Ahead of the Bell: Low Expectations for Apple's 3Q
CUPERTINO, Calif. (AP) — Apple's latest quarterly report is expected to show the company has been growing at its slowest pace since the debut of the iPhone six years ago.
The numbers, due out Tuesday after the stock market closes, are likely to reinforce investor perception that Apple Inc. is dire need of another breakthrough gadget along the lines of the iPhone and iPad.
As things stand now, consumers increasingly are bypassing Apple products as smartphones and tablet computers running Google's Android software win more fans. Even people who remain Apple fans have been buying the company's lower-priced iPhones and iPads instead of the top-of-the-line models, a phenomenon that has been squeezing profits.
If analysts' forecasts pan out, Apple will show little or no revenue growth for its fiscal third quarter, a three-month stretch ending in June. The Cupertino, Calif., company has suffered such stagnation since the iPhone came out in 2007. Apple's earnings are also expected to decline from the same last, marking the second straight quarter of erosion after a decade of steadily rising profits.
The lackluster performance has already largely been factored into Apple's stock price, which has fallen by nearly 40 percent from its peak of $705.07 reached last September when the latest model of the iPhone came out. The shares closed at $426.31 Monday.
Analysts, on average, are predicting Apple will earn $7.31 per share on revenue of $35 billion during the quarter, according to the latest figures compiled by FactSet. That compares with earnings of $9.32 per share on revenue of $35 billion at the same time last year.