Prince McLeanShares of Mac maker Apple Inc. rose over 3 percent in morning trading on the Nasdaq stock market following a report from Prudential, which offered a rosy outlook on the company's March fiscal quarter.
The analyst, who just returned from a meeting with members of Apple's leadership, said he's seeing "a big drop" in sales of the company's video iPod and iPod post holidays, but that those weaker sales have been partially offset by stronger sales of the new color iPod shuffles.
Tortora's bullish outlook for Apple was similarly fortified by flowing Mac sales, which are reportedly tracking ahead of company expectations despite the recent introduction of rival Microsoft's Windows Vista operating system.
"We believe Macs would even be stronger in the quarter, but sales of Mac Pro and MacBook Pro are weaker due to a pause ahead of Adobe’s Creative Suite 3 release, expected in the June quarter," he wrote.
For the three-month period ending March, Tortora reduced his iPod estimate to 9.9 million units from 10.4 million, but bumped his Mac estimate to 1.6 million units from 1.45 million.
"Fundamentals at Apple appear sound," the analyst wrote. "We believe that margins will continue to benefit from a favorable component cost environment; Mac share gains will continue; and that the iPod weakness is explained by normal consumer seasonality."
Although Tortora maintained his his 'Neutral Weight' rating on the company, he increased his March quarter per-share earnings estimates by $0.04 to $0.68, or about $0.07 ahead of Street consensus to reflect stronger Mac sales and higher gross margins. Apple has been guiding earnings for the quarter of about $0.54 to $0.56 per share.
Shares of the Cupertino-based company were trading up $2.80, or 3.26 percent, just before noon eastern time.
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14 Comments
They are probably going to go up for a while. Provided they get Leopard out soon! That's the hitch/risk.
I think Adobe CS3 is more critical... and that's going to be earlier than analysts think!
BUY! BUY! BUY!
Heh, heh... just keep it heading north, Apple, and we'll all be fine...
The analyst, who just returned from a meeting with members of Apple's leadership, said he's seeing "a big drop" in sales of the company's video iPod and iPod post holidays, but that those weaker sales have been partially offset by stronger sales of the new color iPod shuffles.
That's nothing to worry about because the sales are very seasonal. It's been a couple years since they had continuous increases in iPod sales. Last year, post-holiday was something 40% lower than the holiday, but it was still a lot better than the same quarter, year before. So long as the year-over-year numbers are still improving, the seasonal fluctuations won't be a problem.
I think Adobe CS3 is more critical... and that's going to be earlier than analysts think!
BUY! BUY! BUY!
Yeah, I have a hard time believing that PhotoShop World in Boston April 4-6 is going to be happening without a CS3 version to hype. And the beta is not enough for that show. I expect CS3, sans the video editing apps (Adobe said those would come out this summer), to be announced before or at the show with shipping about the same time.
That's my trigger.
CS3 = Mac Pro for me!