Supply chain data suggests Apple's March quarter could be stronger than Wall Street expects

Posted:
in AAPL Investors edited April 2014
Sales data from some of Apple's biggest suppliers shows stronger than expected returns for the just-concluded month of March, potentially hinting that Apple itself could also surprise to the upside when it reports earnings later this month.

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Analyst Brian White of Cantor Fitzgerald tracks tech component suppliers as part of his "Apple Barometer" measurement. In a note to investors on Monday, a copy of which was provided to AppleInsider, White said that preliminary sales for Apple suppliers were up 34 percent month over month in March, which is higher than the average seasonal increase of 24 percent.

Still, Apple suppliers saw soft sales in the months of January and February. As such, White's estimates call for Apple sales to fall 24 percent quarter over quarter to $43.8 billion in revenue, compared to an 8-year average decline of 19 percent.
Apple is set to report the results of its March quarter on April 23. Investors generally expect revenue to be flat with the same period from 2013.
But White is also slightly more bullish than his Wall Street colleagues, who generally expect that Apple will report revenue of $43.6 billion for the March 2014 quarter. In the same period a year ago, Apple brought in $43.6 billion in revenue, meaning sales are projected to be about flat.

Apple didn't introduce any major new products during the March quarter, which is why many investors aren't expecting to see growth from the company from the start of calendar 2014. However, the three-month period does represent the first full quarter of sales for the new Mac Pro, and it also includes the debut of the iPhone on China Mobile, the world's largest wireless provider.

Last week, analyst Gene Munster of Piper Jaffray offered a prediction that Apple will announce "modest" increases to its share buyback program and dividend payments in its next earnings call. Apple is set to reveal the results of its March quarter after markets close on April 23.

As for White, the analyst is currently on a tour of Asia where he has met with sources in the supply chain and at regional carriers. Based on those discussions, he said last week that he believes a new "iPhone 6" with a larger display could be a "very special" success in China, where customers are apparently eager for a big-screen handset from Apple. White reiterated that stance again in Monday's note.

"The common response we have been getting on our trip is that many consumers purchased a Samsung smartphone due to the larger screen but that they may switch to Apple's iPhone if a larger screen (e.g., 4.7-inch, 5.5-inch) is available with the iPhone 6," White said.

Cantor Fitzgerald has maintained its "buy" rating for AAPL stock with a price target of $777.

Comments

  • Reply 1 of 8
    512ke512ke Posts: 781member

    Sssssh!  The Analysts will read this and raise their expectations!

  • Reply 2 of 8
    dipdog3dipdog3 Posts: 77member

    price target of $777? Really?

    Where is the justification for this?

  • Reply 3 of 8
    dickprinterdickprinter Posts: 1,060member

    T. Cook:

     

    "….shouldn't gauge unit sales based on supply chain data…"

  • Reply 4 of 8
    woochiferwoochifer Posts: 365member

    Pump and dump. Most of the news over the past month has been about sales coming in stronger than "expected." And when the sales come in "as expected" then the stock will take a beating. Wash. Rinse. Repeat.

  • Reply 5 of 8
    hydrogenhydrogen Posts: 219member
    Quote:
    Originally Posted by Woochifer View Post

     

    Pump and dump. Most of the news over the past month has been about sales coming in stronger than "expected." And when the sales come in "as expected" then the stock will take a beating. Wash. Rinse. Repeat.


     

     

    Variant : you announce the good surprises, therefore there cannot be good surprises any longer, as they are considered as granted. So what's left as a surprise ? just Guess ...

  • Reply 6 of 8
    Quote:

    Originally Posted by DipDog3 View Post

     

    price target of $777? Really?

    Where is the justification for this?


     

    No kidding!  Why didn't they make it $777.77 and 94/100ths.  After all, their analytical algorithms surely provide predictive accuracy worthy of four decimals' precision.  Right?  /s.

     

    Or were you disputing Cantor Fitzgerald's competence to offer ANY prediction?

  • Reply 7 of 8
    SpamSandwichSpamSandwich Posts: 30,429member

    Bull!

     

    White is playing the analyst game (as usual) to heighten expectations to asinine levels so the shorts and other such bottom-feeders can further manipulate the stock.

     

    QFT, White.

  • Reply 8 of 8
    dipdog3 wrote: »
    price target of $777? Really?
    Where is the justification for this?

    Analysts studying their own stool samples...
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