Seth Fiegerman2013-04-23 14:03:00 UTCEvery earnings report from Apple is viewed as a market moving event, but even by that standard, today's report is huge.
For months, Apple's perception on Wall Street and Main Street has been tarnished by software blunders, supply constraint rumors, executive shakeups, increasing competition from Samsung and Google, and a growing concern that it might not have another breakthrough product in the pipeline.
It has now been more than half a year since Apple held a major launch event for a new product — the iPad Mini in October. Speculation about the company's decline has come to fill that void.
It has now been more than half a year since Apple held a major launch event for a new product — the iPad Mini in October. Speculation about the company's decline has come to fill that void.
It may not be a product launch, but the earnings report offers Apple a chance to pour cold water on some of these concerns, or at least provide some context. The consensus estimate among analysts is that Apple will report sales of just more than 35 million iPhones and about 18 million iPads for the March quarter, with some preparing for disappointing numbers based on recent earnings releases from Apple's supply and manufacturing partners.
Even with all the doomsday talk about the company, analysts are still expecting Apple to report revenue of $42.6 billion for the quarter, which would be a new record for sales in the second quarter. The bigger question, at least for investors, is what happens to Apple's profits for the quarter. Analysts expect that Apple will reporter earnings per share of $10.07, compared to earnings per share of $12.30 in the same quarter a year ago. If that happens, this would represent the first time Apple's profits per share have declined year-over-year in a decade.
AAPL data by YCharts
Apple's stock hit an intraday trading high of $705 a share in late September on the day that the iPhone 5 was released and has since plummeted below $400, effectively erasing all of the gains that it made in 2012. As a result, Apple is no longer the most valuable company in the world, having lost that title to ExxonMobil.
In early trading Tuesday, the stock was hovering right around the $400 line. This report and call will likely determine whether Apple finally starts climbing back up towards $500, or continues to collapse further into the $300-range.
The report will come out shortly after the market closes at 4pm ET and the earnings call will take place at 5pm.
Image via Getty, Kevork Djansezian
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