Katie MarsalAmerican Technology Research trimmed its estimates for Mac maker Apple Inc. on Friday, saying that while the company's near term prospects look fine, future quarters may be met by muted demand, particularly for higher-end products like the MacBook Air.
Based on those findings, Wu said he's decided to once again "err on the conservative side," as he believes tough macroeconomic conditions will lead system builders and distributors to keep their inventory levels low.
"In addition, our supply chain checks indicate a mix shift towards low-end and mid-range Macs as it appears that more affluent consumers may be feeling the effects of a tighter credit environment," he wrote. "MacBook Air sales and build plans appear more modest after more robust levels."
For fiscal 2008, the analyst now estimates Apple to earn $5.29 per share on sales of $32.8 billion, compared to his previous estimate of $5.34 on $32.9 billion. His model for fiscal 2009 now has the company earning $6.15 per share on revenue of $38.8 billion, down from $6.35 on $39.2 billion.
Those estimates factor in changes to his model for the next two quarters: For the current September quarter, Wu expects per share earnings of $1.19 on sales of $8.2 billion, down from $1.24 on $8.3 billion. Revisions to his model for the December holiday quarter have the company earning $1.90 per share on sales of $11.4 billion, down from $1.96 on $11.5 billion.
"We are leaving our Mac assumptions intact at 2.8 million for the September quarter, but lowering our average selling price [estimate] (4 percent quarterly decline vs. our previous view of 2 percent decline) and gross margin assumptions (32.5 percent vs. previous view of 33 percent)," he wrote.
That said, Wu still recommends that investors buy shares of the Cupertino-based electronics maker. He's, however, reduced his 12-month cieling on the company's share price to $205 from $220, which represents 31.5 multiple of his calendar year 2009 earnings estimate of $6.52 per share.
Shares of Apple were trading down $4.25, or 2.78 percent, to 148.40 in afternoon trading on the Nasdaq stock market.
-m.jpg)
Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
109 Comments
Da Air is da dud.
Da Air is da dud.
I think that's a bit hard to tell at this point. It may be that everyone who wanted to buy an Air bought one and now things are slipping, or it was doing very well and now things have just returned to a normal pace.
It could be that the market for laptops that are thin but with a larger footprint is not that large. The rest of the market may want a smaller laptop in one or two other dimensions.
If it's doing well Apple may refresh it but leave it be, if not Apple will either kill it off or make a smaller laptop. He's hoping for the last option.
The Air can use an update to Montevina, but I can't find any machines currently using the 22mm^2 packages. Anyone one know of any or if these aren't shipping yet?
I think that's a bit hard to tell at this point. It may be that everyone who wanted to buy an Air bought one and now things are slipping, or it was doing very well and now things have just returned to a normal pace.
It could be that the market for laptops that are thin but with a larger footprint is not that large. The rest of the market may want a smaller laptop in one or two other dimensions.
If it's doing well Apple may refresh it but leave it be, if not Apple will either kill it off or make a smaller laptop. He's hoping for the last option.
Me too- smaller and add some ports while your at it.
I would also add that the the Air is usually bought as a secondary computer and that a bad economy is killing anything non-essential.
More nuggets of wisdom from Wu... funny, those nuggets taste like chicken.