Munster: Apple Will Blow Out Earnings

steve jobs pointing apple

Apple (AAPL) will beat Street estimates on the back of stronger than expected Mac and iPhone sales, says Piper Jaffray’s Gene Munster in a note this morning.

Munster is raising his estimates for the September quarter. He expects earnings per share to be $1.37 on $9.1 billion in revenue. His previous estimates were $1.24 on $8.9 billion.

He expects Mac unit sales to 2.8 million units, and iPhone sales to be 7.5 million units. Gross margins are expected to be 36% which is just off the 36.4% average over the last two quarters.

Here’s what Munster sees in each segment:

  • Mac: Year over year NPD growth rates trending positively, indicating a 7% gain in unit sales, equating to 2.8 million units sold. The Street only expects 5% growth.
  • iPhone: Munster’s checks indicate demand is outstripping supply. With a strong level of demand Munster sees iPhone units at 7.5 million.
  • iPod: Munster sees iPod sales down 10% year over year, but says the street is factoring in a 14% dip.
  • December guidance: Expect the typical low-balling from Apple. Over the last 12 quarters, Apple has guided revenue 4% below expectations. Munster sees them guiding EPS of $1.68 versus the Street’s expectation of $1.91 and revenue of $10.98 billion versus the Street’s $11.44 billion.

The stock is rated overweight, and Munster believes shares will move higher in the next three months. He has a $235 price target.

Here’s the key metrics:

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