Canaccord Lowers AAPL Target on Missed iPhone Sales

Apple sold 51 million iPhones during its first fiscal quarter for 2014, coming in under Canaccord Genuity analyst Michael Walkley's expectations. That, coupled with his expectation that Q2 iPhone sales will be seasonally lower, has Mr. Walkley lowering his target price for Apple's stock, but still sees strong enough prospects to maintain his "Buy" rating.

Apple missed analyst's quarterly iPhone sales expectationsApple missed analyst's quarterly iPhone sales expectations

"Total sales were below our expectations due to softer than anticipated iPhone sales of 51 million versus our 54 million estimate," Mr. Walkley said. "While we anticipated softer Q2/fiscal 2014 sales with seasonally lower iPhone and iPad product sales post the holiday quarter, Q2/fiscal 2014 guidance was below our expectations."

Apple reported its first fiscal quarter earnings for 2014 on Monday with US$57.6 billion in revenue and $13.1 billion in profit. The company sold 512 million iPhones, 26 million iPads, and 4.8 million Macs.

Mr. Walkley's lower target price also comes with lower earnings per share estimates. For 2014 he's now projecting $42.86 with revenue at $180.5 billion, and $47.56 for 2015 with $193.4 billion in revenue.

Despite his disappointment, Mr. Walkley still sees a positive future for Apple. "Given the anticipated sell-off in the shares tomorrow combined with our belief Apple has a stronger pipeline of new products for calendar 2014 versus calendar 2013, we maintain our Buy rating," he said.

Apple closed on Tuesday down $44 (7.99%) at $506.50. The company's stock is trading after hours at $508.50, up 2.00 (0.39%).