iTunes may have 'notable' impact on earnings in 2005
updated 11:40 am EST, Tue February 22, 2005
Piper Jaffray on AAPL
Piper Jaffray today reiterated an "outperform" rating and $100 target price on Apple, saying the company's iTunes music-download service could begin to in calendar 2005 and 2006, according to Forbes.com. The research firm expects that iTunes revenue will account for 3.6% of revenue in calendar 2006, estimating that iTunes downloads for calendar 2005 could reach 513 million versus the current estimate of 387 million and that 2006 iTunes downloads could reach 1.0 billion versus the current estimate of 542 million.
The firm said that an estimated 5% iTunes Music Store operating margin would generate incremental earnings per share in 2006 of 4 cents, while 7.5% margins would add 6 cents per share to earnings. Piper Jaffray said that price-to-earnings multiples for Apple shares haven't factored in the "massive success" of the iPod nor the iPod's "halo effect" that is expected to carry over to Apple's core Mac business, according to the report.
Senior User
Joined: Jul 2002
Run rates
If they watched the Keynote, they would know iTunes run rate is 1.25 million/day. Or 450 million a year. It doesn't take a genius to know iTunes sales rate is INCREASING. I think we may pass 1 billion total sometime late this year.