Analyst: Mac Sales to Disappoint, iPod Sales to Please

Apple will likely report Mac sales at the lower end of analyst expectations during its second quarter earnings conference call on April 25, according to American Technology Research analyst Shaw Wu. iPod sales, however, will likely be above expectations.

Mr. Wu expects Apple will report between 1.37 and 1.5 million Macs sold for the March quarter.

The disappointing Mac sales are the result of a pause in buying as consumers waited for the release of 8-core Mac Pro models, and in anticipation of the release of Mac OS X 10.5 (Leopard). While the new 8-core Macs are available now, Leopard isnit expected to be released until Appleis World Wide Developer Conference on June 11.

Once Leopard is available, Mr. Wu predicts that Mac sales will start to climb again. He said "Following the likely launch of Leopard at [Appleis] WWDC 2007 conference starting on June 11, we believe Mac sales are positioned to resume accelerated growth."

Even though the quarteris Mac sales arenit likely to please investors, iPods sales should put a smile on their faces. Mr. Wu estimates that Apple will report 10.3 million iPods sold, up from his earlier estimate of 9.2 million.

Mr. Wu is now modeling US$5.12 billion in revenue and $0.63 in EPS for Apple based on 1.4 million Macs, and 10.3 million iPods sold. The market consensus is for $5.2 billion in revenue and $0.63 EPS, and Appleis guidance is for $4.8-4.9 billion and $0.54-0.56 EPS.

Looking forward, Mr. Wu expects Apple will offer its usual conservative guidance for the June quarter. He is modeling $5.3 billion in revenue and $0.64 EPS for the company.

Mr. Wu is maintaining his "Buy" rating for Apple stock, and is raising his target price from $115 to $118. Apple is currently trading at $91.98, down 0.61 (0.66%).

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