Shaw Wu: You’re All Wrong About Apple

For the December-ending quarter, Apple was likely to report revenue as predicted and beat earnings per share forecasts because of the upside received from iPhone sales, though the company’s guidance for the March quarter will be the “trickiest” he can remember, the analyst added.

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“We continue to believe iPhone shipments and gross margin will likely surprise to the upside,” he wrote. “We remain comfortable with our forecast looking for 47.5 million units vs. consensus at 46-47 million. Our supply chain checks indicate much-improved yields and ramped iPhone 5 capacity as the quarter has progressed. For this reason, we are modeling gross margin of 38.7 percent vs. expectations of 38.3 percent and guidance of 36 percent.”

Sterne Agee has a price target of $840 on Apple’s stock, with a Buy recommendation.

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