Apple analyst lowers estimates, shares fall

Correction, 11:06 a.m. PST: This story initially misstated the day the report was released. It was Friday.

Update at 10:31 a.m. PST, with more information from the analyst report and a chart.

A J.P. Morgan analyst cut his financial estimates for Apple's fiscal second quarter and fiscal 2009 on Friday, pointing to expectations that its iPhone and Mac sales may be weaker than previously anticipated.

Apple fell as low as 7.3 percent in early morning trading Friday to $82.33 a share.

"We are lowering our estimates for the March quarter and beyond," Mark Moskowitz, a J.P. Morgan analyst, said in his research note. "The deepening global downturn is a driver."

Moskowitz lowered his quarterly earnings estimates to $1.01 a share from his previous estimates of $1.02 a share. And he dropped his quarterly revenue estimates to $7.62 billion from $7.72 billion.

And for fiscal 2009, Moskowitz cut his earnings estimates to $4.73 a share from $4.82 a share, and dropped his revenue projections to $32.98 billion from $33.97 billion.

In light of the weakening economy, Moskowitz also cut his estimates for Mac unit shipments to 2.19 million in the fiscal second quarter, down from his previous estimates of 2.39 million.

iPhone unit shipment estimates were also lowered to 3.4 million in the fiscal second quarter from Moskowitz's previous projections of 3.8 million.

"While a lot remains to the March quarter, inputs from our primary research contacts suggest that Mac and iPhone volumes had been trending below our prior expectations," Moskowitz noted in his research note.

Here's a look at Moskowitz's revised estimates for Apple's revenue, unit shipments per category, profit margins and earnings for the fiscal second quarter and fiscal year 2009:

In further elaborating on Apple's product line, Moskowitz notes in his report:

We acknowledge that there could be a channel fill benefit over the next 30-45 days related to the Mac refresh. While this is still a potential, we do not expect any fill period to fully counter the bigger issue of weakening PC demand in general. Apple's desktop line had been the last to be updated, so we think the company could partially offset the weakening demand environment for desktop PCs with potential buzz around new features and price points.

Looking ahead, we expect investors to key in on the iPhone new product funnel. with the Mac refresh out of the way and summer approaching, it is our view that investors expect a June launch of the next iPhone. We expect Apple to follow the iPod expansionary course with the iPhone over time. In other words, refresh the original form factor in the first two years or so and then introduce newer form factors. While only conjecture on our part, we expect the next iPhone addition to be a smartphone but one with a smaller footprint. We do not expect too much fluctuation in the feature set or pricing, though.

The analyst also cut his price target on Apple's stock, predicting it will hit $100 a share by the December period, versus his earlier prediction of $102 a share.