Bloomberg News

Apple Gains After Analysts Renew Optimism: San Francisco Mover

April 17, 2012

Apple Inc. (AAPL:US) shares climbed 5.1 percent, snapping a five-day decline, amid fresh optimism that the iPhone and iPad will top sales projections when the company delivers quarterly results next week.

The shares (AAPL:US) rose to $609.70, marking the biggest gain (AAPL:US) since Jan. 25. Yesterday the stock had its largest decline in six months on speculation that wireless carriers may cut subsidies for the iPhone. Some analysts (AAPL:US) also pinned yesterday’s drop to traders taking their cues from so-called technical indicators.

Apple’s financial results, scheduled for release on April 24, will show that consumers are snapping up the iPhone in China and other countries where the newest version of the device was recently introduced, according to Abhey Lamba, an analyst at Mizuho Securities USA Inc. He expects the stock to get a boost when Apple exceeds analysts’ predictions for profit and sales.

“They have strong momentum with iPhones and strong momentum in tablets,” Lamba said in an interview. “We will see strong numbers.”

Apple was part of a broader rally, with U.S. stocks rising the most in a month. The Standard & Poor’s 500 Index gained 1.6 percent, and the Dow Jones Industrial Average climbed 1.5 percent. The Nasdaq Composite Index advanced 1.8 percent.

Lamba isn’t the only analyst predicting better-than- anticipated financial results at Apple. Matthew Hoffman, an analyst with Cowen & Co., raised his estimate for iPhone sales in the March quarter to 32 million from 27 million.

Lowball Estimate?

“That number may well be 4 million to 6 million light of the actual iPhones sold during the quarter,” Hoffman said in a report today.

The quarterly results also will be buoyed by the release of the new iPad, which sports a high-definition screen and faster processor. Lamba said Apple sold as many as 13 million iPads in the quarter, above the 11 million predicted by other analysts. Strong sales of the tablets will continue until at least the holiday shopping season, when rivals may introduce more competitive devices, he said.

Apple also may be developing a smaller iPad that could be sold at a lower price than the current models, which start at $499, according to a report by Shaw Wu, an analyst at Sterne Agee & Leach Inc.

Shares of Apple, the world’s most valuable company, have risen 51 percent this year.

“It had a healthy run,” Lamba said.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • AAPL
    (Apple Inc)
    • $118.37 USD
    • 1.90
    • 1.61%
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