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Monday, October 09, 2006, 08:35 am PT (11:35 am ET)

Apple seen delivering "strong" September quarter

Apple Computer, which reports its September quarter results next Wednesday, is likely to report results at the upper end, if not exceed its guidance of $4.5 to $4.6 billion in revenue and 46 cents to 48 cents earnings-per-share, according to one Wall Street analyst.

"We are modeling continued strength in its Mac business (up 6 percent Q/Q to 1.4 million units) driven by MacBook and a rebound in its iPod business (up 5 percent Q/Q to 8.5 million units) helped by new nanos and initial shipments of its new shuffle," American Technology Research analyst Shaw Wu wrote in a note to investors on Monday.

Wu believes Apple will once again guide analysts conservatively for its December quarter, setting reasonable expectations that it can meet or exceed.

"For revenue, we believe Apple will likely guide to $5.7 - 6.1 billion (we are at the upper-end at $6.0 billion), up 25-31 percent Q/Q, fueled by continued Mac strength and a continued strong rebound in its iPod business," he wrote. "As usual, we find consensus out-quarter revenue estimates unreasonably aggressive — this time at $6.5 billion."

While Apple has made material progress in its options investigation, Wu noted that its yet-to-be disclosed non-cash charges still need to be signed off by its auditor, KPMG. "Given the recent timing, we believe there is a fair likelihood that Apple will disclose limited financials," he explained. "Should Apple give out full financials, we believe this would be viewed a positive."

In his note to investors, the analyst also predicted that there may be a "soft reset" in Apple's share price during the December quarter. However, he maintains a "Buy" rating on shares of the company and reiterates that investors should take advantage of any such weakness and "aggressively buy" Apple shares in the high $60 range.