American Technology Research analyst Shaw Wu on Wednesday issued a new research report in which he said that while investors are concerned about Appleis conservative guidance for the current quarter, he believes they "may not be appreciating that AAPL still guided to what will likely be its second-best quarter in its nearly 30-year history."
He added: "We continue to believe that AAPL did the right thing to keep expectations in check." He noted that he continues to "remain comfortable" with his March quarter forecasts of US$4.4 billion in revenue and $0.42 in EPS. Apple said during its last earnings conference call that it expects to earn $0.38 EPS on $4.3 billion in revenue during the current quarter.
Reporting on feedback from his checks with industry and channel sources, Mr. Wu said that sales of the new Intel-based iMac and MacBook Pro "appear strong. We believe it may be fueled by customers who waited for Intel Macs and we see particular strength in education (K-12 and higher education), content creation, and consumer end markets."
The new laptop wonit ship until next month, at which time the analyst believes Apple will have "some difficulty building enough to meet demand. We are not too concerned as we believe this is a good problem to have instead of building too many for no demand."
Unsurprisingly, sales of the PowerPC Macs left in Appleis line-up -- iMac G5, PowerBook, iBook and Mac mini -- "appear to be lagging," Mr. Wu reported. He wrote: "We believe this may be due in part to AAPLis marketing message that INTC is much better than PowerPC, and so far price points are comparable with no discounts offered.
"We are seeing some customer confusion in the field but we do not anticipate this to last that long as inventories of PowerPC Macs appear fairly lean at around 3-4 weeks, which is likely the primary reason why AAPL hasnit offered discounts."
On the iPod front, Mr. Wu said that sales of the video-enabled iPod "remain strong and have seen the least seasonal decline within the iPod product family. We believe this is a favorable trend for iPod ASPs [average selling prices]. We are modeling $210 versus $207 last quarter."
Apple remains one of the analystis top picks. He maintained his "Buy" rating on the stock, along with his $101 price target. At 12:30 PM EST on Wednesday, Apple shares were selling for $74.54, down 1.97% for the day.