“In a note to clients Thursday, Merrill Lynch analyst Richard Farmer lowered his iPod sales estimate to 8.1 million units from 9.2 million units for the June quarter based on historical sales data. He lowered full-year sales estimates of the popular portable media player to 39.4 million from 43.4 million units,” The Associated Press reports. “But Farmer increased Mac computer revenue growth estimates ‘given what appears to be a decent early reception to new MacBooks. As iPods decelerate, the Apple story becomes more dependent on upside to Mac estimates, which we see as plausible,’ he wrote.”
“Farmer maintained a ‘Neutral’ rating on the stock but lowered his revenue and earnings estimates to a 2006 per-share profit of $2.01 on $18.9 billion of revenue, compared with prior estimates of $2.13 per share on revenue of $19.9 billion,” AP reports. “Analysts polled by Thomson Financial estimate 2006 earnings per share at $2.08 on revenue of $19.56 billion. The analyst also slashed 2007 profit estimates to $2.55 per share on revenue of $22.9 billion, from a prior estimate of $2.84 per share on sales of $25 billion. On average, Wall Street predicts Apple will post 2007 earnings per share of $2.61 on revenue of $23.6 billion.”
Full article here.
MacDailyNews Take: If Apple hits Farmers’ estimates of 8.1 million iPod units for the quarter and 39.4 million for the year, that will be an increase of 1.945 million units over last June quarter’s 6.155 million and an increase of 16.903 million units over Apple’s last full year iPod sales of 22.497 million (Q1: 4.58M, Q2: Q3: 5.311M, 6.155M, Q4: 6.451M). Obviously, growth rates north of 600% simply aren’t sustainable, but year-over-year iPod unit sales growth continues.
Unfortunately, the AP article doesn’t spell out by how much Farmer increased Mac computer revenue growth estimates. That bit of information would’ve seemed germane to us.
[UPDATE: 12:12pm EDT: Updated Take to remove misplaced quibble over the word “decelerate.”]
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Related article:
Apple still In ‘early stages’ of iPod expansion – May 24, 2006
He means as iPod GROWTH decelerates.
Wall Street doesn’t care about company’s maintaining as much as they do about company’s GROWING. Sad but true.
MDN, I think the reference was to the growth curve decelerating rather than the unit sales. It is hard to maintain a steep growth curve when you have the bulk of a maturing market.
Looks to me like companies all over the place upgrading AAPL trying to stop it from sliding deeper.
and yet AAPL is still down, if it is still heading down at “bargain levels” and with tons of upgrades, o boy… i wouldnt even touch the stock until it fell below $50
Nail on the head MacZeus. AAPL quadrupled over the past 3 years because iPod growth rate was between 200-600%.
This year AAPL has lost @ because that growth has slowed considerably.
At this point, I believe AAPL will remain relatively flat until we see some impressive Mac growth numbers. Even if a new iPod is released for the holiday season, I cant see 14 million units again. Hopefully I’m wrong:)
Everyone is upgrading Apple yet it is falling.
I think these companies that keep uprading it, are selling off their shares behind the curtains.
why else would the stock keep falling while so many upgrades pouring in?
Alan,
I can virtually guarantee you that Apple will exceed 14 million iPods in the holiday quarter. Only approx. 10% of U.S. population has iPods – this Christmas season will easily be Apple’s biggest ever for iPods.
Looks like Palm is headed higher.
Theory, yes, you are right. Apple is the victim of a “Bear Raid.”
Of course, the whole market has lost 1000 points over the last month, so it’s not just Apple.
Investors are afraid of continued interest rate hikes and a market crash.
decelerate doesn’t mean a decrease. It means a lower rate of increase.
I don’t see 14million ipods during a Play Station 3 season.
and oh, 100 other companies trying to compete Apple.
Besides, people dont want a New ipod, they just want something that can play music, so they already got one that does just that.
Fred, I’m not saying 14 mil isn’t possible, I’m just skeptical.
I would agree with Alan,
It is unfair to talk about Apple stock prices falling when the boys at the Federal Reserve are messing with things again. Lets just hope they don’t become over zealous and cause another ’89 crash.
Alan,
Okay, I’m confident:
Apple will sell more than 14 million iPods in the 2006 holiday quarter.
Read the “Related article” above.
We can check back with each other to see how right I was in January 2007 when MDN posts the results of Apple’s holiday quarter.
Do people here only look at one stock everyday?
The market is in troubled times, things in general are shaky, it’s happening across the board, not just to our beloved AAPL.
The god d*mn Germans got nuthin to do with it.
At this point, I believe AAPL will remain relatively flat until we see some impressive Mac growth numbers.
The ONLY reason AAPL is down is because Apple management makes on estatement each quarter about thier performance. That happens during their earnings conference call (July 19 this year).
In the absense of any confirmation that Apple is shipping as they stated during the last conference call, the stock is waning. This is one oversold stock.
The key to future growth in AAPL hinges entirely on Apple management’s forward guidance during the July conference call. If that guidanc e continues as tepid as it has been during the past tow ocnference calls, then you can expect AAPL to continue trading flat to lower.
I don’t see management providing tepid guidance. Rather I see them guiding more aggressively than they have recently. Historically, Q1 and Q4 are the best two quarters of Apple’s fiscal year, and we are headed into both – back to back. Couple that with the fact that the Intel transition is all but complete (the important parts anyway), and Apple/AAPL is going to grow rapidly during the next 6 months.
Anybody not buying at these levels is a talker, not an investor.
I agree with Gregg. My take is that Apple sales have continued to grow during the typically slowest times of the year. Not bad for a company in the throws of a major transition. Furthermore, though it’s not scientific, anecdotal evidence here at my university suggests sales of Macs are going to be very strong. I’m noticing Mac laptops popping up everywhere. I was literally the only one for a couple years, it seemed.
If I had more cash, I would be snagging this stock right now myself. This company is on a roll. It’s executing flawlessly. Even it’s ability to keep rumors under wraps bodes well for what’s company– interest is keen in their products, too. New iPods and new Mac pros are on the way. There’s probably one more thing, too.
Can’t wait to see Leopard! I’m such a geek, I love it!
Anybody not buying at these levels is a talker, not an investor.
Except of course for a few minor factors like say, INFLATION, UN-EMPLOYMENT RATES UP, RISING INTEREST RATES, REAL_ESTATE MARKET DOWN, NATIONAL SPENDING DOWN and a STEEP DECLINE IN THE STOCK MARKET OVER THE PAST MONTH.
idiot,
i don’t know which dictionary you use, but here is an excerpt from merriam webster:
decelerate
One entry found for decelerate.
Main Entry: de·cel·er·ate
Pronunciation: (“)dE-‘se-l&-“rAt
Function: verb
Inflected Form(s): -at·ed; -at·ing
Etymology: de- + accelerate
transitive senses
1 : to reduce the speed of : slow down
2 : to decrease the rate of progress of
intransitive senses : to move at decreasing speed
– de·cel·er·a·tion /(“)dE-“se-l&-‘rA-sh&n/ noun
– de·cel·er·a·tor /(“)dE-‘se-l&-rA-t&r/ noun
as forest gump says . . .
MW : total as in total nonsense what some people spout
I agree with what Desperate? said above: This stinks to high heaven of an effort to keep at least SOMETHING in the stock market from sliding farther down than everything else has been lately. And since Apple has incredible brand power right now, they are the candidate to be used for that project.
How do you project incredibel sales growth in Apple’s computers when the iPod is slowing down? Mac prices have gone up while iPod prices have remained static, and we’re supposed to believe that the former is about to outpace the latter, when that hasn’t been the case in, like, ever? And what about Apple’s latest revelations that their computer sales haven’t kept pace with industry growth – are we supposed to just for get that?
MDN says: “Unfortunately, the AP article doesn’t spell out by how much Farmer increased Mac computer revenue growth estimates. That bit of information would’ve seemed germane to us.”
Gotta love the understatement their, MDN. Indeed it would be “germane”. That and the fact that he doesn’t really let us in on his sources tells me that all this conjecture probably comes from the Magic 8Ball he keeps in his bedroom.
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