Analyst Brian White of Cantor Fitzgerald, who is currently on a tour of Asia and meeting with partners in Apple's supply chain and resellers, has told investors
in a memo on Monday that his sources indicate that Apple sales strengthened substantially in March, following a "soft" January and February. While still believing that sales will be down 24 percent from the holiday quarter (compared to an average drop of 19 percent), White said Apple may still "surprise" analysts -- who have been expecting revenue to be generally flat -- in its next earnings report.
AAPL year-to-date closing prices
According to his memo to clients, White claims that sales for Apple suppliers were up 34 percent month-over-month, significantly higher than the usual seasonal increase of 24 percent. No specific reason was given, and the rise may point more towards a healthier Q3 than have an impact on Q2 results, but the fiscal second quarter was the first full quarter that Apple has had its iPhone line available through China Mobile
-- the country's largest carrier -- which may be responsible for some of the increase.
This, along with apparently strong sales
of the new Mac Pro in its first full quarter, may help Apple beat the consensus estimates of $43.6 billion in revenue, based on Apple's own guidance of between $42 billion and $44 billion. The $43.6 billion estimate also matches exactly what Apple reported in revenue in the year-ago quarter, reports AppleInsider
While it remains possible for Apple to beat analysts' stimates slightly, there is little reason to think the results will be far off the consensus estimate either way. No Apple products have received major updates, nor did any new products emerge during the quarter, suppressing any opportunity for significant revenue growth -- and making Apple even more dependent
on iPhone and iPad sales to maintain the status quo. In contrast, Samsung has told investors that it's fiscal Q1 sales will miss analysts' projections, and while profits are up from the previous quarter, they are down from the year-ago quarter.
White is the same analyst who last week
said he believes an "iPhone 6" with a larger display would likely be the key to unlocking the Chinese market, and added in his memo today that he'd heard from consumers that many bought a Samsung device primarily due to the larger screen sizes, since many in the country can't afford both a tablet and phone. These same buyers indicated they would consider switching to Apple if it produced a larger-screen iPhone, as it is rumored to be doing in the fall with the iPhone 6.
Interestingly, estimates from Morgan Stanley's AlphaWise service predict that iPhone sales will be strongly above consensus estimates of 39 million units, predicting 42 million units sold
. If correct -- and the service has a reasonably strong track record on such predictions -- it may still not be enough to raise revenues substantially over predictions of flat growth, given White's contention of weak sales in the earlier part of the quarter, but would likely cause a jump in AAPL.
In the meantime, Apple may goose its own stock through expanded buybacks and a "modest" rise in shareholder dividend, predicts Piper Jaffray analyst Gene Munster. White has maintained his "buy" rating for AAPL, with a year-end price target of $777. Apple will reveal its Q2 fiscal results on April 23
, after the markets close.