Apple Computer managed to report fourth quarter numbers above analyst expectations, driven by better than expected Mac and iPod sales. UBS analyst Ben Reitzes said that iPod sales were the big surprise with 8.7 million units sold, far better than the 8.1 million units he predicted. He commented that Apple saw "solid reception to the new [iPod] line announced on September 12th."
Mac sales also beat expectations. UBS estimated 1.48 million units, and Apple shipped 1.61 million. Strong demand for the MacBook during the back to school season helped to drive sales up.
Macworld 2007 is likely to bring new products, and the event will probably bring additional information about the upcoming iTV digital media hub. Apple could also announce new media related services during the Steve Jobs keynote.
On the possibility of a new video capable iPod, Mr. Reitzes comments "We continue to expect new video iPods (new media players) with bigger screens and more content deals for films to come in the upcoming months ? however we still do not expect any new video iPods until early 2007 after Macworld."
Looking forward, Mr. Reitzes is maintaining his first quarter 2007 EPS estimate of US$0.78 on revenues of $6.3 billion, which represents a 10 percent year-over-year increase. Estimates for fiscal 2007 earnings have been raised from $23.1 billion to $23.2 billion, and the EPS estimate has been increased from $2.70 up to $2.75 based on higher Mac and iPod sales.
Mr. Reitzes is also raising his target for Apple stock from $92 to $95, and he reiterates his "Buy" rating leading up to Macworld 2007 in January.
Apple stock is currently trading at $79.83, up 5.30 (7.11%).