RBC Expects Strong Beat from Apple

On expectations that Apple Inc.’s (AAPL) second quarter results will beat consensus estimates on Wednesday, RBC Capital Markets has raised its price target on shares of the Mac and iPod maker to $190 from $175, which is 19% higher than where it ended the week.

Analyst Mike Abramsky expects revenue of $7.2-billion, up 36% year-over-year, while the Street is at $6.9-billion. Earnings per share are expected to come in at $1.11, above the Street at $1.06, due to a 4% year-over-year foreign exchange revenue gain ($0.03¢ per share).

RBC’s data suggests 2.2 million Macs shipped in the second quarter, with related revenue of $3.4-billion. Estimates for the new Macbook Air were 150,000 units, or 11% of the total estimated portable sales of 1.3 million.

As for the iPhone, Mr. Abramsky estimates second-quarter sales were 1.8 million, with deferred revenue of $1.9-billion. While iPod shipments in the quarter are expected to fall roughly 5% to 10 million, the analyst believes this is already discounted in Apple’s share price.

His new fiscal 2008 estimates move to $32.7-billion for revenue and $5.26 per share in earnings. However, in-line with previous second and third-quarter outlooks from Apple, flat or lower guidance is expected.

Comments

[wallawallabingbang]

Hopefully, there will be no mass stupidity sellathon after earnings.

[seeksome]

It is amazing all these analysts saying AAPL is going to beat estimates where were they when it went down to $120.00?Now everybody is jumping on the bandwagon.iPhone acc. phones & unlock codes:
seeksomething.com

[seeksome]

It is amazing all these analysts saying AAPL is going to beat estimates where were they when it went down to $120.00?Now everybody is jumping on the bandwagon.iPhone acc. phones & unlock codes:
seeksomething.com

[freshsage]

i expect a big gain tomorrow and sell off on earnings unless they are a homerun

[Zach Bass]

It appears this time analysts are expecting flat or lower guidance for the third quarter. I would take this as no sell off if this is the case. But I get the feeling analysts are simply practicing the time honored analyst practice of CYA. Question: Why do we keep looking towards analysts if their most popular prognostication is "better/worse than expected."

You've got to feel for those covering Apple though, Apple holds thing close to their chest, with virtual information lockdown. It's one of the great mysteries in modern business, how Apple controls 10s of thousands of employees flap trap.

[Anthony Dadlani]

I agree. No sell off this time....higher after earnings.

thecreatingwealthblog....

[CrossProfit]

See our previous *comment* from January 2008 on an AAPL article here;

seekingalpha.com/artic...

See our additional previous *comment* from February 2008 on an article here;

seekingalpha.com/artic...

"We trust that the above eases the temporary pain of long term AAPL shareholders. If you haven't sold until now, then we would hold (now @$120 PS)."

Well, we didn't call the bottom of the bottom ($120) accurately (!) as AAPL went lower a couple of bucks, but for what it's worth, the call was accurate enough to be actionable.

Read previous comments carefully in order to get a handle on how to maximize investing in AAPL and the fallout ramifications for RETAIL in general.

CrossProfit (consensus)

[Rob L]

If Apple does go down, the only reason is going to be lower than desired guidance which will get me really pissed off. After last quarter I used it as a buying opportunity (as low as 115.5!!!!!) since I didn't see any fundamental change in the business but I'd like to have the shares run up past $200 again so I can take some profits. Jobs better not screw us again or my love for Apple is doing a 180.

[Jon T]

I firmly believe that the stupidly overcooked sell-off in January was a direct result of the guidance. It was low, and seemed worse by virtue of the fact that Apple had high-balled the previous quarter. Which is something most people had forgotten.

[imthewiz]

After the last debacle they should give no guidance.

[AJ, Washington DC]

nope, mass stupidity sellathon seems to be happening BEFORE earnings. And based on what??? Wu's downgrade to Neutral isnt so bad... his comments were generally positive. Why these massive fluctuations on no news? Is everyone expecting AAPL to do a GE and spring a surprise miss?