BMO Capital ups Apple EPS on Mac sales strength, warns of initial constrained iPhone 3G supply

In a note to clients today, BMO Capital analyst Keith Bachman raised his Earnings Per Share (EPS) estimates for Apple’s 2009 fiscal year to $6.36 from $6.21, based on increases in his estimates on Macintosh notebook sales and the average selling price of iPhone 3G.

For Apple’s third fiscal quarter, Bachman expects Apple to ship 2.4-2.5 million Macintosh units; a 39% year-over-year unit growth. Apple is set to report Q3 08 financial results on Monday, July 21, 2008 at 2pm PDT/ 5pm EDT.

“Our thesis on Apple remains that CPU and iPhone share gains will drive earnings growth and the stock higher, compared with our expectations of continued weak iPod growth,” Bachman wrote.

Apple could run out of iPhones soon after launching the updated device, Bachman warned, citing “some recent production yield issues.” However, he believes that Apple “will be able to catch up with phone demand during the quarter.”

For calendar 2009, he expects Apple CPU units to increase 26%, significantly outpacing the general PC market that expects to show just 11.5-12% growth.

Bachman reiterated his Outperform rating and $205 price target on Apple Inc. (AAPL).

[Thanks to MacDailyNews Reader “Judge Bork” for the heads up.]

20 Comments

  1. All hangs in the balance if Apple cannot resolve “some recent production yield issues.” I reckon Apple didn’t expect to sell many iPhones in Canada if these recalled items can’t compensate for Apple’s failure to meet recent production goals.

    I’m curious to know where BMO Capital received it iPhone sales projections. Anyone know?

    If “production yield issues” result in increases of malfunctioning iPhones I wonder how BMO Capital will adjust their estimates.

  2. What’s more interesting is the 26% increase in CPU sales. It’s kind of ironic that Apple’s Mac sales, and the reason OS X was developed which is powering the iPhone (which gets all the press), is now Apple’s forgotten child. At least as far as the media is concerned.

  3. It doesn’t take Miss Cleo to predict that there may be a constrained supply right after the launch of a very popular product that will eventually subside after the initial demand is met. Nothing to see here.

  4. Dude, he’s probably referring to the report that came out that said Q3 orders were 12M but that production issues meant that shipments will only be 10.2M iPhone 3Gs. Of course, that implies the runrate is 12M a quarter. So, 12M in the fourth Q and 10.2 in Q3 plus the 3M or so sold in the first two quarters adds up to about 25M iPhones in 2008, produced and ready for sale. Who’s haha-ing now?

  5. @Smitty – What does “pete” have to do with MY life? Gobble, Gobble.
    My own overinflated self absorption is more important than anyone named ‘pete’ any day of the week.
    I’m just sorry for you poor ugly masses that will be lugging an overpriced iPhone 3G in a few days…. you are going to be the real turkey’s!

  6. @Ha, ha, ha
    Oh! Too bad! Apple sells too many iPhones!! This is terrible! Much more then the most optimistic claims!! This is realy weird! Isn’t it?

    P.S. And, of course, you would have had just the same sort, but just with oposite words, if Apple would have had few thousand iPhones left and unsold on the 18th of july…

    P.P.S. Isn’t that some sort of moron behaviour?

  7. The measure of the intelligence of a guy is when he can’t come up with anything but a simple F&*K O^F.

    A number of studies have shown the IQ of these guys is hovering around 90..

    But of course – this one is a PC fanatic – that fact by itself says it all….LOL

  8. Chris

    Why waste words on a moron? I thought “Fuck off” was reasonably succinct. I don’t need to elaborate or use flowery prose to prove my intelligence. My salary, car, lovely wife and house do that for me, along with the respect of my colleagues and friends.

    Re is short for regarding. So, “regarding Ha, ha, hah” means a response to him. I’m just a Apple fan wanting news and reasonable and insightful comments from our little community here. I get a little annoyed wasting time on pointless or antagonistic comments. And Zune Tang isn’t funny anymore.

    But yes, we shouldn’t feed the trolls and I apologise for that. Enough said.

  9. Your salary, car, lovely wife, house, friends and colleagues neither prove nor disprove the level of your intelligence. Those things can be gained by many other means, not all of them admirable.

    I’m in no way judging your intellegence or character. I just wanted to point out that statement holds no real meaning.

  10. My good friend, who I helped switch, received his new Mac Book Pro yesterday !!

    The only bummer, his wife had a baby boy yesterday , and he had to spend time with the family instead of exploring his new MBP

    Some people do not know how to set priorities

Reader Feedback

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