A Prediction About Apple's Earnings (AAPL)

| About: Apple Inc. (AAPL)

By Carl Howe

Apple Computer will announcing its earnings at the close of the market today. Steve Jobs has already told the world that Apple had a terrific holiday quarter: The company sold 14 million iPods (vastly exceeding even the most optimistic estimates) and made $5.7 billion in revenue. But the real question is, how much of that fell to the bottom line?

Well, we dusted off the model we used last quarter to estimate iPod sales and production, updated it with the new numbers, and then gazed into our crystal ball. The result? We predict that Apple will earn about $548 million for its first quarter of the 2006 fiscal year (their fiscal year starts October 1). That nets out to around $0.68 per share. That's one penny short of the highest analyst expectation currently recorded, but it feels about right. [Editor note: Consensus analyst estimates are for $0.63/share earnings on $5.47 billion in revenue]

That's 94% earnings growth over last year's $0.35 per share, on 57% growth in revenue. But that estimate doesn't factor in any cost reduction efforts or upside surprises from any part of the business other than iPods and computers, so Jobs still could blow out that number.

Regardless of what I think, we'll find out the real answer this afternoon.

AAPL 1-yr chart:



« Any opinions expressed on the Seeking Alpha sites are those of the individual authors and do not necessarily represent the opinion of Seeking Alpha or its management. »