Shane Cole
A new report from Morgan Stanley suggests that the iPhone 5c's better-than-anticipated margins and popularity will propel Apple past previous analyst expectations.
The report from Morgan Stanley analyst Katy Huberty adjusts Apple's expected earnings per share for the fourth quarter of 2013 upward from $7.51 to $8.00, while holding the line on the stock's 'Overweight' rating and $540.00 price target. Huberty cites higher-than-anticipated margins from the iPhone 5c, which are in turn expected to drive average sale prices for the handset from $565 to $572.
Previous estimates were predicated on the idea that Cupertino would accept tighter gross margins in order to lower the cost of the then-unannounced iPhone 5c in a bid for marketshare in developing nations like Indonesia and Brazil. Apple instead chose to position the iPhone 5c at the upper-mid level of the smartphone market, which Huberty commented on in her post-introduction note to investors on Sept. 11.
"iPhone 5c priced higher than expected," she wrote at the time, "which may limit unit upside but alleviates margin concerns and puts upward pressure on ASPs."
In her latest report, Huberty also estimates that around 3 million of the 9 million iPhones Apple sold over the weekend were iPhone 5s units, with 4 million iPhone 5c units moved. The remainder are believed to represent 1 to 2 weeks of channel inventory for Apple's retail partners.
Huberty is not alone in predicting increased earnings for Apple — several analysts reacted positively to the company's opening weekend iPhones sales announcement, while Apple revised their own guidance upward on Monday.
Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
28 Comments
Note to analyst - Increase your estimate on Apple 20%. We can't have Apple beat our estimates!!!
A little different from flip-flop G Munster.
I can play this guessing game too. Apple will (fail/succeed) because it priced the 5C (too high/just right). I predicted Apple would (sell/ship) (5MM/7MM/9MM) iPhones. I am never wrong. If Apple did (ship/sell) more iPhones, it's because they stuffed the channels.
Seems contradictory to everything else coming out-- looks much more like 7MM 5S and 2MM 5C, and the channel sell-through seems to be exceptionally high. I imagine there could easily be 1MM 5C units stuffed in the channel, but that really seems like a longshot-- Apple would have needed to be disappointed with 5C pre-orders to do a stunt like that, and even then it seems uncharacteristic.
Blah blah blah earnings. Blah blah blah share price. Blah blah concerns. Expectations blah blah. Margins blah blah blah. Recommendations blah blah blah. Blah blah blah inventory. There, I'm about as reliable an Analysts as any of them. (Then tomorrow I flip flop and say exactly the opposite.) Yes lol, I am highly frustrating seeing these dummy Analysts on every web page I like to visit.