Analyst: Mac, iPod Likely Driving Strong Quarter

Apple is due to report its December quarter earnings later on Tuesday, and American Technology Research analyst Shaw Wu expects the company to once again beat its own guidance.

"Based on our supply chain analysis, we continue to expect Apple to beat its guidance substantially (US$9.2 billion in revenue and $1.42 in EPS). We are modeling $9.4 billion and $1.63 (consensus at $9.47 billion and $1.62)," Mr. Wu said. "We remain comfortable with our forecast looking for 25 million iPods, 2.3 million Macs, and 2 million iPhones."

Mr. Wu added that the Wall Street consensus has moved closer to his Q1 estimate, and that the Streetis earlier prediction that Apple may have been too aggressive in its outlook appears to have been misguided.

Looking forward, Mr. Wu expects Apple will guide conservatively for its March quarter. "We believe AAPL will likely continue its tradition of conservative guidance to help set more realistic expectations. This quarter is typically characterized by a seasonal decline in iPods," he said.

Appleis March quarter may show $6.9 billion in revenue and $1.10 EPS, according to Mr. Wu. The market consensus is $7 billion in revenue and $1.09 EPS.

Mr. Wu is maintaining his "Buy" rating and $210 target price. Apple is currently trading at $156.12, down 5.24 (3.25%).

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