Morgan Stanley Suggests iMac Shortfall In Current Quarter: Other Analysts Defend Apple [Updated]

by , 2:30 PM EDT, May 31st, 2002

[Editor's Note: This article has been updated with information from Salomon Smith Barney, and information from a story on production in Asia.]

[Updated 1:30 PM] Briefing.com is reporting that Wall Street firm Morgan Stanley is seeing a shortfall from Apple for iMac shipments this quarter. According to this report, which is little more than rumor as of this writing, the company will sell some 65,000 fewer iMacs during the current quarter than consensus estimates from Wall Street had expected. The Briefing.com report:

Hearing from sources that Morgan Stanley is out with a cautious call on stock this morning. Firm is estimating that Apple will ship about 235,000 iMac units this [quarter versus] Street consensus of roughly 300,000.

Since Briefing.com's report first broke, Salomon Smith Barney has issued a statement in defense of Apple. From Breifing.com (note that this link is subject to change by Briefing.com).:

Salomon Smith Barney is defending AAPL against a rumor that they will miss the 300k iMac Street forecast (10:27); firm does not know where the 300k forecast comes from, and believes the [company] is tracking towards 225k-250k units for the [quarter] (although that is still below firm's [estimate] of 265k).

Offering yet another view on this, a story originating out of Taiwan claims that Quanta will ship as many as 350,000 iMacs to Apple this quarter (see our full story for more information). That far exceeds the number of iMacs that Wall Street is expecting from Apple.

Apple does not typically offer specific unit estimates in advance, and has also been offering very conservative guidance during its quarterly conference calls. During the last conference call (see our live coverage or our analysis of the call for more information), however, Apple CFO Fred Anderson said that Apple could likely sustain production of iMacs in the 4,000 to 5,000 per day range.

Earlier this week, AsiaBizTech reported that Apple was shifting production of the iMac from Quanta Computing to Hon Hai Precision Industry. According to that report, Hon Hai Precision Industry was unable to supply Quanta with sufficient quantities of iMac components for which Hon Hai Precision owned patents.

In other leaked news from

Apple spokespersons were not available for immediate comment.

The company has not issued a warning or lowered guidance, something about which Apple has typically been very responsible. If the company is going to offer a warning, it would be after the stock markets' closing bell. During the most recent quarterly conference call, Apple CFO Fred Anderson said that guidance for US$1.6 billion in sales was conservative.

Since the end of April, Mr. Anderson, along with other Apple executives have been selling some of their AAPL holdings. TMO has been following those stock sales since early May. Apple has so far declined to answer TMO's requests for information on these sales, but the company did issue a statement to the San Jose Mercury News. In that statement, Apple CEO Steve Jobs said:

"A major part of Apple's senior management compensation is based on stock options. It's great to see some members of our management team get rewarded for their incredibly hard work by selling a bit of their stock."

As of press time, Apple's stock is trading at 24.09, down 0.11 (-0.45%), on moderate volume.

If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.