Despite early-morning jitters on Wall Street, Apple on Tuesday reported yet another blow-out quarter. The Cupertino, California-based company managed the second most profitable quarter in its history, posting a net profit of $11.6 billion on $39.2 billion in sales. Apple sold 35.1 million iPhones into channels last quarter, along with 11.8 million iPads, 7.7 million iPods and 4 million Mac computers. While the firm continues to dominate the technology industry — Apple is currently the most valuable company in the world — several analysts think Apple is just getting started.
In a note to clients on Wednesday, Topeka Capital Markets analyst Brian White raised his 12-month price target on shares of Apple stock to $1,111 from his earlier target of $1,001. “Apple fever rocks on,” the analyst wrote. “Combined with our expectations for accelerated momentum over the next year with the iPhone 5, an Apple TV, an ‘iPad Mini‘ and a potential relationship with China Mobile, gives us confidence that the stock has meaningful upside potential from current levels.”
White notes that Apple’s margin performance in the second fiscal quarter was “nothing short of extraordinary” — Apple achieved a record gross margin of 47.4% while also managing a record operating margin of 39.3%. The analyst also wrote that any concerns over carriers squeezing iPhone subsidies have been put to bed, and Apple CEO Tim Cook confirmed as much during the company’s earnings call on Tuesday evening.
Apple issued especially conservative guidance for the third fiscal quarter according to White, likely because its next generation iPhone will not launch until some time this fall and the upcoming “iTV” is expected to launch in the fourth calendar quarter. BGR exclusively reported in December that Apple plans to launch a redesigned iPhone in Fall 2012, and recent reports suggest Apple’s much-rumored HDTV will follow ahead of the holidays.
Cannacord Genuity analyst Mike Walkley thinks the best is yet to come for Apple as well. “While our checks indicate slowing iPhone sales ahead of the iPhone 5 launch, we believe very strong international iPhone sales position Apple for very strong sales of an LTE iPhone 5 in the December quarter and beyond to drive strong F2013 earnings growth,” the analyst wrote in a note to investors on Wednesday.
Walkley continued, “We maintain our belief Apple is well positioned for strong sales and earnings growth driven by new product introductions across its portfolio, including iPhone 5 during this fall and iTV during F2013. Given our increased confidence of an iTV launch, we are adding iTV sales to our higher F2013 estimates. We reiterate our BUY rating and increase our target to $775.”
