Apple (AAPL) Band-Aid Ripped Off, Cutting PT - FBR Capital

FBR Capital analyst, Dan Ives, believes that Apple (NASDAQ: AAPL) hit the street's iPhone bogey but reduced his $150 PT to $130. The analyst believes that wearables could be the silver bullet for the company. He expects a second iWatch version to be released in March that "can start to move consumers toward this new avenue of technology growth and drive adoption ". No change to Outperform rating.

Quarter color: Total revenue of $75.9 billion (2% year-overyear growth) slightly missed the Street’s estimate of $76.6 billion. iPhone revenue came in at $51.6 billion (up 1% year over year), above the Street’s estimate of $51.3 billion as the company experienced better-than-expected ASPs ($691 versus the Street's $680) and declining component costs helped lift margins during the quarter. Services came in at $6.06 billion ($5.5 billion excluding a patent infringement paid to Apple), beating the Street’s $5.32 billion estimate. Other products revenue (Apple Watch, Apple TV, iPod, Beats Electronics, and Apple-branded and third-party accessories) was $4.35 billion, missing the Street's $4.71 billion estimate, up from $3.05 billion in the prior quarter, and (up 62% year over year) from $2.69 billion in the year-ago period.

Estimate revisions: For F2Q16 (March), total revenue and EPS estimates went from $55.6 billion and $2.33 to $52.3 billion and $1.97 largely due to the weaker-than-expected uptake of the latest iPhone product cycle (e.g., iPhone 6s/6s+). For FY16, total revenue and EPS estimates drop from $238.9 billion and $9.65 to $225.8 billion and $8.95. For FY17, total revenue and EPS estimates fall from $255.5 billion and $10.54 to $243.9 billion and $10.07.

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 $99.99 yesterday.

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