) to overweight from neutral.
Analyst Steven Fortuna says the 70 cents first-quarter earnings per share topped his 53 cents estimate, and the company's $3.5 billion first-quarter revenues beat his $3.25 billion estimate. He notes the earnings per share upside came on dramatically improved operating leverage and a decline in component costs. Both CPU and IPod units saw the upside.
Fortuna says, while he typically isn't reactive to earnings, he's taking an exception here due to the magnitude of the upside and the accompanying upward revision in guidance. He believes the company has begun a market share breakout story that could last for the foreseable future.
He ups his $1.65 fiscal 2005 (ending September) earnings per share estimate to $2.15, and his $2.20 fiscal 2006 earnings per share to $2.50. He raises his $75 target to $93.