Apple Inc. Still Topping Wall Street Estimates

Apple Inc. will announce quarterly earnings this week and rumor has it the company will once again top Wall Street’s estimates, Reuters reported.  However, analysts say it may have to surpass by leaps and bounds to drive an already soaring share price higher. 

With CEO Steve Job back on board after being on medical leave, the maker of Mac, iPhone and iPod is in full swing with more than doubled stocks this year teetering on a record high, and has beat profit expectations two consecutive years. 

Although, market experts point out one possible set back this quarter with the iPhone.  Research in Motion’s Blackberry and Palm’s Pre drive hard competition in sales when comparing numbers a year ago, and may not be adequate to persuade the insatiable expectations of some investors. 

"The driver is if the iPhone keeps selling well," said Hudson Square Research analyst Daniel Ernst. He also noted that Mac sales, the majority of Apple’s revenue, should be remarkable.

"Mac is a huge part of the company and I think it’s going to get better next year, so while there may be some risk in the iPhone sales for the quarter, people will take some solace in that the Mac sales are pretty strong."

Apple Inc.’s consistent pattern of topping Wall Street estimates have prompted nearly 20 analysts to lift price targets since September. 

"Expectations for Q4 are high going into FY Q4, and we would not be looking to make a big bet on the quarter," Sanford Bernstein analyst Toni Sacconaghi wrote in a recent research note, adding that Apple may not deliver a "blow-out" iPhone number.

But investors aren’t always impressed by simply exceeding average expectations.  IBM beat Wall Street predictions for revenue and earnings slightly and lifted its full-year outlook, but the Friday market report revealed a 5 percent drop.  Conversely, shares increased 4 percent for Google after it beat by a wide margin. 

Apple has outdone a majority of Wall Street EPS forecasts in every quarter for the past two years, and beat on revenue every quarter save one.

Apple critics are few because of this, and analysts widely agree that stock still had room to continue upward.  Despite an economic downturn and threats of handicapped sales on expensive products, the company has ironically outperformed competitors.  Additionally, Apple has not reduced costs to protect its bottom line like so many others.

As of September, Apple reported sales of more than 30 million iPhones, which translates into about 3.5 million so far for the quarter, meaning the company would have to gain some momentum to beat the total last year.

Even still, analysts anticipate Apple shares to increase in the coming months with the help of a new product ““ in the form of a rumored tablet device ““ about to launch. 

Consistent with the market’s downturn, shares of Cupertino, California-based Apple dropped 1.3 percent to close at $188.05 on Nasdaq.

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