“This Wednesday (4/13/05), Apple Computer will announce its operating results for its 2nd fiscal quarter ended March 2005 quarter. In our opinion, seasonality and sustainability will pose challenges for the company. Most consumer electronics firms understand the down cycle of the post-Xmas period, but for Apple, this is a new phenomenon. We are estimating that operating profits will pummel down to $240 for the quarter, a 40% sequential drop. On the bright side, though, Apple should still show significant progress compared with posting only $62 million a year ago,” Eugene Walton, independent researcher, writes for YEALD.
“But will Apple be able to stay well above $200 million in operating profits for the next few quarters until Xmas season rolls around again? …We doubt that Apple will be able to post another $400 million in operating profits during the next Xmas quarter unless the company can figure out how to keep going its product momentum in Macintoshes. This year, we will find out whether there really is a ‘halo effect.’ If not, we look for the company to adopt the new trend for technology companies – stock buybacks and/or start paying dividends. We note that Apple has close to $6.5 billion of net cash which is approaching $8 per share,” Walton writes.
Full article here.
MacDailyNews Take: Apple’s been doing this for twenty-plus years, we think the company understands the down cycle of the post-Xmas period very well. So, knock it below $40 a share, boys, and let the buying begin!
Related MacDailyNews articles:
Caris & Co analyst downgrades Apple, says ‘current enthusiasm might have overrun the realities’ – April 11, 2005
JP Morgan raises estimates for Apple Computer, Inc. – April 11, 2005
Analyst expects Apple to boost guidance on strong iPod sales; shares up in pre-market trading – April 11, 2005
First Albany raises estimates for Apple Computer – April 07, 2005
Goldman Sachs raises estimates for Apple Computer – April 06, 2005