Apple Set to Beat Q2 Projections, Product Shortages Ending

Several financial analysts have issued earnings previews for Apple, which reports its June quarter figures on July 20, and all expect the firm to beat its own projections as well as the Wall Street consensus. Among the findings, they note that the iPad’s success is not coming at the expense of Mac sales.

Gleacher & Co. analyst Brian Marshall puts June 2010 estimates at $14.5 billion and earnings per share at $3.24. Piper Jaffrey’s Gene Munster puts the firm at $15.6 billion and EPS of $2.99, while Maynard Um of UBS projects $14.8 billion in sales and EPS of $3.01. Marshall’s revenue number is lower because he pushed sales of more than one million units of iPhone sales into the third quarter of the year due to an initial product shortage. Apple sold 1.7 million iPhone 4sin the first three days of availability.

For its part, Apple (NASDAQ: AAPL) has projected revenue in the range of about $13.0 billion to $13.4 billion and diluted earnings per share in the range of about $2.28 to $2.39. A consensus estimate from analysts by Thomson Reuters puts Apple at $14.5 billion and EPS of $3.06.

As good as Q2 is shaping up to be, the third quarter could be a real tipping point because the analysts expect iPad and iPhone 4 shortages to clear up by then. The impressive iPad and iPhone 4 sales have actually been hamstrung by pronounced parts shortages limiting product availability and even bigger sales.

With both the iPad and iPhone finding greater business acceptance, an improvement in product availability can only be good news for firms wishing to deploy and develop apps on the devices. Analysts believe Apple could sell as many as five million iPads and 14 million iPhone 4s by the end of this year, if it can get them made.

“Looking ahead, we believe management will again be conservative with the outlook, but expect continued ramp of the iPhone 4 and benefits from back-to-school spending to drive continued momentum,” Um wrote in his report.

The analysts note that even as Apple struggles to make enough iPads and iPhone 4s to meet demand, it’s selling plenty of MacBooks and those have much bigger profit margins. All three analysts cite data from NPD Direct, which estimates Apple will sell 3.1 to 3.2 million Macs in the June quarter, owing to new product introductions in April, international sales growth and preparation for back to school in September.

Will the Mac be cannibalized by other Apple products?

The iPad is already at the three million sold markand is expected to ship a total of 3.3 million units for the quarter, despite constant shortages and product constraint. So far, it does not seem to be hurting the MacBook. From the May NPD data, it appears that the iPad has a minimal cannibalization impact on Mac sales, and could be slightly cannibalizing iPod sales,” wrote Munster in his research report.

“We believe in the long run, Mac cannibalization will exist, but will be minimal. Apple has successfully limited the iPad functionality to primarily content consumption, vs. content creation on a Mac. And relative to the iPod, the physical size of an iPad provides a meaningfully different value proposition,” he added.

The device most at risk is the iPod, already under pressure since it has reached market saturation. The iPhone has iPod capabilities, and now there’s the iPad that also has iPod capabilities. iPod sales are projected to be between nine and 10 million units in the second quarter.

“The iPhone/iPad has successfully integrated the functionality of an iPod into a sleek smartphone/media player and has effectively rendered a significant portion of the iPod product family obsolete,” Marshall wrote in his report. “Ever since the June ’07 introduction of the iPhone and the April ’10 introduction of the iPad, there has been a marked deceleration of unit sales of iPods on a year-to-year basis.”

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.