TMO Reports - Analyst Warns of Limited Upside for Apple's Quarterly Numbers

by , 1:15 PM EDT, April 13th, 2005

Apple's upside for the March quarter is limited, according to a Wall Street analyst. In a research note to clients obtained by The Mac Observer, Banc of America Securities analyst Keith Bachman warned clients that Apple's upside is no more than 24-25 cents per share in earnings, which is two to three cents per share higher than consensus estimates, and four to five cents per share higher than Banc of America's estimates of 20 cents per share.

"For March, we are looking for US$3.0 billion in revenues (versus consensus of $3.2 billion), and EPS of $0.22 (versus consensus of $0.24), which is based on 4.6 million iPods," he wrote. "Using a different set of assumptions, including iPod units of 5.7 million, we believe that Apple could deliver EPS upside of $0.04 to $0.05 higher than our published estimate. We believe that investors looking for more potential upside than this will be disappointed."

Mr. Bachman maintained a Buy rating on AAPL, based in part on strong growth in the online music download business, though he believes Apple will lose market share going forward.

Apple's shares tumbled more than 3% in morning trading, and are currently trading down by a dollar per share in heavy volume.

Apple will announce results for the March quarter, the company's fiscal 2nd quarter, today, April 13th, 2005, after the markets close. The Mac Observer will cover the results as soon as they hit the wires.

*In the interest of full disclosure, the author holds a small share in APPL stock that was not an influence in the creation of this article.  

If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.