Apple’s Q4 miss was a gift for investors, Ticonderoga says

Apple reported fiscal fourth-quarter earnings on Tuesday evening that missed analyst estimates by a fair margin, due in large part to iPhone sales that fell well below the Street’s consensus. Analysts weren’t expecting iPhone sales to slow at all, but even Apple CEO Tim Cook acknowledged on the company’s earnings call that the overactive hype machine ahead of the company’s October iPhone refresh was largely responsible for the stall. Firms are still bullish on Apple despite the miss, of course, and one analyst views Apple’s fourth-quarter earnings as a “gift” ahead of the holiday season. Read on for more.

Shares of Apple stock dipped more than 7% in after-hours trading following the company’s earnings report Tuesday evening, and Ticonderoga Securities analyst Brian White seems to welcome the slide. “We believe the iPhone pause going into the launch of the iPhone 4S was the culprit for this miss and provides investors with a gift ahead of the holiday season,” the analyst wrote in a note to investors Wednesday morning.

White added that Apple’s guidance for the December quarter is much stronger than usual, likely bolstered by the “resoundingly successful” launch of the iPhone 4S. “Netting this all out, we would be aggressive buyers of Apple this morning as we anticipate a big holiday season for the company and the stock was trading after market at just 8.8x our CY12 EPS estimate (ex-cash).”

“While iPhone 4 sales clearly paused ahead of the new iPhone rollout, the blowout iPhone 4S demand leaves little doubt in our mind that Apple is poised for another blockbuster iPhone product,” White continued. “At the same time, the iPad continues to gain momentum and we believe¬†lower priced point product is on the way in early 2012 as we highlighted during our trip to China, while Apple’s PC market share has room to run.”¬†Apple announced on Monday that it sold more than 4 million iPhone 4S handsets during the smartphone’s opening weekend.

The analyst now expects Apple to report revenue of $37.9 billion and earnings of $9.54 per share in the first fiscal quarter of 2012, and he reiterated a Buy rating on Apple stock with a price target of $666.

blog comments powered by Disqus