Mac sales slow, Leopard

Apple is due to report its March quarter results on April 25th, and is likely to reveal Mac sales toward the lower-end of expectations due to a pause ahead of Mac OS X Leopard's launch alongside anticipation for new 8-core Mac Pros, according to American Technology Research senior analyst Shaw Wu. Nevertheless, Wu says iPod sales appear better than expected and that Macs are poised to fly off the shelves after Apple launches Mac OS X Leopard. The analyst is modeling $5.12 billion in revenue, $0.63 in earnings-per-share, 1.4 million Macs, and 10.3 million iPods for the March quarter. American Technology Research maintained its 'buy' rating on Apple shares but raised its price target to $118 from $115 based on a 27x multiple on its calendar year 2008 earnings-per-share of $3.86, as well as $13.44 in net cash.

"We are reducing our near-term Mac unit assumptions but raising our overall estimates due to more favorable component pricing, better iPod sales, and resumed Mac growth," Wu wrote in a research note obtained by MacNN.

"Should Apple shares pull back at on short-term concerns, we advise investors to buy the stock," the analyst noted.

American Technology Research previously predicted revenue of $5.05 billion, $0.60 in earnings-per-share, 1.43 million Macs, and 9.2 million iPods v.s. Wall Street consensus at $5.2 billion in revenue and $0.63 in earnings-per-share. Apple's own guidance suggested $4.8-4.9 billion in revenue and $0.54-0.56 in earnings-per-share.

"For the June quarter, Apple will likely offer its usual conservative guidance. We are modeling $5.3 billion and $0.65 (from $5.3 billion and $0.62) which compares to consensus estimates of $5.5 billion and $0.68," Wu wrote.

by MacNN Staff