This post was updated on April 20.
Apple reported earnings of $6.40 a share on revenues of $24.7 billion for the three months ended March 31. Strong iPhone and Mac sales helped push earnings well ahead of consensus estimates, offsetting iPad sales that at 4.7 million were significantly below expectations, although one analyst had it pegged pretty well. Apple's stock (AAPL) reacted well to the report, rising about 2.5 percent immediately after.
The following was posted on April 19.
When Apple releases quarterly earnings after the market closes Wednesday, it will be amid a distinctly different backdrop from the one that has accompanied earnings announcements in past quarters. Apple, its stock and the story of strong, never-ending growth that shareholders have bought into are engendering widespread doubts.
As noted in a recent post, the market share of the iPhone and other mobile devices using Apple's operating system is stagnating, one key factor that had led commentators, including longtime supporters of the company and its stock, to wonder whether Apple is generating a lot of buzz and not much sting. Then there is the Nasdaq 100 rebalancing, in which Apple will be the biggest loser by far.
Doubts about Apple - expressed in writing and in trading - are proliferating, but opinion remains conspicuously frothy among the analysts at Wall Street firms that guide mainstream investor opinion. The consensus estimate for Apple's second-quarter earnings (Apple's fiscal year runs October through September) is $5.39 a share, a stupendous 62 percent higher than the same quarter a year ago.
That leaves plenty of scope for disappointment, and as Google's results last Thursday show, investors are in no mood to be disappointed. Google's earnings came in at $8.08 a share, all of 2 cents less than expected, and the stock (GOOG) dropped more than 8 percent the next day.
The negative comments being made about Apple and the recent mediocre performance of the stock, combined with persistently high earnings forecasts, suggest that Apple is especially vulnerable to bad news - even if it's not really bad. A less-than-stellar result Wednesday could inflame investors' fears that Apple is losing its mojo.