updated 12:25 pm EDT, Thu October 12, 2006
Apple to rise on Mac sales
Senior analyst Gene Munster of Piper Jaffray today told investors to expect a slight upside on Apple shares for the September quarter as a result of strong Mac sales offsetting light iPod numbers. Munster's beliefs coincide with UBS analyst Ben Reitzes, who also sees a possible rise in Apple shares due to strong Mac sales. Munster believes Apple will report slightly above Wall Street's consensus of $0.50 on $4.67 billion, with iPod units likely shy of the 8.6 million expected by investors. "We believe continued Mac market share gains in the September and December quarters will be positive for Apple shares," Munster said. Apple is due to report its quarterly earnings on Wednesday, October 18th after the market closes. "Based on our checks with Apple specialist stores and our dissection of NPD iPod data, we expect the company will report slight upside for September." Wall Street consensus for September is $0.50 on $4.67 billion, and Apple's September guidance is $0.49-$0.51 on $4.50 billion to $4.60 billion. Munster also expects Apple to guide in line for December, with Street consensus amounting to $0.77 on $6.46 billion.
Current Street consensus revenue implies 39 percent quarter-over-quarter growth, which Piper Jaffray believes is conservative given the fact that last year Apple grew revenue 56 percent quarter-over-quarter in the December quarter.
Following analysis of NPD data for July and August, the firm expects iPod units of around 7.4 million. "When the third month of data is released, our analysis will likely lead to a different iPod unit figure than what our analysis suggests based on the first two months of data, given data for the month of September will include data related to the new iPods that are now shipping."
Apple's new iPods -- the second-generation iPod nano and iPod shuffle -- were only recently introduced on September 12th at a special event in San Francisco. "Given the new iPods that were just recently announced, we believe iPod units will end the quarter closer to Street expectations, but still shy of 8.6m. We are lowering our iPod estimate from 8.6 million to 8.2 million for the September quarter," said Munster.
September quarter Mac sales are expected to slightly exceed Wall Street's consensus of 1.47 million systems, and recent channel checks with 15 U.S. Apple specialist store resellers suggest that Mac sales are above expectations in the September quarter. The checks also revealed that more than 50 percent of specialist stores in the sample saw Mac sales for the quarter exceed expectations, and that 73 percent indicated they sold more MacBooks than expected.
"Mac NPD data for the quarter suggests strong year-over-year growth, driven by solid back-to-school spending," Munster said. "Given the positive nature of our checks and NPD data, we are slightly raising our September quarter Mac unit estimate to 1.49 million from 1.44 million."