AAPL Stock: 110.37 ( -1.97 )

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Analyst: Expect 'modest' buyback, dividend increases from Apple

updated 06:22 pm EDT, Wed April 2, 2014

Company likely to announce adjusted policies during next earnings call

Tech analyst Gene Munster of Piper Jaffray has told investors in a new memo that he expects "moderate" increases in both Apple's share-buyback program and its dividend to shareholders, likely to be announced during the company's next earnings call, scheduled for April 23. This belief, he noted, is already "priced into" shares of AAPL and is unlikely to take price any higher in and of itself. The current quarterly dividend, raised last year, is $3.05 per common share.

Munster also said he expects Apple's revenue figures to come in on the high end of the company's guidance, which would put it close to $44 billion for the quarter, AppleInsider reports. Over the past year, the company announced and implemented a policy of giving investors its "best guess" on future revenue rather than its previously more-conservative estimates. Since then, Munster noted, actual revenue has tended to come in on the high side of the guidance, which he says will be repeated this quarter.

Thus far, consensus estimates for the iPhone maker tend to agree with his analysis. Wall Street is expecting around $43.5 billion in revenue for the March quarter. He told his investors that now is a good time to invest in the stock, as the company is expected to add and refresh products over the rest of the year, and is likely to again dominate the holiday tech sales arena as it does every year. Munster said many analysts are skeptical that new or revamped products will be able to recapture the huge growth of the iPhone and iPad introductions, but Munster disagrees.

Apple reported $43.6 billion in revenue in Q2 2013, and some analysts believe the company may be able to top that figure, given that it has expanded the market for iPhones through its year-end deals with China Mobile and Japan's DoCoMo last December. Current consensus figures from analysts believe Apple has sold 38 million iPhones, its best-selling product. However, Morgan Stanley's Alphawise -- which has had a mostly strong record of predicting Apple iPhone sales -- believes the total for Q2 will be closer to 42 million iPhones, reports Fortune. If correct, it would be record figure for a March quarter.

Munster told his clients in the memo that he expects only five percent growth in revenues from Apple in the June quarter, bucking a consensus trend of around 10 percent. This is based on his prediction that Apple's primary new announcements this year will come in the second half, while most other analysts are predicting some changes before the end of the June quarter, such as a revamped Apple TV.

by MacNN Staff





  1. iphonerulez

    Dedicated MacNNer

    Joined: 11-28-08

    The only sure thing I expect to happen on earnings is that Apple will miss expectations all around and the share price will be back down around $500. This is a recurring theme with Apple. Apple will simply continue to sit on that reserve cash and do nothing with it to increase revenues. Most companies would be so happy to have that reserve cash to expand their business but not Apple.

    Apple isn't going to be able to boost revenue considerably to move the stock up to $600 with its present methods. It's going to take a healthy acquisition to do that. After seeing Amazon come out with that Fire TV and then I look at AppleTV, I have to shake my head in disgust. Apple has had AppleTV as a hobby for years and it still doesn't support games or PLEX. Even the most recent AppleTV has a dual-core processor with a deliberately disabled core. Un-freaking-believable. Why did Apple cripple the device? Aren't Apple's economies of scale large enough to use one of its older dual-core A-series processors without taking some serious margin hit. Although I use a Roku 3, I'd be more tempted to buy the Amazon Fire TV before considering AppleTV and I'm an Apple shareholder. I simply just don't understand why Apple does the things it does despite sitting on a mountain of (overseas) cash.

  1. jdonahoe

    Junior Member

    Joined: 07-05-06

    I'm an Apple share holder, too and I was not impressed by the Amazon Fire. Who pays $150 to play low level games? I've got Angry Birds on my Roku, but I would rather watch something on Netflix and play games on my iPad. If you want to play games on your TV, you buy a dedicated game system.

    Apple's problem is all these muckety-muck prognosticators who say that if Apple didn't sell X number of product, even if they only miss these "expert" estimates by a couple of thousand, they will clamor to short the stock. Apple can sell boatloads of stuff, but it never seems to be enough for these "experts". If I'm looking to buy stock and there is a company that is making a significant profit AND paying a dividend each quarter, why would I be concerned if they only sell 44.5 million phones in a quarter when the "experts" predicted 45 million? Apple should not be chastised for predictions.

    I'm guessing Microsoft stock is up because very few want or like Windows 8 and if they sell any copies it's a surprise.

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