Apple Inc. is likely to report a solid second quarter thanks to reduced costs for the components used to make Macs and iPods. Prudential analyst Jesse Tortora expects that stronger Mac sales will help the Appleis bottom line even in the face of weaker iPod sales, according to MarketWatch.
After meeting with Apple senior managers, Mr. Tortora increased his quarterly Mac sales estimate from 1.45 million units up to 1.6 million units. He also lowered his iPod estimate from 10.4 million to 9.9 million units.
He also increased his gross profit margin estimate from 30.5 percent to 31.5 percent based on dropping prices for NAND and DRAM memory chips which are used in iPods and Mac computers.
Mr. Tortora is maintaining his US$100 target price and "Neutral" rating for Appleis stock. Apple is currently trading at $89.33, up 0.13 (0.15%).