Analyst: Apple’s Quarterly Results May Silence ‘iPhone Naysayers’

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Cantor Fitzgerald analyst Brian White weighed in on Apple’s (NASDAQ:AAPL) strong March quarter results in a note to investors on Thursday. Although White is bullish on Apple with a “Buy” rating and a $777 price target, the analyst had predicted quarterly revenue of $43.24 billion, slightly lower than the consensus estimate of $43.67 billion. On the other hand, White expected earnings per share of $10.29, slightly higher than the Street’s estimate of $10.19. Last night, Apple announced quarterly revenue of $45.6 billion, EPS of $11.62, and gross margin of 39.3 percent.

Although White believes that the market was “pleasantly surprised” by Apple’s stronger-than-expected second-quarter financial results, he reiterated his belief that “the rollout of the iPhone 6 and entry into a new product category with the iWatch this year” will prove even more important. However, White noted that Apple’s iPhone unit sales of 43.72 million last quarter may silence the “iPhone naysayers.” Apple’s iPhone unit sales “trounced” White’s own recently raised iPhone sales estimate of 36 million units.

White believes that the rumored large-screen iPhone 6 will be especially popular in China and he predicted that “the ramp with China Mobile (NYSE:CHL) will accelerate in the second half of the year.” Apple is widely expected to launch the next-generation iPhone in September this year. White’s prediction was bolstered by the unexpectedly strong iPhone sales in several emerging markets.

“[T]hrough the first half of 2014, Brazil was up 61 percent, Russia was up 97 percent, Turkey was up 56 percent, India was up 55 percent, and Vietnam was up 262 percent,” wrote White. “We believe Apple has been expanding its distribution channels in emerging markets and has also made a increased effort to sell into India.”

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