Analysts on Q3 results

Apple did better than expected in its third quarter results, say analysts from Needham, UBS and Kaufman. Needham's Charlie Wolf notes that revenue and EPS shot past official guidance, reaching figures of $8.3 billion and $1.35 respectively. Mac shipments were up 4.3 percent year-over-year, and iPhone shipments made it to 5.2 million. The iPhone is in fact the current driver of Apple growth, according to Wolf, backed by a distinct software advantage over other smartphones.

Greater influence is expected in the future, as the iPhone may produce a halo effect similar to that of the iPod, luring more people into buying a Mac. A fresh wave of switchers is expected sometime in 2010, part of the reason Needham is raising its 2010 EPS estimate from $6.40 to $6.70. The 2009 estimate is being bumped from $5.50 to $5.80.

UBS' Maynard Um comments that Q409 should be aided by wider iPhone 3GS distribution, and more sales of the iPhone 3G. Gross margins should higher than Apple's predicted 34 percent, not just because of the iPhone, but a migration of MacBook buyers from the $999 base model to the $1,199 MacBook Pro. The UBS price target for Apple stock has been raised from $141 to $160, while non-GAAP EPS for FY10 is being forecast at $8.58 instead of $7.77.

Similar optimism is expressed by Shaw Wu, who notes that Kaufman is raising its price target from $176 to $184. Total FY09 revenue is now predicted to be $35.6 billion, generating $5.75 in EPS. Tentative FY10 numbers are $41 billion and $6.50. Future aids to Apple performance are expected to include new iPods, new desktops, Mac OS X Snow Leopard, and a potentially a new type of product.

by MacNN Staff