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Apple Fourth Quarter May Exceed Expectations

Two analysts last night issued positive predictions that Apple will exceed its stated financial business targets in its September (FY 2006) quarter. Apple will report its September 2006 and full financial year 2006 results on Wednesday 18 October.

American Technology Research analyst Shaw Wu expects the company will "report results at the upper end, if not exceed its guidance of $4.5-4.6 billion in revenue and $0.46-0.48 in EPS".

Wu predicts that continued demand for portable Macs and robust demand for iPods will drive Apple's results. He also predicts Apple management will offer a conservative target for the Christmas quarter, predicting a target of $5.7-6.1 billion.

The analyst dismissed Wall Street concerns about Apple, calling these "unreasonably aggressive", countering, "we believe Apple remains among the best positioned technology companies, with several catalysts in 2007."

Equity Research managing director, Jonathan Hoopes, also sees potential in Apple stock, saying, "the recent weakness in Apple stock is, in our opinion, unwarranted and represents a good buying opportunity." He holds a 'Buy' rating on the stock with a $100 per share price target.

The analyst expects much more growth from the company, which he predicts will continue to accumulate PC marketshare. Hoopes believes that: "Never in the history of the PC has a company been better positioned to both gain share and improve profitability."

He sees retail demand as high, notebook demand causing shortages, and the impact of the stock options debacle lifting. Looking forward, Hoopes sees more Apple growth in PC marketshare, iPod popularity, Apple retail stores, software releases and speculates on a "likely move into the enterprise".

"We expect the company to significantly increase market share, experience above-industry unit shipment and revenue growth, and improve earnings power, which should result in higher valuation multiples," he told investors last night.

News source: Macworld UK

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