Apple's 2012 profits forecast to be highest of any public company ever

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This year, Apple could generate the highest annual net income of any publicly traded company in history, according to one Wall Street analyst.

Brian White with Topeka Capital Markets said in a note to investors Monday that he has heard analysts and market pundits over the last several weeks discuss the point of a $500 billion market cap as a barrier to further price upside at companies in the past. Some on Wall Street have theorized the $500 billion market cap threshold is a "barrier" for stocks.

These people are concerned that a similar scenario could happen with Apple, preventing the company from pushing much further past the $500 billion mark. As of Monday morning, Apple's market cap was at about $545 billion.

The line of thinking among some on Wall Street is that companies that exceed $500 billion in market capitalization have trouble growing much beyond that point. But White believes Apple's market cap potential in trillions of dollars, not billions.

"We went back and analyzed five U.S.-based companies that at one time enjoyed market capitalizations of (about) $500 billion or more, but found little similarities with Apple," he wrote.

Those five companies were Cisco Systems, Exxon-Mobile, General Electric, Intel, and Microsoft. With the exception of Exxon, these companies had rich price-to-earnings ratios when they crossed the $500 billion mark, and the tech companies had what White called "monopoly-like market share positions."

But Apple does not have a stranglehold on most markets where it competes. Instead, there is plenty of room for growth in the booming smartphone market.

"Microsoft held over 90% market share for PC operating systems at the peak cap, while Cisco had over 70% share in the networking market and Intel had over 80% of the PC processor market," White said. "By comparison, IDC estimates that Apple held just 4.7% of the PC market in (the first quarter of 2012) and 8.8% share in the mobile phone market."

Apple's iPad does dominate in the tablet market, with an estimated 68 percent share of shipments in the first quarter of 2012, but White noted that it's a market category that Apple invented.

White expects that in calendar year 2012, Apple is poised to generate the highest profits of any publicly traded company ever. Compared to the "big three" technology companies that have exceeded a $500 billion market cap, he believes Apple's net income will over over six times higher on an individual basis to when those companies were at their respective peaks.

In addition to its relatively low market share, Apple stock is currently trading at just 8.4 times White's estimates for calendar year 2013 earnings per share, excluding cash. In comparison, the three technology companies that have crossed the $500 billion threshold — Microsoft, Intel and Cisco — had price-to-earnings ratios of over 80 times.