Analysts Frown On Impact From iMac Price Bump

March 21st, 2002 at 2:00 PM - News by Vern Seward

CNNMoney reports that analysts are unhappy after Appleis announced iMac price hike strategy. Appleis stock took a hit yesterday as a reaction to the iMac price increase, the article, titled iMac price hikes bruise Apple, says. Analysts seem to buy Appleis explaination for the increase, but lowered their profit expectations due to the implications of those reasons. From the article:

"While it is a good thing that Apple is taking steps to protect its margins, we believe that Apple did this very reluctantly, as rising prices are a rarity in the PC industry," J.P. Morganis Daniel Kunstler told his clients Thursday.

Kunstler trimmed his second-quarter earnings estimate for Apple to 6 cents per share from 11 cents per share, saying he believes "profitability on the new machines may have come close to evaporating in the quarter."

S.G. Cowenis Richard Chu also weighed in Thursday, telling his clients that although some of the impact of the higher component costs may be offset by tighter expense controls at Apple, he "wouldnit rule out" a possible 2-3 cents per share shortfall from his most recent estimate of 10 cents per share for the quarter.

By First Callis count, most analysts generally are expecting Apple to log a second quarter profit of 11 cents per share on roughly $1.4 billion in revenue.

You can read more in the full article.