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AAPL Stock: 111.78 ( -0.87 )

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Apple aims high for the holidays

updated 02:35 pm EDT, Tue October 23, 2007

Apple's holiday guidance

Apple surprised investors yesterday when it announced unusually high expectations for the upcoming holiday shopping season, suggesting that the company foresees outstanding sales in the months ahead. The Cupertino-based company historically exercises caution when guiding investors on what to expect in the coming quarter, but has offered guidance for its December quarter higher than most Wall Street estimates. One analyst asked Apple executives during yesterdays conference call why the iPod maker told investors to expect such high earnings in the coming quarter, which are well above the norm even for the holidays. Apple said it settled upon higher guidance based on the reasonable possibility that the company can achieve its projected earnings.

Senior analyst Gene Munster of Piper Jaffray believes Apple may well achieve its goals, primarily due to its "strongest ever" product lineup.

"With Apple becoming notorious for providing overly conservative guidance, the biggest surprise of the quarter may be that the December quarter outlook was ahead of Street consensus," Munster said. "Apple's product lineup for this holiday season is undoubtedly its strongest ever and we believe this will allow the company to achieve and likely exceed expectations."

The analyst warned investors that Apple is unlikely to beat its December guidance to the same degree as it has in the past 11 quarters, but believes the company is still likely to exceed expectations when it reports its December quarter results.

Piper Jaffray maintains its 'Outperform' rating on Apple shares, but raised its price target to $222.




by MacNN Staff

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Comments

  1. jimothy

    Joined: Dec 1969

    0

    Something good coming?

    Some goodies must be coming in the next couple of weeks for such optimism. Macbooks and iMacs are probably the best selling Macs during the holidays, and the Macbook is definitely due for an update. The iPods have all been refreshed recently, and will certainly sell quite well, along with the iPhone.

    Personally, I'd loved to see a Macbook Pro update, but just because I'll soon be in the market. Such an update doesn't tie in to the holiday retail season, though.

  1. njfuzzy

    Joined: Dec 1969

    0

    Simpler answer...

    Apple has a new OS coming out one month before the holiday shopping season.

    People held off sales this quarter because of it-- and traditionally, the pro machines more so, because those users know the release schedule. First, that shows that the current results were possible even with people waiting. Second, it suggests a Leopard surge on top of the usual holiday surge. That could be the perfect combination.

    Plus, I suspect Apple has one more new product ready for a mid-November release. A ThinBook, a new MacPro, a Mac nano, or the iPhone nano seem the most likely (in that order). That could drive sales on the highest or lowest-end, all of which means a nice Christmas for my stock portfolio. ;)

  1. PookJP

    Joined: Dec 1969

    0

    Not about products...

    Apple wants their stock price to fall and the easiest way to do that is to not meet earnings. Their market capitalization is dramatically disproportionate to their current size as a company, and this inflated stock price might actually hurt them in the future if they don't get it under control.

  1. Eriamjh

    Joined: Dec 1969

    0

    Intentionally deflate?

    Do companies intentionally deflate their stock? Why not sell now knowing a disappointing quarter (projection-wise) is coming. That's called insider trading and is illegal.

    A projection should be just as easy to miss as to hit. Anything less is underestimating and anything more is... the opposite. Projections should be accurate.

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