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Morgan Stanley Previews Apple Heading Into Q2 Earnings

Eric Niederer

In a report issued July 18, Morgan Stanley analyst Katy Huberty provided an optimistic view on Apple (NASDAQ: AAPL) heading into the company's second-quarter earnings report scheduled for July 22 after the market close.

Huberty is expecting Apple's results to come in at the high-end of its guidance, based on Morgan Stanley's AlphaWise Smartphone Tracker that indicates 39 million iPhone units for the quarter.

The results of the AlphaWise Tracker have caused Huberty to raise her estimates on revenue and gross margin to $37.9 billion and 37.9 percent, respectively, moving her EPS estimate from $1.18 to $1.24.

Looking ahead, Huberty has also raised her calendar-year 2015 EPS to 11 percent above the consensus. This is based on her bullish view on the iWatch. Huberty is looking for 30 to 60 million units sales within the first 12 months.

"Improving PC and server demand, constructive data points from our channel checks, and a more favorable FX environment point to a better setup for enterprise names. However, our favorite name into next week's earnings remains Apple due to 2H14 product catalysts," Huberty wrote.

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