iPhone maker Apple Inc. (AAPL) is slated to release fourth-quarter results after the market closes on Monday. On average, 36 analysts polled by Thomson Reuters expect the iPhone maker to earn $1.42 per share for the quarter, while revenues are estimated to be $9.20 billion. For the full-year, analysts expect earnings of $5.88 per share on revenues of $35.87 billion. Analysts' estimates typically exclude special items.
The Cupertino, California-based computing and electronics company said in July that earnings per share for the fourth quarter are estimated in the range of $1.18 to $1.23 and revenue in the range of $8.7 billion to $8.9 billion.
For the previous quarter, the maker of iPod reported a 15% increase in profit, helped mainly by strong sales of iPhones. Third-quarter net income was $1.23 billion or $1.35 per share, compared to $1.07 billion or $1.19 per share for the year-ago quarter. Net sales rose 12% to $8.34 billion from $7.46 billion in the same quarter last year
Last month, Apple introduced the new iPod nano, which includes a video camera, mic and speaker. The company also introduced the new iPod touch lineup starting at $199, down from its previous price of $299. Apple has also brought down the starting price of its iPod shuffle to $59 from $79. The announcement also saw the company's high profile CEO Steve Jobs hale and hearty as he made his appearance after the liver transplant.
Apple's future is so much tied to Steve Jobs' health that any speculation about his health has sent jitters among investors. Considered the 'idea man' behind Apple's innovative products, Jobs was recently found to be the most admired person in a survey conducted among 1,000 American kids aged 12 to 17. The list included stalwarts like Oprah Winfrey, Tony Hawk, Mark Zuckerberg, Kimora Lee Simmons, Mary-Kate and Ashley Olsen.
JMP Securities last month upgraded Apple's shares to "Market Outperform" from "Market Perform" with a price target of $200. Analyst Samuel Wilson raised the 2009 GAAP earnings per share estimate to $5.82 on revenue of $35.767 billion from $5.70 on revenue of $35.567 billion. The 2010 estimate was lifted to $6.86 on revenue of $42.150 billion from $5.91 on revenue of $39.300 billion.
The analyst raised his estimates based on the new iPods, in particular the new Nano, which he thinks would be a hit, and continued momentum of the iPhone. Additionally, with Steve Jobs back on the job, the analyst believes that 2010 would be a year marked with several major new product announcements including a tablet or netbook device.
Last week, Credit Suisse maintained its ''Outperform'' rating on Apple's stock and and raised its 12-month target price to $235 from $200. The brokerage believes Apple's gross margins will come in better than it previously anticipated due to a continued mix shift towards the iPhone business and the lack of an incremental Sept quarter price cut on consumer notebooks. Accordingly, the firm said, ''we are now modeling gross margins of 36.2% versus 35.9%, previously. We lowered our above-consensus iPhone unit estimates to 7.1 million (from 7.55 million) and slightly increased our Mac units to 2.79 million (from 2.74 million) for the Sept quarter. Our iPod forecast is unchanged at 10.3 million units.''
Overall, the brokerage's September quarter estimates now call for revenues of $8.88 billion and earnings per share of $1.42, compared to $8.86 billion and $1.38 previously.
Credit Suisse said its non-GAAP earnings per share estimate for FY2010 stands at $9.20, up from $8.55, due to its increasingly optimistic outlook for 2010 iPhone demand and gross margins.
Among other events during the quarter, the Financial Times reported in late July that Apple is working with four record labels to increase digital sales of albums. Apple was said to be working with EMI, Sony Music, Warner Music and Vivendi's Universal Music Group on the project called Cocktail.
Apple is also reportedly planning to offer a tablet-sized computer in time for Christmas shopping. The computer can be connected to the Internet like Apple's iPod Touch and its screen may be up to 10 inches diagonally. Book publishers have reportedly been in discussions with Apple about offering their services on the new device, which could compete with Amazon's (AMZN) Kindle.
Apple said in August that Eric Schmidt, the chief executive officer of internet search giant Google Inc. (GOOG), is resigning from Apple's Board of Directors, as the two companies are increasingly into overlapping business territories. Schmidt has been on Apple's board since August 2006.
Both Google and Apple produce web browsers and smartphone software, although many are of the view that Google's products are aimed at fighting off competition from Microsoft Inc. (MSFT) rather than to get a share of Apple's business. Both companies have photo editing software, and while Apple runs iTunes, Google has YouTube service, although not overlapping in all respects.
Recently, Apple reportedly rejected a request from Google to use its voice application on iPhone, prompting the U.S. Federal Communications Commission to begin an inquiry into the issue.
AAPL closed Friday's regular trade at $188.05, down $2.51 or 1.32%, on 15.41 million shares. For the past year, the stock traded in the range of $78.20-$192.32.
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