Apple to beat bullish December quarter guidance after all - analyst
Investment firm American Technology Research, which in October waged concern that Apple may have been too aggressive in its outlook for the December quarter, says a new round of channel checks suggest the company will instead beat its guidance once again.
"Well, it's looking like Apple's most optimistic guidance in 8 quarters is turning out to be conservative after all," analyst Shaw Wu advised clients in a research note Tuesday. "Back in October, we had concerns that Apple may have been too aggressive in its outlook, but our recent checks with supply chain sources lead us to believe Apple is positioned to deliver upside."
In particular, Wu pointed to source reports indicating that iPod sales are tracking ahead of expectations with an acceleration in "fat boy" nanos and iPod touch more than offsetting slower growth in iPod shuffle and iPod classic. As a result, he raised his iPod unit forecast from 24 million to 25 million for the three-month period ending December, which compares to consensus estimates on Wall Street of approximately 23.2 million.
Also, the analyst said sources continue to report strength in Mac sales driven by Mac OS X Leopard and switchers from Windows PCs. Therefore, he remains comfortable with his current forecast of 2.3 million Macs versus consensus estimates of approximately 2.2 million.
On the other hand, Wu informed clients that iPhone sales appear to be tracking in-line to slightly below the consensus view of 2 million to 2.1 million units.
"It appears Europe's ramp is less robust than expected due to high pricing and customer service snags (similar to what happened with AT&T initially) offset by better than expected strength in the USA," he wrote. "We believe Apple may need to cut iPhone prices to accelerate sales."
Still, the uptick in Mac and iPod sales, along with favorable high-end product mixes and component cost, were enough to compel the analyst to raise his estimates on the Cupertino-based company once again.
For the current December quarter, Wu now expects Apple to earn $1.63 per share on revenues of $9.4 billion, up from $1.50 and $9.2 billion. This compares to Apple's own stated guidance of $1.42 in per share earnings on sales of $9.2 billion, and consensus estimates of $1.53 per share on $9.3 billion.
"In addition, with a favorable product mix towards the high-end and our checks of component pricing looking more favorable than expected, we are now modeling a gross margin of 33 percent (from 32.1 percent) versus guidance of 31 percent," he wrote.
For all of fiscal 2008 -- which ends next September -- Wu is modeling for earnings of $5.10 per share on revenues of $30.8 billion, up from $5.00 and $30.4 billion. His fiscal 2009 model estimates earnings of $6.10 per share on sales of $35.7 billion.
"We believe favorable component pricing is likely to benefit Apple over the next couple of quarters as we enter a seasonally weaker first half of 2008," he wrote. "In addition, we believe iPod touch and iPod nano have some staying power and are likely to experience strong sales beyond the December quarter."
The analyst maintained his Buy rating and $210 price target on shares of Apple.
"Well, it's looking like Apple's most optimistic guidance in 8 quarters is turning out to be conservative after all," analyst Shaw Wu advised clients in a research note Tuesday. "Back in October, we had concerns that Apple may have been too aggressive in its outlook, but our recent checks with supply chain sources lead us to believe Apple is positioned to deliver upside."
In particular, Wu pointed to source reports indicating that iPod sales are tracking ahead of expectations with an acceleration in "fat boy" nanos and iPod touch more than offsetting slower growth in iPod shuffle and iPod classic. As a result, he raised his iPod unit forecast from 24 million to 25 million for the three-month period ending December, which compares to consensus estimates on Wall Street of approximately 23.2 million.
Also, the analyst said sources continue to report strength in Mac sales driven by Mac OS X Leopard and switchers from Windows PCs. Therefore, he remains comfortable with his current forecast of 2.3 million Macs versus consensus estimates of approximately 2.2 million.
On the other hand, Wu informed clients that iPhone sales appear to be tracking in-line to slightly below the consensus view of 2 million to 2.1 million units.
"It appears Europe's ramp is less robust than expected due to high pricing and customer service snags (similar to what happened with AT&T initially) offset by better than expected strength in the USA," he wrote. "We believe Apple may need to cut iPhone prices to accelerate sales."
Still, the uptick in Mac and iPod sales, along with favorable high-end product mixes and component cost, were enough to compel the analyst to raise his estimates on the Cupertino-based company once again.
For the current December quarter, Wu now expects Apple to earn $1.63 per share on revenues of $9.4 billion, up from $1.50 and $9.2 billion. This compares to Apple's own stated guidance of $1.42 in per share earnings on sales of $9.2 billion, and consensus estimates of $1.53 per share on $9.3 billion.
"In addition, with a favorable product mix towards the high-end and our checks of component pricing looking more favorable than expected, we are now modeling a gross margin of 33 percent (from 32.1 percent) versus guidance of 31 percent," he wrote.
For all of fiscal 2008 -- which ends next September -- Wu is modeling for earnings of $5.10 per share on revenues of $30.8 billion, up from $5.00 and $30.4 billion. His fiscal 2009 model estimates earnings of $6.10 per share on sales of $35.7 billion.
"We believe favorable component pricing is likely to benefit Apple over the next couple of quarters as we enter a seasonally weaker first half of 2008," he wrote. "In addition, we believe iPod touch and iPod nano have some staying power and are likely to experience strong sales beyond the December quarter."
The analyst maintained his Buy rating and $210 price target on shares of Apple.
Comments
Also, the analyst said sources continue to report strength in Mac sales driven by Mac OS X Leopard and switchers from Windows PCs. Therefore, he remains comfortable with his current forecast of 2.3 million Macs versus consensus estimates of approximately 2.2 million.
Count me in those statistics.
Count me in those statistics.
You should be kinder to your Church and give them the new Macbook and buy another for yourself... if Jesus was here today, he'd simply send someone to borrow your best notebook with a promise to return it later (never leave your notebook tied to a tree outside of Jeruselam)
You should be kinder to your Church and give them the new Macbook and buy another for yourself... if Jesus was here today, he'd simply send someone to borrow your best notebook with a promise to return it later (never leave your notebook tied to a tree outside of Jeruselam)
Too Cute
And it IS Christmas too
No pun - Thank God for Macs
Shuffle=$49
Nano 4GB= $99
Nano 8GB=$149
Classic 80GB=$199
Classic 160GB=$249
Touch 8GB=discontinued
Touch 16GB=$299
iPhone 8GB=$349
iPhone 16GB=$399
The $100 cut in the Classic 160GB leaves room for to introduce a 16GB iPhone at the top end. And at $49, the Shuffle becomes an even more enticing impulse buy. The reduced Nano prices stick it to MS/Zune.
With the hopeful January introduction of a 16GB iPhone
I wouldn't get your hopes up for that. I'd say June at the earliest, and more likely September or October.
Love it. All the noobs in one thread. Hey, everyone buy AAPL, quick! It's undervalued!
You know you are right . Gonna buy 3 new iphones tomorrow,, . bought a new laptop 3 weeks ago and leopard family pac yesterday. Have 4 million in apple stock.. go apple
You should be kinder to your Church and give them the new Macbook and buy another for yourself... if Jesus was here today, he'd simply send someone to borrow your best notebook with a promise to return it later (never leave your notebook tied to a tree outside of Jeruselam)
"O Microsoft, Microsoft, you who kill the prophets and stone those sent to you, how often I have longed to gather your children together, as a hen gathers her chicks under her wings, but you were not willing. Look, your house is left to you desolate."
Actually, I'm hoping to use my MBP to video-record our adult Sunday school classes, and the PC will be going into the auditorium for using the PC-based projection software for the hymn and praise song lyrics, which I run. So unfortunately, though I'm donating the PC to the church, it will still be my problem to deal with.
"O Microsoft, Microsoft, you who kill the prophets and stone those sent to you, how often I have longed to gather your children together, as a hen gathers her chicks under her wings, but you were not willing. Look, your house is left to you desolate."
Actually, I'm hoping to use my MBP to video-record our adult Sunday school classes, and the PC will be going into the auditorium for using the PC-based projection software for the hymn and praise song lyrics, which I run. So unfortunately, though I'm donating the PC to the church, it will still be my problem to deal with.
It is nice to see you care. The Lord misses nothing. Onward and upward .
"O Microsoft, Microsoft, you who kill the prophets and stone those sent to you, how often I have longed to gather your children together, as a hen gathers her chicks under her wings, but you were not willing. Look, your house is left to you desolate."
Actually, I'm hoping to use my MBP to video-record our adult Sunday school classes, and the PC will be going into the auditorium for using the PC-based projection software for the hymn and praise song lyrics, which I run. So unfortunately, though I'm donating the PC to the church, it will still be my problem to deal with.
Change your praise song lyrics to Keynote presentations, with some cool builds in there,
and all your problems are solved! (PC goes to the great hereafter, where it belongs.)
I have a Dell that I use for almost nothing now that I have my 24" (white) iMac.
I never thought of giving it to my church though. That would be cruel. I'm thinking
some kind of target practice. That thing has tortured me for years with its random
updates from Micro$oft, it's quirky need for anti-virus, firewall nonsense, and other
insanity. I need to vent my years of pent-up frustration.