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Tuesday, March 15, 2005, 10:00 am PT (01:00 pm ET)

Quarterly Apple shipments outpacing industry estimates

Following a recent trip to Taiwan and after completing checks with key component suppliers, brokerage firm Credit Suisse First Boston raised its estimates on Apple for the current quarter and next two fiscal years.

In a research note released to clients on Tuesday and obtained by AppleInsider, the firm said it is raising its estimates on iPod shuffle shipments for the current quarter to 1.5 million units, up from 500,000 units.

"In addition to robust adoption of its flash-based shuffle, we believe Apple will ship 4.2 million HDD iPods as the company has secured capacity to meet growing international demand," a trio of analysts wrote in the report. The firm believes the release of the 6GB iPod mini will enable the iPod to retain its dominant market position given its "euphoric status."

CSFB also raised its expectations for the Mac mini by 50,000 units, estimating that Apple will ship 150,000 of the headless Macs during the quarter. "We believe both iPod and Mac demand are tracking above normal seasonal C1Q patterns," the analysts said. The firm expects total Mac units shipments for the quarter to increase 35% year-over-year, above its PC industry growth estimate of 10%.

CSFB raised its fiscal year '05 (FY05) revenue and earnings-per-share estimates to $13.4 billion and $1.15, up from $12.8 billion and $1.03. The firm are also raised its FY06 estimates to $15.6 billion and $1.35 from $15.2 billion and $1.21. For the current quarter, the firm expects Apple to earn 25 cents a share on revenues of $3.2 billion.

In light of positive data uncovered during the quarter, CSFB said it believes Apple is attracting new users at an "increasing rate" while successfully navigating the low-end of the PC and music markets. "However, we believe the stock’s valuation, at 31 times FY05 NOPAT, adequately reflects our expectation that it gains share in PCs and maintains its dominance of the digital music market," CSFB analysts wrote in the report.

For these reasons, the firm maintained its $40 price target on Apple, which represents 31 times its FY05 net operating profit after tax estimate of $1.06.