Apple reported record breaking fourth quarter revenue on Tuesday, but didn’t meet analyst expectations. Canaccord Genuity’s Michael Walkley thinks anticipation ahead of the iPhone 4S launch kept some customers out of stores, but that Apple sales are still going strong.
“Apple reported weaker than expected September quarter results, as iPhone sales were below our and consensus estimates,” Mr. Walkley said. “We believe iPhone sales slowed ahead of the iPhone 4S product launch, as our checks indicate strong global demand. Despite this transitional quarter, we continue to anticipate strong earnings growth for Apple with record holiday sales during the December quarter.”
Mr. Walkley predicted Apple would sell 19.8 million iPhones during the quarter, but the actual figure came in at 17.1 million. He also overestimated Apple’s 11.1 million iPad sales at 11.3 million.
Mac sales, however, came in above his 4.4 million unit estimate at 4.9 million.
Despite the fact that Apple missed his sales expectations, Mr. Walkley doesn’t thing interest in products like the iPhone is waning.
“We believe demand remains very strong for the iPhone as evidenced by the record iPhone 4S launch,” he said. “We also anticipate strong holiday sales for the iPad and iPod products, and we expect record December quarter sales.
He added that Mac sales have outpaced industry growth for 22 consecutive quarters, and that he expects that trend to continue into 2013.
Looking forward, Mr. Walkley expects Apple will report US$36.6 billion in revenue for the first fiscal quarter of 2012 with an EPS of $9.02. Apple offered guidance for the quarter at $37 billion in sales and a $9.30 EPS.
Mr. Walkley is maintaining his “Buy” rating and $545 target price for Apple’s stock. Apple is currently trading at $403.06, down 19.18 (-4.54%).