Apple Earnings Likely to “Wow”

Published on July 19, 2011
by John Paczkowski

Apple is renowned on Wall Street for regularly beating analysts’ financial expectations, and most folks expect it to do just that when it reports third-quarter results after market close today. Certainly, the company — whose share price has been charting fresh record highs over the past few days — appears poised to turn in a strong set of financials.

The iPhone 4 continues to sell well, the Mac is kicking ass and iPad sales have presumably been surging now that Apple has finally begun to meet demand for the device.

Consensus among analysts seems to be that strong hardware sales will post $5.83 a share in earnings on $24.9 billion in revenue, compared to $3.51 in earnings on $15.7 billion in revenue a year ago. Meanwhile, Apple itself has said to expect $5.03 a share on $23 billion. The company will almost certainly beat both sets of numbers; the only question is by how much.

According to J.P. Morgan analyst Mark Moskowitz, who slapped a $450 price target on Apple’s shares last week, the answer to that question is: “By a lot.”

“Our research inputs indicate that iPhone shipments exhibited no signs of a slowdown,” Moskowitz told clients. “Plus, we expect the momentum to continue, driven by the looming iPhone 4-plus refresh … Our call is that the wow factor, i.e., extraordinary upside to consensus estimates, is about to return to the model.”

Apple has beaten Wall Street estimates for 13 consecutive quarters. Today may well prove to be the 14th.

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