Apple Sept. letdown?

Apple's financial performance in the September quarter could lead to some disappointment, says analyst Keith Bachman of BMO Capital. Bachman comments that typically, Apple has forecast 3 to 5 percent sequential revenue growth in the September quarter, which this year would amount to between $7.7 and $7.75 billion. This is below the consensus estimate of $8.27 billion, and Bachman is expecting Apple to guide to EPS of $1 per share, rather than The Street's consensus of $1.24.

Bachman notes that while iPhone sales should rise to over 4 million in the September quarter versus June's 700,000, Apple has chosen to defer recognition over a two-year period. Cannibalization of iPod sales could have an immediate impact however, and the company could also be hit by low European demand. Offsetting this somewhat should be back-to-school sales.

Jeff Fidacaro, of Merrill Lynch, further warns that Taiwanese builder Quanta is reporting a decline in units produced for Apple, specifically in the iMac and MacBook lines.

Some optimism, says Bachman, stems from Apple's tendency to beat guidance, achieving approximately 10 percent in growth. This could mean about $8.1 billion in revenue and an EPS of $1.21, closer if still below Street predictions. Bachman has set a price target for Apple stock of $205.

Regarding the June quarter, whose results will be announced later this month, Toni Sacconaghi of Bernstein Research believes that revenue will be $7.6 billion with a $1.12 EPS, surpassing The Street's view. Mac sales are expected to increase 43 percent year-over-year, though iPods may only grow 5 percent, and iPhone growth could be marginal. Sacconaghi has a set a price target of $175.

by MacNN Staff