John Paczkowski

Recent Posts by John Paczkowski

Serious Qualms Over Apple’s Q2

loweredexpectationsWhen Apple posts second-quarter earnings today, don’t expect a blowout. Wall Street certainly doesn’t.

The eager anticipation that once preceded Apple’s quarterly earnings reports has turned to apprehension, following a steep plunge in the company’s stock price over the past seven months. And the question troubling many minds today is not whether Apple will exceed analyst expectations, but if it will even manage to exceed its own.

Since reaching an all-time high of $702.10 last September, Apple’s stock has charted a precipitous decline, one that sheared about $280 billion off the company’s market capitalization. The last time Apple shares were trading this low, co-founder Steve Jobs had just passed away and investors were wondering if the company might lose its way without him.

In other words, no one is expecting champagne corks to pop when Apple posts its latest financials after market close today. In the past month alone, 14 analysts have cut their estimates for Apple. And many are saying the company is on track to report its first decline in profit in 10 years.

So, what’s the consensus?

Analysts expect Apple’s second-quarter net income to come in at $9.53 billion, or $10.02 a share — a year-over-year decline of 18 percent. If they’re right, it will be the first time Apple’s quarterly results has fallen in a decade. On the revenue side, they’re looking for a mere 8 percent increase to $42.4 billion — Apple’s weakest showing since 2009. This despite record sales of both the iPhone and the iPad (36.4 million units and 18 million units, respectively).

That’s a tough quarter. But it’s roughly in line with the one that Apple predicted back in January. When the company last reported earnings, it offered a range of guidance that it said reflected a “belief” of what it was likely to achieve: Earnings of between $9.23 and $10.23 per share on sales of $41 billion to $43 billion.

We’ll find out where exactly Apple’s financials fall in that range today after the bell.


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