My entry in the "guess Apple's earnings" sweepstakes: $0.53 a share

Apple is scheduled to report earnings on Wednesday, October 18, after the close of the markets. Merrill Lynch just updated their forecast for earnings to $0.48 to $0.51 a share. My model says roughly the same. I'm predicting that Apple sold about 900,000 laptops, 750,000 desktops, and about 8.2 million iPods (sheesh, that's still a lot of iPods). Oh, and by the way, don't forget Apple's software business is now more than $1 billion all by itself. But the earnings get better because I believe Apple's continuing to improve its gross margins by another percentage point. The result: I see $0.53 a share basic earnings for the quarter and $0.51 diluted.

Now remember that there will undoubtedly be a some new adjustments to earnings this quarter because of the impact of stock options backdating, so that throws a wild card into all these estimates. But regardless of accounting shenanigans, I still see the company earning about $450 million on sales of $4.5 billion this quarter.

Of course, the real prize will be the Christmas shopping season, which Apple reports as FY07Q1. My prediction: Apple will sell about 1.7 million computers and another 18 million iPods, resulting in more than $6.5 billion in revenue. Look for earnings that quarter to be up nearly 17% over last year to $627 million or $0.74 a share (actually a little more due to fewer shares outstanding).

So that's my opinion. What's yours? Vote below in our "Guess Apple's earnings" quiz.

Full disclosure: I do own some Apple shares.

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