Apple Earnings Expected to Beat Estimates

Sharply lower prices for NAND flash memory are expected to drive first quarter earnings at Apple Inc. (AAPL) to $1.75, according to Citigroup’s Richard Gardner. This compares with both his prior, and the consensus estimate of $1.59 to $1.60 per share.

He expects second quarter guidance will be in line with consensus. This will lead to a rally in Apple shares, but a seasonal pullback in the first half of calendar 2008 is also anticipated, the analyst told clients in a note.

Mr. Gardner now expects Apple to ship 2.4 million PCs in the first quarter on “very strong flat panel iMac demand,” which represents a 49% year-over-year gain and 11% on a quarterly basis.

His iPod forecast declines by 1 million units to 24 million to reflect lower shipments of the iPod touch.

The analyst said that:

iPhone shipments could be a bit below the Street’s 2.5M estimate due to European consumers’ preference for 3G. However, this shortcoming should be remedied within 1-2 quarters.

Mr. Gardner reiterated his “buy” recommendation and $215 price target for Apple shares.

The company is expected to report results for the first quarter of fiscal 2008 on Jan. 22.

Comments

[User 140627:]

Didn't we learn yesterday what iPhone sales were in the last quarter? Steve Jobs said yesterday they've sold 4M iPhones to date, and we know they officially sold 1.4M in the previous quarter so some simple math would give you close to 2.6M sold in this last quarter, above the 2.5M mentioned above. Am I missing something?

2008 Jan 16 09:30 AM

[mike hough:]

140627. No you are not missing anything at all ......except expecting analysts to be accurate.

We can now expect a batch of such experts to tell us that the company they trashed as 'missing targets' is now a 'buying opportunity' because they expect it to 'beat' targets. Of course they will make sure to tell their clients a day or two before they publish so the public will rush in and buy before Jan 22 and thereby fulfill the predictions made to their clients. No doubt they will then claim to be spot on with their predictions. All they need to do then is scream recession so loud that the taxpayer is obliged to bail them out of their subprime mess they put the world in etc etc. As the Times put it this morning:

"In the case of Morgan Stanley, for example, the $5billion of new funding raised from the Chinese Government has been almost exactly matched by an increase in the bonus pool for payment to its supposedly talented employees. Citi, meanwhile, after paying out more than $100million to its sacked chief executive, is now planning to pay out roughly half the new capital it raised this week as a dividend next month."

2008 Jan 17 06:48 AM