Analyst: Apple Will Meet or Slightly Miss Wall Street Estimates

Piper Jaffray analyst Gene Munster on Tuesday issued a research report in which he said that he expects Apple to meet or slightly miss Wall Street estimates when it reports its March quarter earnings tomorrow. During its last earnings conference call in January, Apple said it expected US$4.3 billion in earnings and $0.42 EPS (earnings per share) for the first quarter of 2006, while the Street consensus has been $4.54 billion and $0.43 and Piper Jaffray has targeted $4.65 billion and $0.47.

Apple never provides guidance on iPod and Mac sales, not counting CEO Steve Jobsi pre-earnings revelation during his January Macworld keynote that the company sold 14 million iPods in the December quarter. That leaves analysts to make their best guesses based on available data. The Wall Street consensus is currently 1.16 million Macs and 9.2 million iPods sold during the previous quarter; Piper Jaffray is expecting 1.3 million Macs and 9 million iPods.

Based on data supplied by NPD Group, Mr. Munster said in his report that he thinks Apple will meet or slightly miss his expectations for iPod sales, while Mac sales will likely be closer to Wall Streetis number. Whereas the quarter-to-quarter dip in iPod sales is clearly a post-holiday lull, constrained MacBook Pro availability hampered overall computer sales, he explained.

"[There were] about two weeks in the quarter where [MacBook Pro] supply was able to meet demand," the analyst wrote. "We believe iMac sales were strong in the quarter, but given the lack of MacBook Pro supply, our 1.3 million Mac estimate will likely prove to be too high."

Looking ahead, Mr. Munster expects Apple to provide June quarter guidance that is flat or slightly up compared to the previous quarter. The current Wall Street estimate is $4.74 billion in revenue and $0.47 EPS, while heis looking at $4.69 billion and $0.52.

"Following the March quarter results report," he wrote, "we believe the Street will start to place more focus on the back half of CY06, which will benefit from: 1) full availability of Macs (MacBook Pro), 2) new Mac releases (iBook, Power Mac), 3) new iPods (larger screen video iPod, higher capacity nano), and 4) tailwind from seasonality."

He retained his "Outperform" rating, with a $103 price target. At 1:04 PM EST on Tuesday, Apple shares were selling for $66.03, up 1.88% for the day.

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