Apple earnings coming this week; let the betting begin

Remember Apple’s Map Flap, when its new iPhone 5 app was erroneously sending some users, well, all over the map?

That’s sort of where the analysts are this week as they anxiously await Apple’s quarterly earnings report on Wednesday. Their estimates range far and wide, as some number-crunchers have steadily downgraded the stock over concerns of weakening demand. Others remain bullish, insisting investors have exaggerated Apple’s supply-chain hiccups.

After beating analyst estimates quarter after quarter and year after year, Apple has fallen short on three of its last five earnings announcements. And with manufacturing problems, possible weakness in iPad sales, increasing competition from its smartphone rivals, along with a slew of other complications, anticipation over the earnings report has Apple watchers on the edge of their seats.

The wide range of predictions “tells you there’s a lot of uncertainty around Apple these days,’’ said analyst Joel Achramowicz with Merriman Capital. “The markets want predictability, so Apple share have slumped over concerns about weakening demand.’’

Achramowicz said some of that uncertainty comes from the ambiguity surrounding Apple’s executive ranks, as CEO Tim Cook has yet to step out from co-founder Steve Jobs’ shadow and “put his own personal stamp on a product,’’ he said. “Which is kind of scary, because it’ll have to be something really good. And meanwhile, the competition is heating up all around him.

“This is a much different market today, especially with smartphones, than it was two years ago.’’

For months now, analysts have been lowering their estimates. Some have gone as far as predicting Apple will report a drop in profit, which would the first time that’s happened in nearly a decade. The consensus view among analysts is for a 3% year-over-year decline. But underneath that figure is a mess of numbers, with estimates ranging all the way from a nearly 14% drop in earnings to a 12% jump, according to Thomson Reuters.

So tune in here Wednesday at 2 p.m. PST and find out who got it right and who didn’t.

Patrick May Patrick May (300 Posts)

With more than 30 years on the front line of daily American journalism, I'm currently a staff writer with the San Jose Mercury News, covering Apple and writing people-centric business stories from Silicon Valley.