Apple Inc. purchase commitments

“Last week, Apple reported its fiscal fourth-quarter results, closing out the company’s fiscal 2012,” Evan Niu writes for The Motley Fool. “Days later, the Mac maker has now officially filed its 10-K annual report with the SEC, containing a treasure trove of interesting details and tidbits about the inner workings of the largest tech company on Earth, as well as hints about its future.”

“Apple has also provided a major clue that it’s expecting a blowout quarter for the holidays,” Niu writes. “We already know that Apple’s characteristic lowball guidance calls for $52 billion in revenue in the current quarter, which would top last December’s $46.3 billion and set a new all-time record for the iPhone maker… Apple’s manufacturing and component purchase commitments have just skyrocketed sequentially to $21.1 billion. That’s an increase of $7.5 billion compared to the last quarter and is Apple’s highest by far.”

Niu writes, “These off-balance sheet commitments are effectively debt that Apple owes, even though it technically has no on-balance-sheet debt. That means that Apple is gearing up to meet massive demand for the arsenal of products that it’s unveiled over the past two months, which it expects to drive 80% of revenue this quarter. That’s a big commitment, so the company must be confident in its demand forecasts. This is the clearest sign that Apple is expecting a monster quarter.”

Read more in the full article here.