Apple reports its earnings today after the end of the trading day, and it’s kind of a big deal. The stock has been in a swoon for months. Analysts and investors fear that the magic has gone out, that the iPhone isn’t selling as well as it used to. If Apple comes out with a huge quarter and blows away Wall Street expectations, investors will go nuts and the stock will soar. If it doesn’t, this means more than just a bad quarter — it means that Apple is in very deep trouble, that the company has peaked and now is in decline.
So that’s why everyone is on the edge of their seats. The hottest company in the world, the company with the biggest market value of any company in any industry, ever, is at a crossroads.
Meanwhile, Google, which is probably Apple’s biggest rival, last night turned in better-than-expected results.
The Numbers
In case you’re keeping score at home, here are the numbers. Apple has guided analysts to expect $52 billion in revenues, net income of $11 billion, and earnings per share of $11.75.
Wall Street, aware that Apple always sandbags its numbers so that it can engineer a blow-out, is expecting higher numbers: $54.7 billion in revenues and $13.41 in earnings.
The stock got rocked recently when the Wall Street Journal reported Apple had been cutting orders for components. Those reports were immediately called into question by pro-Apple fanbloggers who suspected it was all just a ruse by stock manipulators who wanted to drive down the price and scoop up shares cheap before the big earnings announcement sends the stock soaring again.
Then came news that most of Verizon’s sales last quarter were iPhones – but this news was tempered by news that a lot of the iPhones sold were not the high-margin iPhone 5 but rather the less expensive models.
No Consensus
Basically, nobody knows what to think. Zacks Equity Research says Apple is “likely to beat” expectations. Bloomberg says Apple may deliver its first earnings drop in a decade. Bloomberg also says it’s all about iPhone 5. The Motley Fool says “nobody wants the iPad anymore.” Investor Doug Kass is shorting Apple shares and predicting doom. TheStreet.com calls this “the mother of all earnings reports.” SeekingAlpha says the Street is getting more confident and that the “whisper number” (what analysts secretly are expecting) has been trending up. John Paczkowski of AllThingsD says “Apple needs an old-school beat” to reassure investors.
Make some popcorn and stay tuned. If you’re an Apple watcher, today is a very big day.
Image courtesy of Reuters.
