Another analyst lowers earnings estimates for Apple
Update at 8:52 a.m. PDT, with additional information from the research note and charts.
A Wall Street analyst on Monday lowered earnings estimates for Apple's fiscal second quarter and year, marking a second whack from a financial soothsayer in the past few days.
Doug Reid, an analyst with Thomas Weisel Partners, lowered Apple's fiscal second-quarter earnings estimates from $1.10 a share to $1.05 a share. Its fiscal second quarter ends in late March. For the fiscal year, Reid cut estimates from $5.31 a share to $5.10 a share, according to his research note.
He also dropped Apple's 12-month stock price target by $10 to $120.
The lowered outlook for Apple comes amid a painful recession.
In checking with retailers and suppliers, Reid estimated that Mac unit sales are declining at a steeper rate than previously expected. He now expects Apple's second quarter to yield shipments of 2.1 million units, compared with his prior expectation of 2.4 million units.
For the full fiscal year, he now expects 9.6 million Mac units to ship, compared with his previous prediction of 10.7 million. Most of this downward revision is expected to come from Apple's notebook line. Reid now expects Apple to ship 6.7 million notebooks in fiscal 2009, compared with his earlier estimate of 7.5 million.
(Credit:
Thomas Weisel Partners)
(Credit:
Thomas Weisel Partners)
Despite his decision to lower his earnings estimates, Reid did note that he views Apple's stock price as undervalued:
Despite our reduction in estimates, we believe AAPL shares are undervalued given the company's strong cash generation capabilities, balance sheet, and clear Mac market share gain momentum. With respect to Mac market share in the 228mn unit worldwide PC market, we expect Mac market share to increase from 3.3 percent in (calendar year) 08 to 3.7 percent in (calendar year) 09. We expect that driving Mac market share gains in (calendar year) 09 will be (1) lowered priced all-in-one desktops released on March 3, 2009, (2) positive impact on Mac unit sales of introduction of DRM free music on iTunes at Macworld on January 6, 2009, and (3) continued momentum from the company's refreshed Macbook line released on October 14, 2008.
We also believe that negative investor sentiment around rising app store competition is misplaced. Specifically, we estimate that app store revenue to AAPL wil be only 0.5 percent of (fiscal year) 09 revenue based on a $23/user spend on applications and that the rise of all app stores, AAPL-controlled or not, serves to increase the desirability and loyalty of users on the iPhone and broader AAPL hardware and software platforms.
Apple was up 2 percent to $87.02 a share in early morning trading.
On Friday, Apple's stock fell as much as as 7.3 percent to $82.33 during intraday trading, after a J.P. Morgan analyst cut his earnings estimates and price target on the company.
That analyst's decision was also driven by the recession's grip on consumer spending.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
Whatever; I don't want to start a flame war (although this is what the commenter wanted) but yea.
Your analogy may actually be a good one- Soap is available at all sorts of price points. You have generic stuff that is cheap and plentiful that does the job as it's meant to, some with more perfume than others, some very high end products that have pretty packages and labels with snooty sounding names but in the end just are just soap. Heck, there's even soap you make yourself with hogfat for free.
Soap itself is not a luxury item, but some brands of it are most definitely in that category.
Despite what many people think a computer is not absolutely necessary. People survived and prospered for eons before the computer was invented, and even today a computer is not necessary. It does make many elements of work easier and more comfortable, but they are not necessary.
So, to take a little steam from you bash Apple troll-fest all computers are luxury items, not just Apple computers. No argument here, Macs are luxury items, so are Dells, HPs, Compaqs, Asus, Lenovas, etc.
Oh, and even if you absolutely want to use the high priced argument. All computers cost more then a pencil and paper, so again, all computers are luxury items.
In a 3rd world country? I for one couldn't use a credit card since business need computers, drive my car (uses a computer), use my voip phone, no online banking since I don't have a bank in the state I live, and my work requires a computer. For better or for worse computers are required for most people these days. I guess if your amish then no computers would work perfectly. A side from that you relay on a computer either in-diriectly or directly on a daily basis.
"..all computers are luxury items."
Thanks a million for the laugh. Keep em coming!
>I for one couldn't use a credit card since business need computers
Ever heard of cash. There was a time when credit cards didn't exist and life went on just fine. So, no need for comupters there.
>drive my car (uses a computer)
Walk, ride a bike, ride a horse, or drive a car built without a computer. Again, there is no need for a computer to get from point A to point B. A car is a luxury, so using a luxury item inside of a luxury item doesn't count. Try harder to make a valid point.
>use my voip phone
YOU DO NOT NEED A PHONE, it is a luxury.
>no online banking since I don't have a bank in the state I live
Try using a local bank. To find one look in a phone book, no computer required.
>my work requires a computer
Unless you are a computer scientist or a computer engineer or a programmer. I seriously doubt that it does.
>For better or for worse computers are required for most people these days.
You do not seem to grasp the concept of required. To quote you, why don't you look it up. Computers can make life easier, but they are not required.
To try and grasp this very simple concept answer this simple question. Would you die if all computers disappeared tomorrow?
Let me give you a hint to the answer, it is no. Thus, computers are not required.
>A side from that you relay on a computer either in-diriectly or directly on a daily basis.
Just because one uses computers regularly does not mean that they are required.
>Thanks a million for the laugh. Keep em coming!
To bad I don't find arrogant idiocy funny. Because I didn't get any laughs from you.
LOL - I almost pissed myself laughing this morning for real.
I couldn't leave it at that. That post is too funny to drop. Go back and read it yourself again or print it out and have some co-workers read it if you dare.
To quote you: "Lack of understanding is so frustrating."
I'd grab some before posting anything like that again. You won't find anyone to side with you about 'not required' in this day and age. Your comments are like saying "Let's walk and toss out the wheel we just invented and everyone is using now because you don't really need the wheel. You can walk again!" (Utterly moronic) Let's remove pace makers from people because people don't need em. They never had them before why do they need em now? Who needs life support machines which are computers? No one needs a quick way to get to the hospital via an ambulance. Who needs stop lights for that matter let's go back to stop signs! Let's all go back to horses and wagons with no computers! I'm not in the mood to repeat history and live in the wild west. The idea is you 'learn' from your mistakes and fix them in the future not repeat them blindly. Welcome to the work board club. This has been posted up for hundreds to read and laugh over. :)
@ xcal78: it's a shame *all* items take a dive in a recession. Troll Different.
"Pay no attention to that man behind the curtain..."
More than likely he lowered his estimate so that people might actually find out that he HAS one. Tool.
Kind of moronic, isn't it?
The saddest part is that these mouths are the ones that steer the market, like it or not.
Alex Alexzander
But, most people (75+%?) use a PC for the browser (most people still use IE) and MS Office. For those folks, a $500 laptop is sufficient to get the job done. A Mac truly is a luxury for them; they get no added value from spending at least double on the Mac laptop.
I agree, for most people, The Mac, and even Microsoft are luxuries. Much of the software folks need is available through the OpenSource community and will cost nothing at all.
A penny saved is a penny earned.
Alex
crAPPLE is solely supported by the "GADGET CROWD" with that grouped into two ranks - 1) the Dorks with too much money to burn on the PERCEIVED LATEST "hot" gadget thanks to the Apple Pimp Media (like CNut); and 2) the Apple Kool Aid Drinker Cliche that will mortgage their lives to buy every new product iteration that the MARKETTING COMPANY crAPPLE has designed, ENGINEERED and manufactured by someone else, primarily in the last 10 year Chinese Sweatshops.
Well FINALLY the money has run out on these two goof groups and crAPPLE is flopping in the sales. Oh and don't blame the market Apple Kool Aid Drinkers, because just last month several anal-ysts reported that Apple computers are falling quickly behind PC's in what IS BEING BOUGHT in this slower economy. There .... is my PROOF!
The AVERAGE Joe sees crAPPLE junk as OVER PRICED! And they aren't, excuse the pun, BUYING IT!
It is the above average people who buy Macs.
Does that mean you have a Dell?
Does that mean you have a Dell?"
No of course not, I have Macs. Well I do an HP for use when I absolutely must visit one of those unprofessionally designed Windows only websites.
Oh BTW, I'd say you're right about idiot customers keeping Apple in business, but that's what keeps every company in business. I'd say 99% of consumers (if not more) have absolutely no idea what they are buying and why and that's why advertising works. Big deal. That's how google, Microsoft, Yahoo, and everyone else makes their money. So grow up and go troll somewhere else.
- by AppleSuxLeo March 9, 2009 11:49 AM PDT
- It`s 1987 all over. Apple will revert to the crap little company it was back then. "7" will drive a stake into Apple`s heart.
- Like this Reply to this comment
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(33 Comments)Music in the car has already moved beyond the iPod. Many cars now have ability to plug in a USB thumb drive making the iPod obsolete. A64 GB thumb drive on sale at Frys is much cheaper than any iPod and way more useful. So long iPod.