Neil Hughes
Investors will likely look back on Apple's fiscal year 2013 as "a year to forget," though it will set the stage for a strong 2014, one analyst believes.
The performance of Apple's stock so far in fiscal year 2013.
Ahead of Apple's earnings report for its second quarter of fiscal 2013, Brian White of Topeka Capital Markets issued a note to investors on Tuesday in which he lowered some of his estimates. He now expects Apple to see revenue of $36.5 billion in its third quarter, down from a previous forecast of $43.3 billion, while earnings per share was also cut from $10.42 to $7.83.
White believes Apple's profit cycle likely bottomed out in its recently-concluded March quarter. But he sees the company setting the stage for a strong turnaround, the benefits of which he expects to be seen in the company's fiscal year 2014.
Apple's so-called "year to forget" will be driven by slowdown in the high-end smartphone market, which has negatively affected Apple's growth, White said. His projections call for the company to see a 1 percent decrease in earnings per share during fiscal 2013, which would be the first annual decline since fiscal 2003.
Looking forward to Apple's fiscal 2014, which will begin in October, White expects that Apple will see new growth by expanding the iPhone lineup with a new low-end model. Rumors have suggested the company is working on a low-cost model with a plastic body that could be sold without the need for a carrier contract subsidy.
White also hopes that Apple will introduce products in entirely new categories in fiscal 2014, namely a full-fledged television set and a so-called "iWatch" wrist accessory. Finally, he also expects that Apple will reach an agreement with China Mobile, the largest carrier in the world, to begin offering the iPhone.
Beyond those new growth opportunities, White believes Apple should leverage its $137.1 billion cash balance to attract investors and built a "safety net" around the stock. The analyst has been an outspoken proponent of Apple paying out a higher dividend to investors.
Despite the downward revisions in its estimates, Topeka Capital Markets has maintained a "buy" rating and 12-month price target for AAPL stock of $888 — more than twice its current trading levels.
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70 Comments
By a year to forget they mean 50 billion in net profit?
Oh boy.
So google's 10 billion profit will be better?
What about the others?
A year to forget? What are we forgetting? that the analysts had their heads too far up their arses to make accurate predictions? I don't recall anyone from Apple ever claiming that their stock would climb to $1000 a share.
Apple could use all the cash it has and borrow some more to buy Google, Licence Android in the future, make use of all the cool Google technology. The Stock at that point would climb back to 700 easily, regaining the lost market cap. Now this is pure speculation, but my comments are not a whole lot different than the Analysts reports.
Apple could use all the cash it has and borrow some more to buy Google, Licence Android in the future, make use of all the cool Google technology. The Stock at that point would climb back to 700 easily, regaining the lost market cap. Now this is pure speculation, but my comments are not a whole lot different than the Analysts reports.
You lost me at cool new Google technology.
Considering the popularity of the iPhone 5 and the iPad mini, I predict that Apple are going to surprise the analysts. Yes, Apple had supply problems with the 5 but that's only because they sold so many. There was a slight wait for the iMac and a wait for the new Mac Pro but these things aren't really their main business any more.