Firms complain about sudden rules switchover

Several analysts have issued new memos in the wake of Apple's Q1 financial results. Kaufman Bros.' Shaw Wu notes that the results were the "strongest in the company's history," helped mainly by greater-than-expected Mac sales, and a shift towards higher average selling prices for Macs, iPods and iPhones quarter-over-quarter. The 8.7 million in iPhone shipments is described as being "light," but Apple has claimed in a conference call that it could have shipped more if it had not wanted to keep inventory tight.

Like some other analysts Wu complains about Apple's sudden switch to new accounting rules, which while possibly more accurate have confused estimates and predictions. Based on the new formula Wu is raising his FY 2010 forecast to $53 billion in revenue, and $11.15 in EPS. Previous numbers called for $44 billion and $7.40.

UBS analyst Maynard Um is mostly echoing Wu's view, and has altered his FY10 estimates from $52.3 billion in revenue and $11.68 in EPS to $52.1 billion and $11.82. For FY11 Um is now calling for $56.6 billion and $12.88, up from $55.2 billion and $12.03. Looking to the short term the analyst suggests that a March quarter prediction of $11.5 billion and $2.51 is probably too conservative, given Mac sales and an upcoming tablet.

Charlie Wolf of Needham & Co. points out that while Apple is switching away from subscription accounting for products like the iPhone, the company has yet to restate results going back to 2007 under the new rules, as planned. Wolf's non-GAAP EPS estimates for FY10 and FY11 are therefore tentatively set at $12.85 and $15.25, with no comparison available until Apple provides more data. A current $235 price target may be changed in the future as result of Mac and iPhone sales.

by MacNN Staff