The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
Apple Avoids Intel Hit for Now

Apple Avoids Intel Hit for Now

by , 11:30 AM EDT, April 20th, 2006

Needham & Company financial analyst, Charles Wolf, notes that Mac sales for the second quarter of 2006 fell within projections. During the next two quarters, however, there is the potential for sales to drop off while Apple finishes transitioning the Mac product line to Intel processors. Once the process is completed, Mac sales are likely to surge now that they can also run Windows XP.

Mac sales for the quarter were essentially on target with Needham estimates at 1.11 million units, compared to the projected 1.15 million units. Mr. Wolf estimated conservatively on iPod sales, and Apple exceeded his expectations. He predicted 8 million units, and Apple actually shipped 8.5 million.

Although iPod sales are slowing, Mr. Wolf expects to see continued growth through the rest of the year. He commented "Growth in iPod shipments is clearly slowing, as it must, because shipments have already reached so high a level. However, we anticipate shipment growth around 40 percent for the remainder of this year."

Just as it was for many analysts, Apple's gross margin was a surprise for Needham, too. Dropping prices for Flash memory are responsible in part for the 29.8 percent margin.

Despite the fact that Mr. Wolf feels Mac sales will surge in 2007, he is not building that into his forecasts for now. Needham & Company is maintaining its "Hold" rating until the transition away from PowerPC to Intel processors is further along.

Mr. Wolf is raising Apple's Earnings Per Share (EPS) for fiscal 2006 from US$2.04 to $2.05, and the 2007 estimate to $2.58 from $2.49.

Apple stock is currently trading at $68.06, up 2.41 (3.67%).

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.

Recent Headlines - Updated November 29th

Mon,12:40 PM
Three Ways to Protect your Apple Watch (and One Way Not To)
Fri,7:26 PM
$100 off iPad mini 4 for Black Friday
7:11 PM
iPad mini 2 for $199 at Walmart for Black Friday
6:18 PM
$100 and $125 off iPad Air 2 for Black Friday from Best Buy
5:23 PM
20% iTunes Cards from Best Buy Back on for Black Friday
5:15 PM
20% Off iTunes Cards from Ebay/PayPal
8:03 AM
Black Friday Blowout 15% Discount on TMO Deals
Thu,10:32 AM
Happy Thanksgiving from The Mac Observer!
Wed,7:53 PM
Awaken the Force with these Free Star Wars Apps
5:28 PM
How to Pair Bluetooth Headphones with Your Apple TV
4:40 PM
Pay What You Want for the Learn to Code Bundle
4:27 PM
ACM 334: Apple’s Mac Pro vs. The Devil’s Advocate
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!