Sterne Agee Expects Light Revenue, But EPS Beat for Apple

“We believe that iPhone upside in the June and September quarters is less likely due to lower supplier build plans,” the analyst wrote in a research note obtained by The Mac Observer. “While we are pleased to see consensus estimates being cut over the last few weeks as analysts aim to be more responsible, we believe they may still be too high at 29 million units, compared to what our checks indicate will more likely be in the 26-28 million range (we are at 27 million).”

Mr. Wu stipulated that any weakness in iPhone sales are related to an expected refresh of the product sometime this fall, and he said that he believes the next generation refresh, “will likely be the most powerful mobile phone upgrade cycle ever.”

The analyst is at the high end of consensus estimates for iPad sales at 15 million units, based in part on improved availability of the Retina Displays that are used on the device. He is modelling 4.3 million units for Mac sales, which is also at the high end of Wall Street consensus numbers,based in part on new MacBook Air and MacBook pro models introduced early in June.

Looking ahead, Mr. Wu stressed that he expects Apple to offer “vintage conservative guidance due to supplier checks indicating lower build plans” for the September quarter, Apple’s 4th fiscal quarter. Mr. Wu is modelling $37.2 billion in revenue for the September quarter and earnings per share (EPS) of $10.49. Current consensus is $38 billion in revenue and EPS of $10.22.

For the June quarter, Sterne Agee is modelling $36.1 billion (unchanged) in revenue and EPS of $10.45 in EPS (up from EPS of $10.16). Consensus for the quarter is revenue of $37.2 billion and EPS of $10.35. Apple offered guidance of $34 billion in revenue and $8.68 in EPS.

Apple will report its June quarter earnings on Tuesday, July 24th, after the markets close. The Mac Observer will be offering live coverage of the conference call itself and full coverage of the company’s announcements.

As of this writing, shares in AAPL are trading at $601.096, down $3.204 (-0.53 percent), on moderate volume.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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