Apple is performing in accordance to the expectations
Apple Inc. (NASDAQ:AAPL) has been able to keep the shipping of the smartphones in-line with the analyst expectations for December quarter. Brean Capital analyst, Ananda Baruah, performed some channel checks and noted that the number of units shipped during the quarter ending December 31 is in-line with expectations. With only 9 days remaining in the quarter, it is expected that Apple will be able to meet the target shipment of 77-78 million units with relative convenience.
While the number of phones shipped during Q1 FY17 is in line, there are some doubts regarding the shipment levels in Q2. Analyst Baruah has cut shipping estimates for the second quarter of fiscal year 2017 down to 52-54 million units from 56-57 million units. For the upcoming quarter, the Street expects revenue of $54.7 billion with EPS of around $2.14. The analyst, on the other hand, expects revenue of $55 billion with earnings per share of $2.20.
The analyst commented that while Apple does have the potential to outperform the Street estimates, it remains highly unlikely due to the prevailing weakness in certain geographic regions. The company has not been able to perform to expectations in Asia, specifically China, and has continued to struggle in the segment ahead of Christmas. As far as the annual estimates are concerned, the analyst sees Apple posting revenue of $230 billion with earnings per share of $9.54 at the end of fiscal year 2017. The Street estimate for 2017 revenue is $232 billion, while the EPS estimate is $9.26. The analyst reaffirmed Apple at Buy with a price target of $135.
The analyst ratings for Apple from 48 analysts are 16 Buy, 24 Outperform, 7 Hold, and 1 Sell. The stock currently trades at a price of $117.