CF Apple Computer

Apple Inc.’s fourth quarter results came with a dose of caution given the economic uncertainty it faces, but analysts remain optimistic based on the company’s solid market position, particularly given impressive iPhone shipments of 6.9 million. Earnings guidance for the first quarter came in below Apple’s typically conservative outlook at US$1.06-US$1.35 per share, well below the Street at US$1.67.

Revenue in the range of US$9-billion to US$10-billion compared to the Street at US$10.7-billion, with both factoring in a possible Christmas slowdown. ‘њWe appreciate the reset to expectations and continue to believe that the company’s model ultimately will weather the macro storm better than most of its peers,’ќ JPMorgan analyst Mark Moskowitz told clients. He maintained an ‘њoverweight’ќ rating on the stock.

‘њWe still believe that Apple’s market share momentum in Macs, iPods, and iPhones could help the company weather the macro storm better than most of its peers in coming quarters,’ќ Mike Abramsky at RBC Capital Markets said in a research note. He maintained a ‘њsector perform’ќ rating on Apple but cut his price target from US$140 to US$125.

Despite the fact that Apple’s valuation has corrected to 18 times forward 12-month price-to-earnings and it continues to have strong fundamentals, challenges like disappointing guidance, lower visibility, declining gross margins and the chance of slowing Mac and iPod growth have increased, Mr. Abramsky said. As a result, he expects the shares will remain range-bound and volatile until growth and margin trends become clearer to investors. Mr.