Analyst doubts that Apple can achieve another blow-out Xmas quarter

“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


  1. They’re saying that profits will “pummel” down?!?

    Pummel down??

    What the . . . ?

    Come on, people. Just another analyst toking some pretty powerful ganja and writing a Monday morning column. Yeh-heh-hessss. Kind of reminds me of de good old days when McMahon would come in for the Tonight Show taping 3 sheets to the wind. Of course, Johnny would just smack him around a little, like he used to do to his wives, and Ed would be all chipper in a jiffy!!

    No, but seriously, no one has faith in Apple anymore. I swear, sometimes I feel like Catholic priests get more respect than Apple does from these analysts! Hey, I keed. It’s only a joke!!

    Okay, not really.

  2. Apple need to release some new high end boxes (and which work and have no bugs like the current iMac’s disk subsyste).

    It’s been far too long to wait this time around.

  3. Apple have 6 major hardware segments: Pro Mac, iMacs, Pro Books, iBooks, Cheap Macs and iPods.

    Only the Pro Mac area is not meeting expectations and that is all down to IBM and their chip problems.

    Most ANALysts don’t understand Apples market and how it has changed in the last few years.

    It’s very easy to beat up on Apple to create a sensation. Come Weds though, everyone will change their tune for a few months because the numbers will be good.

    Last quarter was the first quarter that Apple have made profits in excess of 200 M and somehow everyone is taking that as the norm.

    I still say 6M ipods (4 M HD and 2 M shuffles) and 1.3 M Macs sold this quarter. That should be equivalent to at least 3 M in revenue, which is close to the Xmas quarter. Compared to the same quarter last year thosse numbers will be outstanding.

  4. I see the halo effect anecdotally in that at my university library last year I noticed 5 PC laptops for every mac, but that has been shifting and today I saw basically the reverse. Although this may have been a an anomaly this trend does seem to be gaining momentum. I have a feeling that the analysts don’t really understand the ground swell here and that it is not just the ipod effect, but os x as an environment that so rewards the people who jump hestitantly, that they go out and tell their friends “hey no constant rebooting die to memory leaks or inability to detect a wireless network, no viruses, great preinstalled apps, no compatability problems, etc.

    I think apple will exceed all expectations over the next 18 months.

  5. I can’t stop laughing on this one. I hope everyone recognizes the difference between an report from a firm like JPMorgan and this joker. ( JPM raised it’s expectations today btw) “YEALD” is an open website that anyone can post to. Just call yourself an analyst, post an opinion….and you too can move markets (or at least try to get some hits so maybe you can pad your resume and get a real job).

    What is the investment world coming to? The author of the “research” note published a report in January that AAPL fair value price should really be $29 vs. the market price of $35. Its been trading in the $40’s. Yeah, I’ll listen to this guy.

    MDN really needs to highlight the quality level of its sources in order to not mislead the investing public.

  6. It’s time for the ‘Death Knell’ counter to be fired up again. The ‘experts’ are doubting that the kingdom of insanely great can overcome the forces of darkness (Sir Bill of Redmond & Co).

  7. Apple computer… Going out of busines for 20 years… 21 years… 22 years… 23 years… 24 years… 25 years… 26 years… and on and on and on…

    MDN Word: Island… as in send these idiot journalists to one.

  8. The downward spiral begins. Substance wins over style. crApple’s little hayday is now past. Now the world can return to real computing and crApple, alas, will be gone. But I hear they could band together with the Amiga User Groups and carry on for years after the company is finally put out of it’s misery. You Mac hippies are funny.

  9. ROFLMAO, JEW, you are reaching the ‘troll’ perfectionism of ‘ron’. Awhh the good old days. Keep then coming, almost spill my coffee out of laughings.


  10. A look at the news headlines on MDN for the past few days is proof that the staock analysts don’t know s**t about anything. With both buy and sell ratings appearing within a day of one another, it is pretty obvious that all the analysts do is flip a coin.

  11. Poor Jon – so jealous of the fact that Apple can turn out the [B]FIFTH[B] major revision to OS X since 2000, whilst his beloved Windows XP has now been static since 2001, apart from something called SP2 which actually just made it a little more secure.

    Sometime around mid-May, my colleagues and I will be revelling in another 200 new features in Tiger, which we’ll be able to implement with a reasonable degree of confidence that it isn’t riddled with security flaws. Poor Jon will just have his little nose pressed against the window looking at real improvements, as opposed to Longhorn which may be eighteen months away and will contain nothing but Avalon eye-candy, some driver level enhancements and yet more security fixes. And I’ll be implementing Tiger in a family pack allowing us to upgrade five Macintoshes for $199, whereas he will – sometime in late 2006 or early 2007 – have to pay a couple of hundred dollars for [B]EACH[B] copy of Longhorn.

    But then, it is a real OS – other than the fact that it doesn’t exist yet except in a form that’s guaranteed to crash in a demo.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.