nearly $200 billion worth of revenue FY13, replicated by a capital expenditure of about $9.5 billion in 2012, up from about $4 billion registered in 2011.
Apple Inc. (NASDAQ:AAPL)'s off-balance sheet commitments of about $16 billion in 2012 are estimated to generate about $235 billion worth of revenues in FY13. This represents about an $8.5 billion increase in off-balance sheet commitments registered in 2011. The company is also expected to grow these commitments further during 2013, to just under $24 billion.
Apple Inc. (NASDAQ:AAPL) is in the process of constructing a research facility in China, and MS analysts did not leave this fact in their analysis either. The iPhone maker has injected a lot of capital into the project, growing it from the figure of around $2.5 billion in 2011 to an estimated $7.5 billion in 2012. This is expected to boost the production of iOS units up from 120 million posted in FY2011, to about 200 million in 2012, which will boost the FY13 sales, and consequently, revenue as well.
The analysts also established that Apple's Capex and revenue have a correlation coefficient of 93%, while the off-balance sheet commitments are 95% correlated to the company's revenue. These are the two main facts that the analysts have used to draw the conclusion of Apple Inc. (NASDAQ:AAPL)'s revenue outperforming analysts' estimates in FY13.
Elsewhere, Barclays Plc (NYSE:BCS) equity research analysts believe that a majority of the statistics indicate that there is a likelihood of the company's margins moving upwards after the December quarter. The iPad mini is highly priced, compared to competitors, mainly due to Apple's margin requirements and the analysts point out that indeed, the product will aid in sustaining the company's margins, as well as widening of the total addressable market (TAM).
However, the analysts are still skeptical of Apple's ability to meet the high demand for its new products, which has so far proven to be the main bottleneck for the world's most valuable company by market cap.
Nonetheless, the off balance sheet commitments, along with capital investments depicted in Morgan Stanley's research as obtained from Apple Inc. (NASDAQ:AAPL)'s Q-10 filing, will play a big role toward bridging the gap between demand and supply, hence, boosting the company's revenue for FY13.