Analysts See iPhone Pushing December Quarter Revenues

Two analysts are telling clients that they believe revenue from the sale of iPhones will push Apple’s December quarter revenues above expectations. Maynard Um of UBS believes that even with increased estimates that were raised in December, there remains room for upside when Apple reports on January 24th. Ben Reitzes of Barclays Capital said that, “revenue will be supported by strong international sales and potential upside to iPhones.”

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In a research note to clients obtained by The Mac Observer, Maynard Um wrote that, “Assuming 8 million iPhones from AT&T, 1.2 million from Sprint, and 4.2 million from Verizon, the U.S. alone would make up about 45 percent of our 30 million unit estimate for [the December quarter]. U.S. mix has not been this high since the June quarter of ’09 and [it] seems unlikely given the continued rapid expansion of international countries and carriers since that quarter.”

He noted that U.S. mix throughout 2011 was in the 25 percent to 29 percent range, and that going back to the December quarter of 2010, Apple’s U.S. mix for iPhone sales was 38 percent. If Apple matched that performance, the company will have sold some 35.3 million iPhones during the quarter, far above the 30 million units he had previously estimated. He added that each 1 million iPhone units translates into US$0.21 in earnings per share (EPS).

Mr. Um maintained his $510 price target and a “Buy” rating on shares of AAPL.

Ben Reitzes of Barclays Capital was a little more circumspect in his research note, which was also obtained by TMO. He wrote, “We expect Apple to post solid results across the product portfolio including iPhones, iPads and Macs. iPhones in particular seemed very strong with activations topping our estimates in the US across every carrier – and international availability expanding each week.”

Some analysts have expressed concern over iPad sales, particularly in light of the success that Amazon has had with its cheap Kindle Fire Android device. In contrast, Mr. Reitzes said that Apple could be “within range” of UBS’s estimates of 13.9 million iPads sold during the quarter.

“Our checks even became more favorable throughout the quarter for iPads given its popularity as a gift and international expansion,” he wrote, though he did add that, “iPads are a particular point of concern given increased competition and a September quarter shortfall.”

All told, he believes that his estimates for the full quarter of EPS of $9.66 and revenue of $38.95 billion will prove to be conservative. Apple guided for $37 billion in revenue, while Wall Street’s consensus numbers are currently at $38.17 billion in revenue and $9.85 EPS.

One more interesting tidbit from the Barclays research note concerns Apple’s March quarter, the company’s 2nd fiscal quarter. Mr. Reitzes noted that Apple has guided March quarter revenue to decline 27% quarter over quarter for the last three years. In each instance, however, Apple’s quarter over quarter sales have actually declined only 15%.

Apple is known for extremely conservative guidance, but that’s fairly significant. Mr. Reitzes believes that this year Apple will see an 18% decline quarter over quarter.

Barclays is maintaining an “Overweight” rating for AAPL, and a price target of $555.

Shares of AAPL ended the day higher on Thursday at $418.03, up $4.59 (+1.11%), on moderate volume of 9.6 million shares trading hands.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.