Apple earnings expected to be lackluster


The Apple logo sign on the San Francisco Apple store was turned off in memory of the late Steve Jobs on Oct. 6, 2011, in San Francisco. (Kevork Djansezian/GETTY IMAGES)
July 23, 2013

Apple is set to report earnings Tuesday, giving investors some hard numbers on a difficult quarter for the company in the court of public opinion.

According to a survey from Thomson Finance, analysts expect the tech firm to report earnings of $7.32 per share and revenue of $35.01 billion, a drop from the $43.6 billion in sales the company reported in April. The lowball predictions underscore the perception that the company is hitting a slow patch and that growth has stagnated to the point that the numbers line up closely with Apple’s performance in the same period last year — earnings of $9.32 per share on revenue of $35.02 billion.

Apple has been struggling to deflate recent criticism that it has lost its innovative touch. Senior vice president of marketing Phil Schiller gave a salty defense of Apple’s ability to lead the industry during the company’s developers conference in June.

Sales of iPhones and iPads are rising, but the company is seeing a greater mix of old and new models among its customers that cut into Apple’s profit margins. Meanwhile, firms building devices that run on Google’s Android operating system are luring new smartphone and tablet users as the market for these devices expands.

But Apple’s biggest challenge may be maintaining its reputation as a cutting-edge phenom. The company has given few indications about what it has planned for the future. Although it has shown off features of its new mobile and desktop operating systems, as well as new plans for iTunes radio — all of which are due out in the fall — Apple has offered only bare hints about what’s next in the hardware space.

The Wall Street Journal reported this week that Apple is testing iPhones and iPads with bigger screens, as a way to appeal to a wider variety of customers. Speculation about Apple plans to change screen sizes have been circulating for quite some time, and the company bumped up the screen size on the iPhone 5. But chief executive Tim Cook has been very careful to note that Apple has put a lot of thought into the screen sizes it offers right now, and is taking its time analyzing what may be the best screen size for the future.

As for new products, Cook said at May’s All Things Digital Conference that the wrist is “interesting,” prompting predictions that the company will jump into the tech wearables market with a smart watch.

But as far as concrete road-mapping, Cook has said only that the company has plans for late 2013 and 2014. The lack of guidance on product plans will be on the minds of analysts during the call with Apple executives that will follow Tuesday’s earnings announcement.

But Apple fans shouldn’t hold their breath for any major product news. If history is a guide, Apple won’t be revealing much about future changes or devices during the call.

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Hayley Tsukayama covers consumer technology for The Washington Post.
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