Thursday, March 20, 2008, 01:00 pm PT (04:00 pm ET)
AmTech ups Apple estimates; Reitzes out at UBS in at LehmanAmerican Technology Research on Monday increased its estimates for Apple's soon-to-end second fiscal quarter of 2008 on better than expected Mac growth. Meanwhile, an analyst long covering Apple for UBS has been lured away by Lehman Brothers, where he'll be tasked with a similar role.
AmTech ups Apple estimates
In a research note to AmTech clients on Thursday, analyst Shaw Wu said that Apple's Mac business has thus far shown signs that it may be recession proof. In particular, sales of the new MacBook Air sub-notebook are said to have seen a resurgence after tapering off for a few weeks following initial pre-orders.
"We believe MacBook Air could represent 20 percent and as high as 25 percent of Apple's portables business," Wu wrote. "We believe there may some cannibalization with MacBook Pro and MacBook, but overall, it looks like MacBook Air has been able to expand Apple's Mac opportunity.
Although Wu had been modeling Mac unit growth to rise 38 percent year-over-year for the company's second fiscal quarter ending March, he said his latest round of checks suggest growth could come in closer to 42 percent.
iPods, however, appear to be tracking relatively flat or down in terms of yearly growth, with the analyst estimating that Apple will wind up hitting the upper-end the 9.5-10 million unit range.
"It appears that the iPod shuffle price cut is having a positive impact on units," he noted.
Meanwhile, Wu's checks within the supply chain suggest that key components such as NAND flash memory, DRAM and hard disk drives are all pricing favorably compared to last quarter, which should help drive Apple's gross margin closer to 33.5 percent, considerably above management's guidance of 32 percent.
As a result, the AmTech analyst raised his estimates for the March quarter to $1.10 in per share earnings on revenues of $7 billion, up from $1.02 on $6.9 billion, driven by sales of 2.15 million Macs, 10 million iPods, and 1.5 million iPhones.
"While near-term trends look difficult with a looming recession and a slow-down in consumer spending, we continue to believe Apple is well-positioned to weather the storm better than most with its strong fundamentals," he wrote.
Reitzes joins Lehman
In related news, Lehman Brothers said Thursday that Ben Reitzes has joined its U.S. Equity Research Department to cover the IT Hardware sector and serve as Co-Sector Head of U.S. Technology, where he'll preside over coverage of Apple.
Reitzes' arrival at the firm comes after thirteen years at UBS and PaineWebber, most recently as the senior analyst covering the IT Hardware and Imaging Technology sectors as well as the Global Coordinator of the PC sector for UBS.
Amongst his highlights while covering Apple for UBS were early but ultimately accurate predictions that the company was developing an ultra-portable notebook employing flash memory, and that the iPhone was just the start of a mega multi-touch platform aimed at spawning a vast array of new devices.
At Lehman, Reitzes will have primary oversight of the IT Hardware, Software and Imaging Technology sectors with joint oversight of the Electronics Manufacturing Systems sector.
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