updated 09:40 am EDT, Mon April 3, 2006
AAPL June outlook
Ahead of Apple's March quarter earnings announcement, American Technology Research analyst Shaw Wu has reduced his estimates on the company's June quarter and said that Wall Street's expectations are still too high, which could put additional pressure on the stock in the near-term. The company's stock is down more than 25 percent from its highs in mid-$80s. In the June quarter, Apple will likely try to reduce inventories of PowerPC-based Macs and the iPod nano as the company preps for new announcements, according to Wu. Without changing his forecasts for the March quarter, Wu reduced June quarter estimates to $0.44 per share profit on $4.4 billion in revenue and sales of 8.5 million iPods. In addition, the analyst believes that Apple will guide conservatively for June quarter during its March quarter conference call, which is scheduled for April 19th.
The revised estimates are down from $0.46, $4.5 billion, and nine million iPods and lower than consensus estimates of $4.8 billion in revenue, $0.48 EPS, and 10-11 million iPods, according to the note obtained by MacNN.
"Based on our proprietary checks with industry and channel sources, we believe
Apple's guidance for the June quarter will likely be conservative, in the range of $4.3-4.4 billion, or flat-to-up two percent from the previous quarter compared with its guidance of $4.3 billion for the March quarter," Wu wrote.
"With the Intel transition and high inventory of older iPod nanos, our sources indicate that Apple is aiming to work down inventories, particularly PowerPC Macs (iBook G4, 12- and 17-inch PowerBookG4s, and PowerMac G5) and 2GB/4GB Nanos in front of potential future product announcements."