Analyst lowers estimates

Apple's iPod has been the driving force for the company's growth in the past, but going forward, Macs will become a more signficant part of its future, according to one analyst. Merrill Lynch analyst Richard Farmer has lowered his iPod sales estimates by 12 percent from 8.1 million units from 9.2 million units for the June quarter based on historical sales data. The analyst also lowered full-year sales estimates of the popular portable media player to 39.4 million from 43.4 million units. However, Farmer increased his Mac computer revenue growth estimates "given what appears to be a decent early reception to new MacBooks," according to The Associated Press. "As iPods decelerate, the Apple story becomes more dependent on upside to Mac estimates, which we see as plausible," he wrote. Farmer maintained a "Neutral" rating on the stock but lowered his revenue and earnings estimates to a 2006 per-share profit of $2.01 on $18.9 billion of revenue, compared with prior estimates of $2.13 per share on revenue of $19.9 billion.

Analysts polled by Thomson Financial estimate 2006 earnings per share at $2.08 on revenue of $19.56 billion. Merrill also slashed its 2007 estimates to $2.55 per share on revenue of $22.9 billion, down from is previous estimate of $2.84 per share on sales of $25 billion, according to the report. "On average, Wall Street predicts Apple will post 2007 earnings per share of $2.61 on revenue of $23.6 billion," the report noted.

by MacNN Staff