Shares of Apple Inc. climbed 4 percent in Wednesday afternoon trading after Prudential Equity Group said the computer and iPod maker is poised for a solid fiscal second quarter amid strong Macintosh sales.
Shares of Cupertino, Calif.-based Apple rose $3.35 to $89.25 on the Nasdaq Stock Market on average volume. Shares are down about 12 percent since touching a 52-week high of $97.80 a month ago when Apple Chief Executive Steve Jobs introduced the long-anticipated iPhone.
"Our recent checks with industry contacts suggest a solid March quarter with seasonal iPod unit weakness being more than offset by stronger Mac sales and higher margins due to a favorable component cost environment," analyst Jesse Tortora wrote in a client note.
Tortora, who has a "Neutral Weight" rating on the shares with a $100 price target, said his checks with industry contacts in the Mac and iPod supply chains suggest Mac sales are tracking ahead of company expectations led by strength in the Macbook and iMac lines.
Tortora said iPod sales dropped so far this quarter on the heels of a strong holiday season. Sales of the video iPod and Nano appear weak, but have been partially offset by stronger sales of the iPod Shuffle as multiple color offerings were rolled out.
Looking at Apple's iPhone, a wireless Internet device and cell phone, Tortora said it will be sold exclusively through Apple stores and its Web site, in addition to AT&T's Cingular Wireless stores. Apple expects most of the iPhone sales to take place in Apple stores, since consumers will want a demonstration of the device's features.
Via Businessweek
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