JP Morgan ups holiday quarter iPhone estimates to 28 million
J.P. Morgan bumped up its projections for shipments of Apple's iPhone in the December quarter to 28 million units, revising its revenue estimates for the company accordingly to $38.69 billion.
Analyst Mark Moskowitz issued a note to clients on Thursday announcing the revised estimates, noting that "Santa's sleigh needs more room for iPhones." Whereas the firm's previous estimate was 25.3 million units, he now predicts iPhone shipments of 28 million for the holiday quarter.
The analyst noted that U.S. carriers have been "surprised by the strong uptake" of the iPhone 4S, as well as the lower-priced iPhone 4 and 3GS models. The older iPhone models are also expected to aid Apple's penetration in emerging markets such as China.
By comparison, Apple's previous best for iPhone sales came in the June 2011 quarter with 20.34 million iPhones. The company saw a sequential decline in iPhone sales in the September quarter, but CEO Tim Cook is confident that this next quarter will set an "all-time high" for iPhone sales.
According to the analyst, sustained demand for all three current iPhone models (iPhone 4S, 4 and 3GS) will push Apple's revenues up to $38.69 billion with $9.87 in earnings per share this quarter. The firm's previous estimate stood at $37.26 billion and $9.45 EPS. Wall Street consensus puts Apple's revenue for the quarter at $38.02 billion and $9.78 EPS.
J.P. Morgan also raised its fiscal 2012 and fiscal 2013 estimates for Apple's handset shipments. The company expects 105.5 million units next fiscal year and 121.7 million in 2013.
By comparison, Apple saw $26.74 billion in revenue in the December 2010 quarter with sales of 16.24 million iPhones and 7.33 million iPads.
Moskowitz did, however, revise the investment bank's iPad estimates slightly downward because of "limited uplift in build activity." He now believes Apple will ship 13.0 million tablets, instead of 13.3 million. Amazon's Kindle Fire, which Moskowitz reports as having "better-than-expected momentum with more price sensitive consumers," is also believed to have a small impact on iPad, though he believes customers will eventually come away "disappointed" with the Kindle Fire. But, in the longer term, J.P. Morgan expects the iPad's retail momentum to continue to accelerate.
As for Apple's Mac segment, J.P. Morgan's estimates remain steady at 5.4 million units. According to Moskowitz, MacBook Air momentum will remain strong without receiving major competition from Intel's Ultrabook specification. Apple is also not likely to be affected by a hard-disk drive shortage that will impact the broader PC market.
Shares of Apple remain a top pick for the firm, which rates the stock as Overweight with a price target of $525.
Analyst Mark Moskowitz issued a note to clients on Thursday announcing the revised estimates, noting that "Santa's sleigh needs more room for iPhones." Whereas the firm's previous estimate was 25.3 million units, he now predicts iPhone shipments of 28 million for the holiday quarter.
The analyst noted that U.S. carriers have been "surprised by the strong uptake" of the iPhone 4S, as well as the lower-priced iPhone 4 and 3GS models. The older iPhone models are also expected to aid Apple's penetration in emerging markets such as China.
By comparison, Apple's previous best for iPhone sales came in the June 2011 quarter with 20.34 million iPhones. The company saw a sequential decline in iPhone sales in the September quarter, but CEO Tim Cook is confident that this next quarter will set an "all-time high" for iPhone sales.
According to the analyst, sustained demand for all three current iPhone models (iPhone 4S, 4 and 3GS) will push Apple's revenues up to $38.69 billion with $9.87 in earnings per share this quarter. The firm's previous estimate stood at $37.26 billion and $9.45 EPS. Wall Street consensus puts Apple's revenue for the quarter at $38.02 billion and $9.78 EPS.
J.P. Morgan also raised its fiscal 2012 and fiscal 2013 estimates for Apple's handset shipments. The company expects 105.5 million units next fiscal year and 121.7 million in 2013.
By comparison, Apple saw $26.74 billion in revenue in the December 2010 quarter with sales of 16.24 million iPhones and 7.33 million iPads.
Moskowitz did, however, revise the investment bank's iPad estimates slightly downward because of "limited uplift in build activity." He now believes Apple will ship 13.0 million tablets, instead of 13.3 million. Amazon's Kindle Fire, which Moskowitz reports as having "better-than-expected momentum with more price sensitive consumers," is also believed to have a small impact on iPad, though he believes customers will eventually come away "disappointed" with the Kindle Fire. But, in the longer term, J.P. Morgan expects the iPad's retail momentum to continue to accelerate.
As for Apple's Mac segment, J.P. Morgan's estimates remain steady at 5.4 million units. According to Moskowitz, MacBook Air momentum will remain strong without receiving major competition from Intel's Ultrabook specification. Apple is also not likely to be affected by a hard-disk drive shortage that will impact the broader PC market.
Shares of Apple remain a top pick for the firm, which rates the stock as Overweight with a price target of $525.
Comments
AAPL is held down by a some strange force that defies normal logic but sooner or later it will snap and it will shoot up.
Here's a good article that explains why AAPL isn't higher. It would make sense if Apple was just another company. http://blogs.reuters.com/felix-salmo...ation-edition/
AAPL is held down by a some strange force that defies normal logic but sooner or later it will snap and it will shoot up.
Steve Jobs is missing. I mean to say, the market is fence sitting waiting to see what impact SJ death has on the future of Apple.
Just my speculation, as the answer won't be evident for about 2-3 years.
However, I agree with you, there will come a time when the market decides Apple is going gangbusters and that they better jump back in. Another scenario is that big shareholders have recently taken profits and are cashing up in what be the year (2012) of holding reasonable cash reserves.
Don't listen to me though, what do I know, just my 2c worth.
J.P. Morgan bumped up its projections for shipments of Apple's iPhone in the December quarter to 28 million units, revising its revenue estimates for the company accordingly to $38.69 billion.
Here we go again. Analysts inflating their projections well beyond any guidance they've been given. Then, when Apple exceeds its own guidance but fails to meet the analysts' made up figures, the stock will plummet again.
It's really a shame that there are no consequences for being wrong as an analyst.
Steve Jobs is missing. I mean to say, the market is fence sitting waiting to see what impact SJ death has on the future of Apple.
Just my speculation, as the answer won't be evident for about 2-3 years.
However, I agree with you, there will come a time when the market decides Apple is going gangbusters and that they better jump back in. Another scenario is that big shareholders have recently taken profits and are cashing up in what be the year (2012) of holding reasonable cash reserves.
Don't listen to me though, what do I know, just my 2c worth.
You may have a point. It is quite possible that the market is waiting to see how the post-Jobs Apple executes a new product rollout. We may have to wait until iPhone 6 and iPad 3 before we see much happening.
Here we go again. Analysts inflating their projections well beyond any guidance they've been given. Then, when Apple exceeds its own guidance but fails to meet the analysts' made up figures, the stock will plummet again.
It's really a shame that there are no consequences for being wrong as an analyst.
Normally though they (the official analysts as opposed to the amateurs) under estimate Apple so not sure your model works based on the past (other than the last Q which was an anomaly).
Normally though they (the official analysts as opposed to the amateurs) under estimate Apple so not sure your model works based on the past (other than the last Q which was an anomaly).
Sure it does. The last quarter was the big one for the analysts overestimating FINANCIAL results. But there is an unending string of cases where analysts predicted that a future product would have x, y, or z - and then when the product comes out, they all pile on with what a disappointment the product is because it doesn't have x, y, or z. It has gotten to the point where Apple gets labeled a failure every time they fail to meet some absurd pronouncement from an analyst or pundit.
Here's a good article that explains why AAPL isn't higher. It would make sense if Apple was just another company. http://blogs.reuters.com/felix-salmo...ation-edition/
Good article. The best argument in the list is that they can't keep sustaining the growth, but that discounts the reality of growing middle class in China, and the penetration they are having there. It is as though their addressable market has doubled.
I'm torn. I've made a lot of money on Apple, and it is currently over 80% of my portfolio. I could sell half my position and buy a house now... or wait a year and maybe be able to retire. But, I don't sell because I keep looking at the products, the execution, and the cult... and have trouble seeing where they will falter.
Here's a good article that explains why AAPL isn't higher. It would make sense if Apple was just another company. http://blogs.reuters.com/felix-salmo...ation-edition/
That article is largely useless. First, even the author admits that none of his arguments are compelling. Second, none of the arguments make any sense - or negate the fact that Apple's P/E is extraordinarily low by any standard.