Apple earnings preview; iPhone refresh in the Spring?

Citigroup analyst Richard Gardner suggested that an earlier-than-usual iPhone refresh could come as early as April, based on checks of channel inventories. Some critics wondered if the company's lack of a whiz-bang announcement at Macworld was because something bigger was in the works for a later announcement to be scheduled by Apple, not a trade show.

Certainly, there would be no trouble in generating some buzz around such an announcement, especially if it was related to an upgrade of the mighty iPhone. If nothing else, the rumor mill would spark to life with guesses about which features will be announced. Gotta love that publicity.

In a report released this week, Gardner reduced EPS estimates for FY09, FY10 and FY11 "to reflect a more conservative view of consumer spending." As a preview to the first quarter earnings call that will take place next week, Gardner wrote:

We expect management to guide 1CQ09 revenue and EPS well below consensus. We expect revenue guidance of $7-8B, gross margin guidance of 30-31% and EPS guidance of $0.65-0.95 versus consensus revenue and EPS of $8.3B and $1.13. While this guidance strikes us as conservative, we also believe that current consensus estimates are too aggressive. Our own March quarter estimates of $7.5B and $1.05 are between what we expect from management guidance and the current sell side consensus.

On the upside, Gardner said that EPS should be several pennies above the $1.39 consensus "due to solid revenue performance coupled with better-than-expected gross margin," which should be around 32-33 percent.