Piper Jaffray Sees Apple as On Target

Apple Computeris second quarter earnings were in line with Piper Jaffray analyst Gene Munsteris expectations, and the rest of the year looks to be on track, too. The second half of the year should see an increase in sales, and the December quarter is likely to see a marked jump, bringing with it a higher likelihood of improved earnings.

Apple offered guidance for the June quarter during its earnings conference call on Wednesday, but that guidance is being seen by some as overly conservative. Apple based its guidance on holdout buyers waiting for an Intel chip-based version of the iBook. Mr. Munster expects Apple will ship the iBook replacement sometime this summer.

The second half of the calendar year is also likely to draw more interest from investors as Apple finishes its transition away from PowerPC chips in Macs, and replaces the iBook, Power Mac G5 and Xserve with Intel-based versions.

Mr. Munster sees investment benefits stemming from full availability of the MacBook Pro line, new Mac releases, new iPods, including a larger screen video model, and higher capacity nano, and seasonal sales increases. Although not included in his numbers, the release of an Apple branded cell phone, would be a positive driver for Appleis bottom line.

He commented "The wild card in the next year remains the iPhone. While not in our numbers, we believe an iPhone will be a significant driver to Appleis business."

Piper Jaffray is maintaining its "Outperform" rating on Apple, but it is lowering its target price from US$103 to $99 with an EPS of $2.19.

Apple stock is currently trading at $69.43, up 3.78 (5.76%).

<!--#include virtual="/includes/newsite/series/stockwatch.shtml"-->