Apple (AAPL) Delivers in Q3, Estimates Rise on Lower Share Count - Needham & Company

July 24, 2013 9:48 AM EDT
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Needham & Company analyst Charlie Wolf reiterated a Buy rating and $710 price target on Apple (NASDAQ: AAPL) following in-line third quarter results.

The firm raised fiscal 2013 estimate from $38.90 to $39.00 and 2014 estimate from $41.30 to $42.00 chiefly because of a decrease in shares outstanding.

Wolf notes the upside surprise was iPhone sales, which totaled 31.2 million units, about four million above the consensus estimate. The downside surprise was iPad sales, which came in at 14.7 million units compared to the firm's estimate of 17.5 million units.

The firm is expecting the next-generation iPhone and iPad in September/October. They do not expect products for new categories this year. That said, Wolf said "it's no secret that Apple is working on wearable devices and has progressively increased the content available on Apple TV. These initiatives suggest that Apple should once again begin to enter new product categories in 2014, although it is difficult to imagine that they will be the revenue producers that the iPhone and iPad have turned out to be.

Wolf said the ongoing risk in the Apple story continues to be whether the company can innovate at the same pace and with the same disruption that occurred during the Steve Jobs era. "We are approaching a point when an answer might be forthcoming," he said.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $418.99 yesterday.

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