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Market Update

Earnings on Tap: Apple

While Apple is expected to report a soft March quarter, its outlook will be key to its resurgence.

Apr 23, 2013

Apple (AAPL) is expected to post a drop in earnings when it announces its second-quarter results after the closing bell Tuesday. Wall Street analysts expect the company to report earnings of $10.18 per share compared with $12.30 in the same period last year.

The company is hoping to use the quarter to turn things around ahead of the new iPhone 5S and the iPad 5 product launches later this year. However, an earnings warning last week from Cirrus Logic (CRUS), one of Apple's main chip suppliers, indicates that the iPhone maker will likely report a soft March quarter. Investors will be keen to hear the company's forecast.

After a severe beating, Apple's stock is down 25% year to date and trades significantly lower than Morningstar equity analyst Brian Collelo's fair value estimate. Collelo wrote in a recent Analyst Report that the company's revenue growth could slow from 2014 onward as a result of pricing declines and an unfavorable mix toward lower-priced models.

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