Apple Inc. (NASDAQ:AAPL) will release its third fiscal quarter results tomorrow, and Topeka Capital analyst Brian J. White has lowered his estimates for the company. However, he believes investors should not “place too much weight on near-term results” because they believe there will be an important new product cycle beginning in the next year to year-and-a-half.


Maintaining iPhone forecast, lowering iPad, Mac forecasts

In a research note issued to investors, White said he lowered his revenue projection for the company to $35.28 billion from $36.52 billion. That’s compared to the Wall Street consensus of $35.02 billion. He also trimmed his earnings per share projection to $7.37 from $7.45. That’s compared to the Wall Street consensus of $7.22 per share. Apple Inc. (NASDAQ:AAPL)’s guidance put sales for the quarter between $33.5 billion and $35.5 billion.

Apple Inc. (NASDAQ:AAPL)’s iPhone estimates are the one area analysts are especially unsure of, but White didn’t change his iPhone estimate. He left it at 28 million iPhone units for the quarter. His revenue reductions came at the expense of iPad and Mac projections. He lowered his iPad forecast to 14.5 million from 15.9 million and his Mac forecast to 3.8 million from 4.2 million.

Apple’s 4Q to remain soft

Like a few other analysts, White lowered his iPhone estimates for Apple Inc. (NASDAQ:AAPL)’s fourth fiscal quarter. He noted the “soft macro environment, muted iPad trends and uncertainty around the exact impact of new iPhone launches” during the quarter.

The Topeka Capital analyst cut his September quarter iPhone and iPad estimates. He reduced his fourth fiscal quarter revenue estimate for Apple to $33.88 billion from $43.88 billion and his earnings per share estimate to $7.02 from $10.16 per share. He said the company has seen a boost from the China’s ramp in 3G subscribers, although it could face a headwind in the September quarter because China’s economy has downshifted.

Apple heading toward a “sustainable stock recovery”

White said they continue to see an $888 per share price target for Apple Inc. (NASDAQ:AAPL) over the next 12 months. He believes the company will hit three important phases that are essential to the recovery of the company’s stock. The first phase is distribution of cash, which the company already announced in April.

The second phase is a bottom in the product cycle, which White is expecting to see in the third fiscal quarter. The third phase is opening up some new growth opportunities, like launching a low-cost iPhone, an iTV, an iWatch or forging some kind of deal with China Mobile. White sees this phase happening in the next 12 to 18 months.