Tuesday, January 15, 2013

Apple Inc. Sales Declines Won't Cramp Quarterly Results: Munster

Gene Munster is still keeping the faith in Apple Inc. (AAPL)'s ability to produce string quarterly earnings. He notes in a recent statement that even though iPod and Mac computer sales figures are lower than last year at this time, they won't affect the overall earnings report.

ValueWalk has noted that Munster still expects the Cupertino company to post a strong earnings report, although the stock has fallen off by more than $200 per share from its high water mark of $705 last year. The stock dipped below $500 per share in trading on Monday, and has continued to drop today. At press time (1:05 PM EST) it is standing at $489.19, down 2.5% or $12.67.

Last night, Munster issued a report to investors that indicated he had analyzed the domestic retail data that the NPD Group had on Apple, and the December quarter will most likely show that Mac sales are down 14% on a year over year basis. He further mentions that Apple had reported Mac growth that exceeded the NPD data by roughly 12%, which would indicate a decline in Mac sales of about 2% year over year.

Munster, ever careful to consider everything in a situation, notes that comparison of last month with December of 2011 is not a truly accurate comparison, as the last month of 2011 had 5 weeks in it. Because of this, he said he "remains comfortable" with his estimated decline of 7 % in relationship to Mac sales. Translated into real numbers, this means that Apple Inc. (AAPL) sold approximately 4.8 million Macs in the December quarter.

iPod sales were also an item of interest, and according to the data from NPD, Apple sold between 11.5 million and 12.5 million iPods, which would fall directly in line with Munster's estimate of 12.3 million units. His analysis indicated that Apple is posting a 23% decline in iPod sales on a year over year basis. This number is 3% greater than the consensus estimate of 20% posed by the Street.

Munster tells investors not to worry about the declines in Mac and iPod sales, as Apple is most likely to post high numbers for the iPhone 5. Because of this, Munster has yet again espoused his faith in the company, and rated it at Overweight. He has set a price target of $875 per share.

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