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AAPL Stock: 116.47 ( + 0.16 )

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Analysts contemplate tougher times for Apple

updated 10:05 am EDT, Wed October 22, 2008

Analysts on Apple Q4

Apple is beginning to experience harsher conditions than it is used to, say analysts in the wake of yesterday's Q4 results call. Researchers from Needham & Co. comment that Apple's guidance for the next quarter is "downbeat," as a result of worries about a looming recession. UBS' Maynard Um is still more pessimistic, downgrading Apple's rating from "Buy" to "Neutral" based on the economy, which Um suggests will hurt Mac sales. The company's average selling price of the iPhone, $635, is further said to be "unsustainable" in a competitive environment with longer replacement cycles. Um's price target has slid from $125 to $115.

Needham, UBS and Piper Jaffray all agree on disappointment with Mac shipments for the quarter, which amounted to just over 2.6 million, as opposed to the 2.8 million expected in many quarters. It had been thought that Apple's giveaway of iPod touches and nanos during its Back-to-School promotion would fuel higher Mac numbers.

iPod shipments of about 11 million are said to either be in line with expectations, or below them; Piper observes that iPods or no longer a key growth driver for Apple, and shipments may be expected to shrink in year-over-year terms by 16 percent in the next quarter.

The analysts are not universally pessimistic however, due in great part to Apple's shipment of nearly 6.9 million iPhones, which Um contrasts with UBS' predictions of 4.2 million. In this regard, Apple's non-GAAP results -- which include the Apple TV and the iPhone -- are said to be surprisingly high, producing $2.69 EPS off $11.7 billion in revenue, compared to UBS forecasts of $1.37 and $9.5 billion.

Both Needham and Piper have taken optimistic views on Apple's long-term prospects. The latter says that the iPhone, new iPods and the new MacBooks (including a $999 model) should allow it to fare well in a bad economy. Needham says it is keeping with its "buy" rating, as well as an extremely high price target of $240. The only substantial downside is said to be the FY09 GAAP EPS estimate, which is being reduced from $5.95 to $5.65.




by MacNN Staff

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Comments

  1. G-Force

    Joined: Dec 1969

    +3

    Harsher conditions?

    Harsher conditions than it's used to? You're talking about a company that nearly went bankrupt in the '90s. Somehow I doubt the times ahead will be that bad for Apple anyway.

  1. Bobfozz

    Joined: Dec 1969

    0

    Analysts

    The first 4 letters of the word "analyst" shows the true colors of these people who can not recommend anything to save their life but only to downgrade a company who has done better than their expectations ever figured. G-Force is on target.

    I would like to see these analysts "targeted" for their vision. When they are wrong enough times (once?) their views on ANYTHING, including MS, should be totally dismissed.

    If Apple is off by a 100,000 of anything they are flawed. If they do well, they haven't done well enough. These chumps are annoyed that Apple doesn't let them be privy to inside information--and heaven only knows I they had it what they would do with it.

    Are there any objective and worthwhile analysts out there who aren't constantly complaining?

  1. jhawk95

    Joined: Dec 1969

    +1

    This just In.......

    We interrupt your regularly scheduled show for this important news..... some ANALysts are saying that tough times may be in for America in the near future. Even tho it was already known that we are just heading into a deep recession, these highly over-paid ANALysts have just determined that only ONE company will be affectd by the downturn in the economy and are determined to destroy it with false reporting. Now, back to Lavern and Shirley!

  1. horvatic

    Joined: Dec 1969

    +1

    That's ANAL-IST!

    Where do they get there information from? Mars?
    Did they just not come out of a meeting with Apple that just beat there expectations by a mile! Did they not listen to the facts? Apple has 25 BILLION DOLLARS IN THE BANK AND NO DEBT! Products are selling at 2 to 3 times better than the PC market. Hello? These guys are apparently DEAF, DUMB, and BLIND!
    Apple should be at $200.00 a share at minimum with the momentum they have going while everyone else can't sell anything at a quarter of the price.

  1. Feathers

    Joined: Dec 1969

    0

    obviously...

    ...clearly there's only a few days left in the trading period for those who shorted Apple shares in advance of the conference call. These guys are not commenting on, or analysing the market, they are manipulating it with F.U.D. The S.E.C. badly needs to broaden the scope and definition of what constitutes market manipulation. These guys shouldn't be ridiculed, they should be jailed!

  1. danangdoc

    Joined: Dec 1969

    -1

    consistently wrong

    Analysts are just trying to keep AAPL stock prices down while they load up on it. If there's one thing that's nice to have in an uncertain world, it's consistency, and they have been consistently wrong! In 2015, when Apple owns Intel, IBM, Exxon, and more, World President Jobs will have the SEC investigate these hacks! Too bad they couldn't find a 'real' job.

  1. danangdoc

    Joined: Dec 1969

    -4

    consistently wrong

    Analysts are just trying to keep AAPL stock prices down while they load up on it. If there's one thing that's nice to have in an uncertain world, it's consistency, and they have been consistently wrong! In 2015, when Apple owns Intel, IBM, Exxon, and more, World President Jobs will have the SEC investigate these hacks! Too bad they couldn't find a 'real' job.

  1. starwarrior

    Joined: Dec 1969

    -2

    PC Dummies

    All these guys type on PCs.

  1. testudo

    Joined: Dec 1969

    -6

    Re: obviously

    ...clearly there's only a few days left in the trading period for those who shorted Apple shares in advance of the conference call.

    Um, the conference call was yesterday, that's what they are talking about.

  1. Guest

    Joined: Dec 1969

    +5

    Firewire!

    Think about all the money they're saving from eliminating firewire, and for using displayport! No longer do they need to pay licensing fees for DVI and VGA.

    And with 25 billion in cash, I'm sure they'll survive, and think of more features they can strip out of their products, while planning the final demise of the pro section of their business. (RIP Mac Pro soon..)

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