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Morgan Stanley adjusts its Apple numbers – up and down

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Philip Elmer-DeWitt
Philip Elmer-DeWitt
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By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
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April 11, 2013, 8:31 AM ET
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FORTUNE — Like many Wall Street analysts who follow Apple (AAPL), Morgan Stanley’s Katy Huberty likes to issue estimates for the current quarter the day after the company reports the previous quarter’s results — and then stick with those numbers for the next three months.

But on Thursday — two weeks before the company is scheduled to report its earnings for fiscal Q2 2013 —  the dependably conservative analyst broke from tradition and revised her Apple estimates.

The biggest change: Citing “supply chain data points,” she lowered her iPhone estimate by 4 million units (11%) and raised her iPad number by 3 million (also 11%, but in the opposite direction).

Her revised iPad number (21 million) is now one of the highest on the Street and her iPhone estimate (33 million) one of the lowest.

She also trimmed her Mac sales and  gross margin numbers, which brought her top line (revenue) down 4% to $41.4 billion and her bottom line (EPS) down 5% to 9,59. Her new price target is $600, down from $630.

Huberty added that she expects Apple to:

  • Roughly double its annual cash return to $25-30 billion, partly by increasing dividend yield to over 3% (from 2.5%) and the rest through buybacks.
  • Improve Apple’s existing Internet-based services, such as iCloud and Maps, and launch new ones, such as music streaming and perhaps mobile payments (“a killer app,” in her words).
  • Release new iPhones some time after June, including an updated iPhone 5 and a lower-priced iPhone for emerging markets.
  • Release a new iPad, also after June.
  • Announce new carrier partnerships with NTT Docomo and China Mobile, in the second half of 2013 or 2014.

Among the 60 or so analysts we’ve polled for our quarterly Earnings Smackdown, a dozen are still using their January estimates.

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