Does Apple’s Good News Come With the Bad?

ipadIn a mixed bag of predictions, Barclays Capital analyst Ben Reitzes has raised his sales estimates for Apple’s (NASDAQ:AAPL) just-ended first fiscal quarter, but cut his full-year assessment because of several negative factors, Barron’s said. Reitzes’ estimates for the December quarter are now $54 billion in revenue and $13.38 in earnings per share, up from previous predictions of $52.4 billion in revenue and EPS of $13. He is modeling the company to have sold 47 million iPhones last quarter, up from a prior estimate of 43.5 million.

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However, the analyst’s full-year expectations are down on worries of a lowered average selling price for the iPhone, and iPad sales being cannibalized by the lower-priced iPad mini: both factors that would reduce aggregate revenue and margins. The iPhone sales estimate for the year is up at 165.6 million units from a prior 158.4 million, while the iPad prediction is down to 88.9 million from 96.3 million. The full-year estimate is down to $194.8 billion in revenue and $49 per share in profit from $196.1 billion and $50.92 per share, respectively. For fiscal 2014, the guesses are down to revenue of $221.4 billion and profits of $57.45 per share from $230.9 billion and $60.66, respectively.

He also cut his March quarter iPhone sales estimate to 40 million from 43.5 million, citing supply chain checks.

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“Our research still points to March quarter iPhone unit sales growing over 15 percent year-on-year, but we believe many investors now believe that sales will be flattish given component ordering trends out of Asia,” Reitzes wrote in a note to investors. “We believe that iPhone sales can still grow at a 20 percent pace for a few years if the company can expand its line-up successfully.”

The analyst also cut his price target on Apple’s stock to $740 from $800, but reiterated an Overweight rating on the shares.

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