Analysts Remain Cautious on Apple's Q4

| About: Apple Inc. (AAPL)

A couple of interesting notes Monday on Apple (OTC:APPL), which will report third quarter earnings October 18, a week from Wednesday.

Shaw Wu, of American Technology Research, says he expects the company to report third quarter results at the upper end of the company’s previously forecast range - or maybe higher. Apple has projected revenue for the quarter of $4.5 billion to $4.6 billion, with per share earnings of 46-48 cents a share.

But Wu also says that sell-side consensus estimates for the December quarter are “unreasonably aggressive,” at about $6.5 billion. He expects Apple’s guidance for the December quarter to be in the $5.7 billion to $6.1 billion range; Wu himself is at $6 billion. “With a potential soft reset in December quarter sell-side estimates, AAPL shares will likely see a pull-back,” he writes. “We maintain our Buy rating as we advise investors to take advantage of this weakness and aggressively buy AAPL in the high-$60s as we believe AAPL remains among the best positioned technology companies.”

Jonathan Hoopes, an analyst with ThinkEquity
, after recently setting a $100 price target on the stock, wrote a note Monday in which he seemed fairly annoyed that the stock has not performed very well in the wake of his call. “Our checks indicate investors could be overly concerned about the December quarter,” he says. “Never in the history of the PC has a company been better postioned than Apple is at this time to both gain share and improve profitability, in our opinion. Reiterate Buy rating.” Hoopes is carrying a December quarter revenue estimate of $6.7 billion, way above what Wu expects.

Meanwhile, Apple is not entirely out of the woods on its stock option problems.

The New York Times today reports that Federal prosecutors have been briefed on the findings of Apple’s internal investigation, but that it is unclear who at Apple the prosecutors might be focused on. The Times quotes Lynn Turner, a former SEC chief accountant, and now a managing director at corporate governance advisory firm Glass, Lewis to the effect that the company’s board tried to keep attention away from Jobs and the current directors by pushing former CFO Fred Anderson from the board. “I would say that Jobs and the Apple board threw Fred under the bus to keep it from hitting them,” Glass told the Times.

AmTech’s Wu notes that the company will likely report only limited financial results next week, due to the pending restatement of previous financial filings.

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