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.
Fresh-Faced Recruit
Joined: Sep 2000
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.