Apple may reveal upside

Apple is due to report its December quarter earnings this Wednesday after the market closes, and is on track to report results in-line to slightly above consensus at $6.4 billion and $0.78, according to American Technology Research analyst Shaw Wu. "We see continued strength in the Mac business (38 percent of revenue), up 11 percent quarter over quarter to 1.8 million units, with the Intel transition 100 percent complete and driven by Core 2 Duo processor speedbumps to its top-selling MacBook," Wu commented. "On the iPod side (40 percent), we see a continued rebound (up 77 percent quarter over quarter) to 15.5 million units from strength in iPod shuffle and special edition red Nanos." American Technology Research maintains its 'buy' rating with a $99 price target, noting that the Apple TV could be a surprise hit with its $299 price point.

Wall Street's consensus on out-quarter revenue estimates appear reasonable for the first time in over a year for the March quarter, according to the analyst, who believes the Cupertino-based company will guide conservatively but in-line to $5.2-5.3 billion in revenue. "We are modeling $5.2 billion and $0.63 (vs. consensus at $5.2 billion and $0.60)," Wu said. "We are forecasting a large sequential decline in iPods to 9.3 million units, but believe this will be offset by Apple TV shipping in February."

Earlier this month analyst Richard Farmer of Merrill Lynch said that momentum in iPod sales during the holiday shopping season combined with the possibility of new product announcements could create an upside to Apple's fourth quarter results, according to a

by MacNN Staff