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Monday, September 17, 2007, 06:50 am PT (09:50 am ET)

Fourth quarter Apple estimates raised at AmTech

Despite a number of concerns on the part of investors, analysts for American Technology Research say Apple Inc. is again poised to post bold numbers for its forth fiscal quarter ending later this month.

In a research note released to clients Monday, analyst Shaw Wu cited sources who say the company is experiencing "broad strength" across all of its business segments as consumers continue to buy up into higher-priced Mac and iPod offerings.

"As a result, we are raising our forecast to $5.96 billion in revenue and $0.83 in earnings-per-share (from $5.8 billion and $0.73) versus guidance of $5.7 billion and $0.65 and consensus of $5.94 billion and $0.81," he wrote. "We are modeling a gross margin of 32.5 percent (from 30.8 percent) versus guidance of 29.5 percent."

While Wu had anticipated strength from the new "fat boy" nanos during the quarter, he said he was surprised to learn that the higher-priced iPod classics and iPod touches are also selling quite well. Similarly, he said, overall demand for Apple's Mac line is stronger than anticipated with an unexpected mix shift towards high-priced models.

Given his checks, the analyst raised his iPod units sales estimate for the quarter ending September 29th to 11 million units from 10.4 million units, and his Mac unit forecast to 2 million units from 1.95 million units.

"Contrary to fears with potential cannibalization from new iPods and backlash from an iPhone price cut, iPhone sales have regained momentum," he added. "For the September quarter, we are now forecasting 900,000 units (from 770,000 and guidance of 730,000)."

Wu also tweaked his fiscal 2008 forecast, which he notes is now ahead of consensus estimates. The analyst is now modeling Apple to generate $30 billion in sales and per-share earnings of $4.55 (from $29.5 billion and $4.25) versus consensus of $29.5 billion and $4.41.

"While we are concerned with potential softness in US consumer spending, it appears that Apple is once again positioned to buck the trend with its compelling product line and strong international exposure (52 percent of revenue)," he wrote. "We recommend buying Apple on pull-backs and see upside to [our $185 target] in 6-12 months."