First Albany Raises Revenue & Earnings Estimates for Apple

Wall Street securities firm First Albany Capital has raised its revenue and earnings estimates for Apple Computer for the just completed March quarter. In a research note to clients obtained by The Mac Observer, analyst Joel Wagonfeld raised his revenue estimates by US$200 million to $3.5 billion for the quarter, with earnings per share of $0.25, up from $0.23. Strong demand for the iPod product line, as well as Mac mini and iMac G5 models were cited as the reason for raising estimates.

Apple reports results for the March quarter on Wednesday, April 13th, and consensus estimates for the company currently lie at earnings of $0.24 per share. Mr. Wagonfeld told his clients that he expects Apple to beat the consensus estimates, "based largely on higher-than-expected iPods and associated operating leverage."

He is currently projecting that Apple will announce it sold 5.5 million iPods during the quarter, up from previous projections of 4.5 million. That model yields $1.3 billion in iPod revenue, up from $1.06 billion, and another $206 million in revenues from iTunes Music Store downloads and iPod accessories.

In addition, he is projecting sales of $102 million for Mac mini during the quarter, which would represent somewhere in the neighborhood of 200,000 Mac minis sold. All told, he is projecting a year-over-year increase (in terms of revenue) of 51.2% higher Mac desktop sales and 5.1% higher Mac portable sales.

First Albanyis current model shows increased sales of iMac, new sales of Mac mini, which was introduced in January, and decreased sales of eMac and Power Mac. The same positive consumer trend is present in his model for portable sales, where iBook sales are up year-over-year, and PowerBook sales are down.

Mr. Wagonfeld maintained his Buy rating for Apple, which means that he expects the company to show "a potential return of 10%-20%."

Appleis stock traded higher on moderate volume through the early afternoon on Thursday.

*In the interest of full disclosure, the author holds a small share in APPL stock that was not an influence in the creation of this article.  

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