RBC's Abramsky, AmTech's Wu lead Apple analysts for Q2

RBC Capital Market's Mike Abramsky and American Technology Research's Shaw Wu emerged atop the list of Apple analysts in providing the most accurate estimates for Apple's second fiscal quarter of 2008, and both are out Thursday with new research notes on the company.

Apple said Wednesday that earnings rose over 36 percent to $1.16 per share on revenues of $7.51 billion and a gross margin of 32.9 percent for the three-month period ending March 29th, driven by sales of 2.29 million Macs, 10.64 million iPods, and 1.7 million iPhones.

Of the eight analysts for which AppleInsider had data leading into the earnings report, Abramsky's model stood out as the most well-rounded in light of the company's actual results. He had predicted earnings of $1.11 per share on revenues of $7.2 billion and a gross margin of 34 percent, which factored in sales of 2.2 million Macs, 1.8 million iPhones, and 10 million iPods.

Wu was a close second, and along with Lehman's Ben Reitzes came the closest to predicting the company's actual gross margin — an indicator of a company's profitability at the most fundamental level — with his estimate of 33.5 percent. The remainder of his forecast included per-share earnings of $1.10 on $7 billion in revenues, based on estimated sales of 2.15 million Macs, 1.5 million iPhones, and 10 million iPods.

In a research note release to clients Thursday, Abramsky reiterated his Buy rating on shares of Apple, bumping his price target by $10 to $200 a share. He called on investors to realize that the advent of a 3G iPhone in the near term will enable the Cupertino-based company to tap a global market five times the size of the MP3 player market and ten times the size of the worldwide PC market.

According to the analyst, other pending catalysts for the stock include higher capacity iPod touch players and refreshed MacBooks with aluminum enclosures later in the calendar year, as well as a boost in international Mac sals as consumers in foreign countries see increased exposure to the company's well-received iPhone handset.

"Apple may phase out the 80GB Classic following the launch of a 64GB iPod touch," he said, adding that greater availability of video content on the iTunes Store/Apple TV also creates a need for current generation iPods that are video capable, and thus may drive a replacement cycle for a significant number of consumers.

In his own report Thursday, Wu noted that some investors may be concerned that Apple's revenue upside did not translate into big per-share earnings upside, and cited gross margin as the culprit.

"One may beg the question of whether Apple has lost its unparalleled ability to capitalize on declining component prices," he wrote. "We believe it is too early to declare this, but we believe this could remain a lingering concern."

As such, Wu maintained his Neutral rating and positive longer-term fundamental view on the company, but continued to wave caution at buying into shares at current levels.

"We remain concerned with volatility in shares and a potential vacuum before the launch of 3G iPhones and new Macs," he said.