Apple Rallies on Strong March Outlook
Apple Inc. shares rallied on Wednesday after Prudential Equity Group raised its earnings estimate for the firm's current quarter, expecting strong computer sales as well as lower parts costs. After meeting with Apple senior management and industry contacts within the Mac and iPod supply chains, research analyst Jesse Tortora of Prudential raised his FY2007 estimates to $3.40 per share, up 6 cents from previous projections.
Prudential expects seasonal iPod weakness but expects that to be offset by stronger Mac computer sales, as well as a favorable component cost environment.
"The company believes that Adobe’s launch of Creative Suite 3 in Q2 will lead to higher sales for both MacPro and MacBook Pro," Tortora told clients in a note this morning.
Tortora also said that Apple will sell its upcoming iPhone only on its web sites, Apple Stores, and Cingular shops. He expects a majority of iPhone sales to occur in Apple’s stores because he says consumers will want Apple to demonstrate the device's features.