Apple confronts the near mother of all earnings

The company reports second-quarter earnings Tuesday, with weak results expected. Guidance will be key.

By TheStreet Staff Apr 22, 2013 10:36AM

thestreet logo

The Apple Inc logo is displayed on the back of the new MacBook Pro David Paul Morris Bloomberg via Getty ImagesBy Chris Ciaccia

It's not the mother of all earnings reports, but for Apple (AAPL), it's pretty close.

Much has been made about Apple, it's recent share price underperformance and "lack of innovation." There have even been a few calls asking for CEO Tim Cook's head (TheStreet).

Sterne Agee analyst Shaw Wu cut his estimates for the March quarter, but noted that expectations for the June quarter have come down "to reflect an inventory drawdown and pause ahead of 2H refreshes. The good news is that data points appear to be hitting a bottom." Wu still rates Apple "buy" but lowered his price target to $610.

He believes Apple is likely to miss fiscal second-quarter numbers when the Cupertino, Calif. technology giant reports earnings Tuesday after the close of trading. Wu is expecting Apple to earn $10 per share on $41.3 billion. Analysts polled by Thomson Reuters are expecting an average of $10.04 per share in profit on $42.38 billion in revenue. When Apple reported its fiscal first-quarter earnings, it gave revenue guidance between $41 billion and $43 billion.

The key to this report will be guidance for the June quarter, as Apple gets ready to refresh its product lineup, with the oft-rumored iPhone 5S (TheStreet), and new iPad and iPad mini tablets. Wu cut his iPhone estimate for the June quarter to 28 million iPhones down from 30 million units, but left his iPad and Mac numbers unchanged, at 19.8 million and 4 million units, respectively.

Macs may wind up being a bright spot, due to better availability. "For Macs, our checks indicate better than seasonal demand helped by better availability and yields on the new iMac," Wu wrote.

June guidance may not be everything it's cracked up to be, given recent rumors in the marketplace about a delayed iPhone 5S. Citi analyst Glen Yeung, who rates the shares "neutral," with a $480 price target, believes the iPhone 5S could be delayed as much as two months, as Apple ramps up production. "However, any such delay raises risk to consensus expectations for 12% sequential revenue growth in 4Q13(Sep), noting that 4Q12(Sep) and 4Q11(Sep) grew at only 3% q/q and -1% q/q respectively," Yeung wrote in his report.

Yeung is expecting Apple to refresh much of its product lineup in its fiscal fourth-quarter, as it did last year. He's expecting the iPhone 5S, a new iPad mini with Retina Display and one without Retina Display, a lighter, thinner iPad 4, and a MacBook Air with Retina Display. He did note that he does not expect a larger-screen iPhone, and has not baked in a low-end iPhone (TheStreet) to his estimates, as he remains unclear on the topic.

Apple shares were higher in early market trading, up 1.67% to $397.07.

More from

Apr 22, 2013 5:47PM
LOL all the haters here.    Luxary brands get all the same flack.   "You could buy that cheaper."    Apple is a status symbol in America.     Don't tell Coach they are making something that's been around for 5000+ years.    It doesn't matter.   Brand name is what people are buying.   In good times and bad, if people WANT something they'll find the cash. 
Apr 22, 2013 2:13PM
In the year 2058, we await the latest product refreshes, iPhone48756 and iPad18747, but all wonder when a totally new product will be announced. "Perhaps by late 2085, said Apple representatives." Tim Cook IV could not be reached for comment, as usual.
Apr 22, 2013 12:57PM

iTunes won't even give my iPhone a much needed iOS software update unless i unistall my Norton's Antivirus first.  That is what Apple tech support told me. 

Apr 23, 2013 7:52AM


If a college degree or two or six were the genuine ticket to success, then why do we go to high school? Name another creature on Earth that trashes the aggressor who goes forth and makes his way, while giving the keys to the kingdom to the last one who got drunk, naked, was consumed by commercially controlled sports, gambled and had no ethics? There are NONE. In fact, if there were, those kingdoms would be long gone... like ours is about to be. You need a degree to collect garbage today and those in administration, finance, law, politics and management, CLEARLY are incompetent. We would have an economy if they were not controlling and manipulating America through alumni collusion. Yesterday... we saw the Dow drop as it should- right from the opening bell... and then we saw colluders borrow a ridiculous sum (maybe $100 billion our great great great great great grandkids have to repay) just to buy back the sold shares of the Dow. That's buying the stock of DEAD business platforms stonewalling America with hiring blockades, imported goods and use of technology for counter-productive terror-like activities. If Man began as Accountants Bankers Administrators and Politicians... "Man" would have never completed one lifetime. He would have been tender bony meat for real species on Earth. Can you imagine ANY endeavor with just those in charge at large and no workforce? THAT would define all publicly traded companies in America today. GET OUT OF THE MARKETS, FOLKS. Let these pathetic beasts die so we can all live... AGAIN.

Apr 22, 2013 1:52PM

f they would split these stocks we could get a handle on what they`re worth, instead

of just priced at $400, or $500.A price that`s hard to grasp.

Apr 22, 2013 1:40PM
Apple shot their load with the iPod and iPhone that's it for two hit wonder.
Apr 22, 2013 12:12PM
Well... not ALL eyes... maybe not even a LOT of eyes... pretty much, the only eyes watching are the fund managers who put YOUR money into Apple-- an intangible device maker who employs lots of foreign people at slave wages to bring you technology that just 10 years ago, you were paying 10 times LESS monthly to operate. The fund managers are watching because Apple is tanking and so is your retirement fund.
Apr 22, 2013 12:14PM
Notably... THEY can make up data but YOU can't make up cash in a falling economy to keep paying through the nose for counter-productivity. Which came first... you missing your goals or your attention being stolen by your i-Phone or i-Pad? Either way... you are still falling behind and that pink slip keeps getting closer.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
267 rated 2
455 rated 3
612 rated 4
682 rated 5
695 rated 6
632 rated 7
472 rated 8
279 rated 9
147 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.