updated 10:15 am EDT, Fri October 19, 2007
Strong Q3 to boost Dec.
Apple is likely to beat internal estimates when it releases its third-quarter financial reports on Monday, says American Technology Research analyst Shaw Wu. Shoppers have bought an "unseasonably" large number of high-end products, which should bring in an estimated $6.05 billion in revenue, with an earnings-per-share (EPS) rated at $0.85 or higher; this surpasses Apple's figures of $5.7 billion and $0.65 EPS, or even the $6 billion and $0.83 EPS previously calculated by AmTech. Wu further notes that since Apple's Q207 report, stock has appreciated 26 percent versus a 6 percent gain in the NASDAQ, over and above a 51 gain in stock between Q1 and Q2.
Taken in combination, this data is said to favor stronger Q4 results than expected, once again trumping Apple guidance. Wu argues however that since holiday iPod sales tend to shift towards lower-cost players, investors should expect $8.1 billion in revenue and $1.25 EPS, instead of the consensus $8.6 billion and $1.38 EPS. Also, though Apple stock is expected to hit $185, it may be volatile and people should buy principally when shares retreat due to short-term concerns.