Apple Quarter Looks Bright on Eve of Tablet Unveiling

By Jessica Davis  |  Print this article Print


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Apple's earnings, to be reported Jan. 25, are likely to be boosted by big sales gains for iPhones, but uncertainty remains about how much Apple's expected new tablet form factor will add to this fiscal year's revenue picture.

The big news from Apple (NASDAQ:AAPL) next week may be coming on Jan. 27, when many are speculating the PC and smartphone giant will announce a mobile device with a tablet form factor, but first, on Jan. 25, the Silicon Valley icon will be releasing its first-quarter 2010 earnings, and analysts are expecting good things.

Financial analyst firm Sanford Bernstein is forecasting that Apple will deliver earnings per share of $2.24, an increase from $2.21, and revenues of $12.6 billion, up from $12.42 billion for the previous quarter.

For the second quarter Bernstein is forecasting revenues of $11.24 billion and earnings per share of $1.95, both of which are above consensus analyst estimates.

Bernstein forecasts Apple will announce fiscal first-quarter sales of 3.1 million Macs, a 24 percent increase year over year; 19.8 million iPods, a decrease of 13 percent year over year; and 8.5 million iPhones, a 94 percent increase year over year and a 15 percent sequential increase.

"We expect Apple to provide conservative guidance, as per usual," wrote senior analyst Toni Sacconaghi in a brief report previewing Apple's earnings. "On average over the last 12 quarters we note that Apple has guided 4 percent below consensus revenues and 13 percent below consensus posted earnings per share."

Apple's iPhone sales and sales of its (expected) forthcoming tablet will tell much of the revenue story going forward, the firm notes.

"Whisper numbers are that Apple could sell 5 million to 10 million tablets in its first year, which we think is unrealistic given its expected price point and the first-year sales volumes of other game-changing devices—iPod, Kindle, iPhone, netbooks," Sacconaghi wrote, adding that Bernstein estimates the price of the coming Apple Tablet at $750.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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