In a research note obtained by The Mac Observer, Mr. Wu told clients that Apple had reduced some of the production constraints on iPad shipments, and that the company’s manufacturers had successfully retooled and converted more production lines to making the iPad 2. The analyst’s sources said that Apple was still well shy of the goal of being able to produce 3-4 million units per month, but he bumped estimates for the June quarter from 5.9 million iPads to 6.8 million.
He also believes that demand for the iPhone 4, “appears to be holding up better than we expected.” The device is a little more than 10 months old, but he said the addition of the white iPhone 4, the addition of Verizon as a second U.S. carrier, and growth in international markets have all contributed to sales of the device. He added 1 million iPhones to the current quarter for a new estimate of 17 million iPhones.
For Apple’s Mac product line, Mr. Wu told clients that “channel feedback” on Apple’s new Sandy Bridge iMacs (released on May 3rd) is strong. Apple’s desktop line hadn’t been performing as well as the company’s mobile Macs, but he believes that the new iMacs could lead to a rebound in desktop sales. His bumped estimates from 3.83 million units to 3.9 million.
For the number watchers, Mr. Wu raised his estimates for Apple’s gross margins from 38.3% to 39%, primarily due to higher iPad yields and higher iPhone sales. Apple is currently guiding for 38% gross margins.
On the dollar side of the equation, he is now estimating $24.7 billion in revenue for Apple, an increase of $1.3 billion, and earnings per share (EPS) of $5.75, up from $5.38. For fiscal 2011, he is now modelling for $103.6 billion with EPS of $25. Fiscal 2012 estimates were raised, as well, with new estimates of $15.4 billion and EPS of $29.
Accordingly, he raised his 12-month price target to $460 and reiterated his “Buy Rating.”
“We continue to believe that AAPL is positioned to outperform in this tough macroeconomic environment with its defensible strategic and structural advantages and its vertical integration,” the analyst wrote.
The analyst’s positive comments weren’t enough to push Apple’s stock price up, however; 30 minutes before the close of the regular trading session, AAPL was trading at $336.465, down $4.065 (-1.19%), on light volume of 9.8 million shares trading hands.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.