“Apple’s (AAPL) glistening quarter had Wall Street polishing its earnings models Thursday. Shares were upgraded to buy at both Prudential and Bank of America after Apple wiped out first-quarter earnings estimates Wednesday and guided current-period profit sharply higher. Earnings forecasts and price targets were raised at Merrill, CSFB and Piper Jaffray,” Troy Wolverton reports for TheStreet.com.
“Several firms noted the possibility that Apple’s exploding iPod sales will translate into market-share gains in its personal computer business. Bank of America, which raised its price target to $85 from $75, estimated that if Apple’s PC unit could capture 3.5% of the iPod’s 2006 installed base, the segment’s sales could jump 16%. The firm raised its 2005 earnings estimate to $1.87 from $1.64,” Wolverton reports. “The stock was recently up $7.30, or 11.2%, to $72.76.”
“Apple also saw a surge in computer sales in the quarter. Total sales of the company’s Macintosh line increased to 1.05 million units, from 829,000 in the year-ago period. Revenue from those sales jumped to $1.61 billion in the holiday period, up 30% from the company’s fourth quarter and 26% from its year-earlier quarter,” Wolverton reports. “Apple’s strategy has been to use the iPod to draw new customers — particularly users of PCs based on Microsoft’s Windows operating system — to its Macintosh computers. As part of that strategy, the company on Tuesday introduced a new cut-priced Macintosh — dubbed the Mac Mini — targeted at potential ‘switchers.'”
Full article here.