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Analyst: Apple Surprises with Q1 Guidance

Analyst: Apple Surprises with Q1 Guidance

by , 11:30 AM EDT, October 23rd, 2007

Apple has spent the last eight quarters guiding below financial analyst estimates, but not this quarter. American Technology Research analyst Shaw Wu was surprised when Apple offered guidance above estimates for the December quarter.

During its fourth quarter earnings report on Monday, Apple offered guidance for its December quarter at US$9.2 billion in revenue with an EPS at $1.42, well above Wall Street's $8.6 billion and $1.39.

"Apple's December quarter guidance was the biggest surprise," Mr. Wu said. "The last time Apple guided in-line to higher than consensus estimates was for the December 2005 quarter."

The Cupertino company had been consistently offering conservative guidance and then reporting earnings above its own guidance, and in some cases above analyst estimates.

For the September quarter, Apple shipped 2.2 million Macs, leapfrogging Wall Street's optimizing 2 million estimate. The company also shipped more iPods than conservative 10 million estimates at 10.2 million.

Mr. Wu is maintaining his "Buy" rating for Apple's stock, but is raising his target price from $185 to $210. Apple is currently trading at $185.59, up 11.23 (6.44%).

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.

Observer Comments

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Close Name:Guest
Tue Oct 23, 2007 1:00 pm Subject: Something is up

I think it is because Apple probably has something up their sleeves that they will introduce before the quarter is up.

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Close Name:Bryan - TMO Staff Posts: 7340 Joined: 11 Jun 2001
Tue Oct 23, 2007 1:15 pm Subject:

Could be, Guest, but I think it more likely that European iPhone sales, Leopard sales, Christmas iPod sales, and ever-increasing Mac sales are what the company is expecting.

Apple has introduced very few products or product upgrades this late in the year since Steve Jobs came back. There have been a few incremental Mac bumps here and there, but even those have been few and far between this late in the season.

Accordingly, I don't expect anything else new before Christmas.

Bryan
Editor
TMO

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Close Name:Guest
Tue Oct 23, 2007 1:17 pm Subject:

Guest wrote: "I think it is because Apple probably has something up their sleeves that they will introduce before the quarter is up."
===

Perhaps about one of those secret features not yet released about Leopard???

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Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Thu Oct 25, 2007 4:55 pm Subject: Rumors, again ...

Quote
Guest wrote:
Guest wrote: "I think it is because Apple probably has something up their sleeves that they will introduce before the quarter is up."
===

Perhaps about one of those secret features not yet released about Leopard???

One rumored "secret feature" that may not be in Leopard quite yet is bittorrent distribution of HD movies. This would be perfectly legal, as you'd have to have a license to get the movies. The advantage would be that it would dramatically reduce the load on Apple's servers. Once there were some customers with a particular movie, other buyers would partially download from those people's computers. It could be faster for the buyer, too, because it wouldn't be dependent upon the speed of Apple's servers and trunk lines. That would be easy to add via an update to iTunes.

Another possibility, given that the Apple TV has the same sort of deferred-income accounting as the iPhone (which says that Apple will be adding capabilities), is being able to buy movies directly through the Apple TV, bypassing the computer. Today, the Apple TV can get trailers directly from Apple. Buying a movie could be a simple click.

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