Despite Apple CEO Steve Jobs' medical leave, analysts are bullish on Apple's Q1 financial results. Piper Jaffray's Gene Munster sees iPhone and iPad as keys to a great quarter.
Strong December sales for the iPad and iPhone
could push Apple's earnings above Wall Street's current expectations of $5.40
earnings per share on sales of $24.43 billion, according to research firm Piper
"iPhone and iPad remain somewhat of a wildcard,
albeit positive, and we believe solid holiday demand could drive upside to
Street numbers," Piper Jaffray analyst Gene Munster wrote in a research
note Jan. 18, ahead of Apple's first quarter earnings report.
Munster said Wall Street expects Apple to tally 6.2
million iPads sold for the quarter, up 2 million from last quarter. He noted that his store checks showed the iPad outselling
the Mac anywhere from 4 to 1 to 10 to 1.
Wall Street also anticipates Apple to report 15.5 million
iPhones sold, or nearly double (91 percent) Apple sold for the same quarter
"We believe this 91 percent growth is achievable in
the December quarter, as the Street was factoring in U.S. consumers delaying iPhone
purchases in anticipation of a Verizon launch," Munster said. "In
other words, while the iPhone represents a wildcard in the quarter, we believe
15.5 million units is achievable."
Apple reports earnings tonight after the bell. Expectations
that the company could post its strongest quarter in the company's history are
somewhat tempered by Apple CEO Steve Jobs' medical leave of absence
Jobs will continue to act as CEO, though Apple COO Tim
Cook will be responsible for the company's day-to-day operations. The
news sent Apple shares plummeting 8 percent in afternoon trading from
the Jan. 14
"This leads us to believe Jobs expects the leave to
be shorter and/or less serious than his previous leave," Munster opined in
his note. "Secondly, Jobs did not issue an expected return date as he did
in 2009, which adds an element of uncertainty."
What is certain is that most financial analysts, such as
Gleacher & Co.'s Brian Marshall, don't believe Apple will miss a beat with
Jobs taking some down time.
"Running a $100 billion annual revenue company while
being forced to take periodic medical leaves is not fair to anyone (e.g., most
of all to Jobs, AAPL investors or its employees/board)," Marshall wrote in
a Jan. 18 note.
"Cook has performed flawlessly in the past as AAPL's
interim CEO and we expect he will become the full-time CEO of Apple this year
with Jobs hopefully serving as a senior adviser... Apple remains the best technology company on the
planet with numerous catalysts on the horizon."
Analysts also remain bullish about Apple's March quarter,
which will include some numbers about the company's
of the iPhone 4 on Verizon Wireless' network.
That launch, which captured media attention all of last week, is slated for Feb. 10. Analysts
the iPhone 4 launch on Verizon could add 9 million to 15 million iPhone
sales this year.