Shaw Wu of American Technology Research and Gene Munster of Piper Jaffray on Thursday issued research reports in reaction to Appleis Wednesday earnings announcement, during which it highlighted the numbers from its second-best financial quarter in its history. Both analysts were pleased with Appleis numbers.
Mr. Wu wrote: "The surprises in the quarter were strong Mac shipments of 1.33 million units (vs. consensus of 1.2-1.25 million) and the higher gross margin of 30.3% (vs. its guidance of 28.4% and our forecast of 29%) driven by continued favorable NAND flash pricing ... We continue to believe that new iPod nano refreshes will most likely occur in the late-September/October timeframe."
He added: "We believe the key take-aways are that the Mac business is showing signs of re-acceleration with the Intel transition about 75% complete and iPod demand remains relatively healthy, despite fears to the contrary."
Mr. Munster shared his counterpartis conclusions regarding Appleis Mac business, explaining: "We expect over the next several quarters Mac market share will inch upward driven by the full availability of Intel-based Macs, a renewed Mac ad campaign and the halo effect."
As for the iPod, the analyst noted: "September quarter guidance suggests new iPods will be announced late in the quarter and will not have a material impact on numbers. The Street had been mixed on whether a new iPod would make it out in the September quarter. The Street was looking for $5.0b in revenue for September, while guidance calls for $4.55b. We attribute $200m of the lowered estimates to timing of the new iPod and the balance to Appleis conservatism."
Mr. Munster continued: "We believe the market for MP3 players remains under-penetrated and we estimate approximately 12% of people in the U.S. have an iPod. We expect to see the iPod numbers reaccelerate with new products and seasonality in the back half of 2006."
Mr. Wu reiterated his "Buy" rating on the companyis stock, with a US$75 price target, while Mr. Munster kept his "Outperform" rating, with a $99 price target. At 1:41 PM EST on Thursday, Appleis shares were selling for $61.22, up 13.16% from its closing price the day before. While the stock logged a modest increase on Wednesday, its gains accelerated significantly in after-hours trading, when Apple released its numbers for the previous fiscal quarter.