Apple Q2 profit predicted to fall for the first time in 10 years

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Apple is virtually unrecognizable from the company it was 10 years ago. It was on the steady way up following a shaky patch at the beginning of the century. It had the iPod, new iMacs and iTunes. It was to be 4 years before the iPhone arrived. Since then, every financial quarter has been better than the same three-month period year-on-year. It’s an incredible statistic. Every 2nd quarter for Apple has been more profitable than the same quarter the year previous, for ten years running. But that could soon change.

Cupertino’s Q2 earnings call is taking place tomorrow and Tim Cook is expected by analysts to announce a drop in profit compared to Q2 2012.

An earnings report tomorrow may show that fiscal second- quarter net income declined 18 percent to $9.53 billion, or $10.02 a share, according to analysts’ estimates compiled by Bloomberg. Revenue is projected to show a rise of 8 percent to $42.4 billion, the slowest growth rate since 2009.

It’s fair to say that Apple hasn’t had a great time on the stock market over the past 6 months. Despite announcing a record quarter for the end of 2012, investors still haven’t been keen on coughing up cash for a share in the fruit company. That trend will likely continue until Tim Cook announces a brand new, and exciting product. Rumors of defective iPhones, slowing down orders and waning demand won’t help. And according to analyst Balter, of Oracle Investments, nobody quite believes Apple has the magic touch anymore. When Steve Jobs said a new product was coming, it was fine. Not one has the same faith in Tim Cook.

What do you guys think? Does Apple’s performance on the stock market really matter? Or is fact that it keeps making billions in profit and has $140B in the bank the only thing that really counts for something?

Via: Bloomberg

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  • BillThomas

    I think they will bounce back I mean Tim cook just has to prove himself and show that he is just as capable as Steve jobs…..but they do need to rebuild iOS that would be a start..

  • BrainRoopull

    The stock markets have had a demonstrable disconnect from reality for as long as I can remember.  For example, in the 90s, they thought anything “dotcom” was worth exponentially more than it was.  Apple was never worth the insane prices they drove it to over the last few years.  The traders ballooned the prices and are now finally realizing that they may have made an error.  It’s not that Apple is worthless, it’s just worth less than these bozos thought.  I suppose the recent bought of bad reviews and frustrations from Apple addicted journalists have scared them.  These traders read whatever they can about the industry, and coverage of the industry since the launch of the iPhone had always spoken of it as if it were the only thing on the market and infallible.  Since the people writing about the industry have finally gotten fed up with Apple’s over-hyped marketing and lackluster offerings, it’s scared the traders into thinking the ship is sinking.  Instead of reading how the iPhone is magic, in a class by itself, and the only smartphone to consider, they’re reading that the OS is outdated, the specs aren’t nearly top-notch, and it doesn’t offer any of the cutting edge features of the top-end competition.  So, like a bunch of ignorant children, the traders are figuring Apple is done for.  What they’re forgetting is that the only reason Apple doesn’t have a phone that competes head to head with the S4 and One is because they have boxed themselves into the tiny iPhone format.  There’s no reason Apple can’t release a 5″ superphone that could shame everything on the market other than their own stubbornness.  If profits and revenues (the real measure of a company’s success) start to tank, Apple is fully capable of turning their lumbering ship around in a moment’s notice.  They don’t do it now because there’s no need to.  Traders don’t look only at profits and revenues because that’s like driving a car by looking in the rear view mirror… it’s a reflection of where Apple was, not where it’s going.  According to the journalists covering the industry, their current and future products are boring and out of date.  So long as that’s the case, traders will probably continue to be spooked…

  • nkathrein

    I would bet if Apple would have focused there software engineers on making iOS better in the last few years instead of trying to kick out Google software from their phones they pundits wouldn’t be looking at Apple the way they are now. First of all the phone itself it built beautifuly.  The screen is to small for me but the iPhone 5 and new HTC One are in a class by themselves so that isn’t why people are down on Apple.  They are down on the software.  Looks virtually the same since 2007.  Apple can’t do anything major when so many people are working on iMaps.  That was a cluster that only pride could have created.  Was it worth it Apple?  While Apple is working on maps they gave Google time to catch up and pass Apple on many fronts.  Apple now has the oldest OS.  It wasn’t designed to multitask like Android was. It was designed to run an app and then exit and then run another app.  Google’s Android wasn’t designed for touch screens so it lagged a lot and over the last few years have made a priority to fix that.  Apple hasn’t been able to make anything but iMaps a priority.  Example is Siri.  Have you ever seen a product on a cell phone call Beta for going on 2+ years. Do you believe they will take the beta off in iOS7?  It still doesn’t work well.  The software is why Apple cell phones are looked at by the tech press as they once did.  This years Google IO will most likely have bigger upgrades than iOS will since this year seems to be another year where they are doing cosmetic things and not major changes. It’s going to look different but work the same.  They still have a lot of people working on iMaps which limits what they can do.  Even now there are rumors that they had to take people off of osX to help finish iOS.  Looking bad for Apple right now.  How bad? We’ll have to see what Google does at Google IO.