Apple Preview: What Wall Street Is Saying

NEW YORK (TheStreet) - Apple (AAPL) reports fiscal first-quarter results after market close with many on Wall Street expecting good things from the tech giant.

Last week, Goldman Sachs increased its Apple price target, pointing to likely first-quarter strength in iPhone and iPads. Goldman analyst Bill Shope also expects Apple to receive a March quarter boost from its recent deal with China Mobile (CHL).

The holiday season is also expected to spell good news for Apple's numbers. Investors will be closely monitoring the first-quarter results to see whether CEO Tim Cook's prediction of an "iPad Christmas" came true.

The Apple feel good factor received another boost last week when Carl Icahn revealed that that he has bought another $500 million worth of Apple stock, taking his total stake to $3.6 billion. In a tweet, the billionaire investor described Apple's value as a "no brainer".

TheStreet's Jim Cramer recently urged investors to stop focusing on what Apple will do with its cash, and start focusing on how well the company's products will do this year.

Apple ended last quarter with $146.76 billion in cash and cash equivalents.

The Cupertino, Calif.-based firm beat analysts' estimates last quarter although the company's shares fell following the results on concerns that the company's gross margin is contracting. Apple forecast a first-quarter gross margin between 36.5% and 37.5%, although this would have been higher were it not for $900 million of deferred revenue.

Analysts surveyed by Thomson Reuters expect Apple to post fiscal first-quarter sales of $57.46 billion and earnings of $14.07 a share, up from $54.51 billion and $13.81 in the prior year's quarter.

Here's a snapshot of what analysts expect from Apple:

Cantor Fitzgerald analyst Brian White (Buy - $777)

"After a difficult FY:13 that resulted in the first EPS decline since FY:03, we believe Apple will begin FY:14 on the right foot with a healthy report that supports our view the company can return to EPS growth in FY:14 and accelerate its innovation cycle."

"For 1Q:FY14, we believe Apple will at least meet our revenue estimate of $58.6 billion and our EPS projection of $14.31, while delivering upside to the Street's (FactSet Consensus) sales projection of $57.5 billion and EPS estimate of $14.09. Recall, Apple's 1Q:FY14 sales outlook calls for revenue of $55-58 billion."

Pacific Crest Securities analyst Andy Hargreaves (Sector Perform)

"FQ1 (Dec.) Results and FQ2 (March) Guidance Should Be Very Good. We expect Apple to report upside to our current FQ1 estimates of 50.9 million iPhones and 24.5 million iPads, which should drive FQ1 revenue and EPS above our estimates of $57.3 billion and $13.94 and above the consensus estimates of $57.5 billion and $14.05, respectively. We also expect Apple to guide FQ2 revenue and operating metrics in line with or above current Street expectations for revenue of $46.0 billion and EPS of $10.90."

Credit Suisse analyst Kulbinder Garcha (Neutral - $525)

"For F1Q14, we expect revenues / EPS of $59.9bn (+60% q/q/+11% y/y)/$15.00 vs. consensus at $57.4bn/$14.08. China Mobile is a positive for Apple over the longer term, we do note however that the TD-LTE network remains a work in progress. For FQ213 we assume revenues of $43.2mn (-20% q/q/+10% y/y) and EPS of $10.56 and believe there is some risk to street estimates. LT we remain concerned with Apple's decision to remain a premium priced SP vendor, and this continues to limit its TAM and growth, as such, we reiterate our Neutral rating and TP of $525."

--Written by James Rogers in New York.

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