‘iPhone frenzy’ to drive huge Q1 for Apple

By all accounts, Apple is preparing to report the biggest quarter in the company’s storied history on January 24th, fueled by solid Mac sales, strong iPad demand and unprecedented iPhone sales. And despite Wall Street’s high expectations, a number of analysts are still expecting Apple to beat the Street when it reports its first fiscal quarter earnings next Thursday. RBC Capital Markets’s Mike Abramsky on Wednesday told clients that an “iPhone frenzy” in Apple’s December quarter will result in a solid first-quarter beat, and the analyst raised his target on Apple stock as a result. Read on for more.

Abramsky sees Apple reporting revenue of $40.2 billion for the first fiscal quarter, representing 50% growth over the December quarter in 2010, with earnings of $11.00 per share. Wall Street is expecting Apple to report $38.7 billion in revenue and EPS of $9.95.

RBC estimates that Apple shipped 32 million iPhones in the first quarter, including 8.5 million iPhones shipped to AT&T, 4.2 million shipped to Verizon and 1.5 million units shipped to Sprint, and another 17.8 million iPhone shipped internationally. Abramsky notes that end user sales were solid as well, with “unprecedented iPhone sell-through,” and “stockouts in multiple regions.”

The firm also sees Apple having shipped 13 million iPads in the first quarter along with 5.1 million Mac computers. In the second fiscal quarter, Abramsky is looking for guidance of $32 billion in revenue and earnings of $8.00 per share while the Street’s consensus sits at $31.8 billion and $7.94. He also reiterated his Outperform rating on Apple stock and raised his price target to $525 from $500.

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