Apple’s Earnings Expected to Slip — Or Not

tim-cook

CEO Tim Cook is facing rising costs, competition from Samsung and slowing growth in smartphones

Apple CEO Tim Cook is feeling the heat.

Eighteen months after taking over from Steve Jobs, Cook is facing rising production costs, competition from Samsung Electronics and slowing growth in smartphones, threatening profits for the world’s most valuable company.

An earnings report Wednesday may show that fiscal first-quarter net income slipped 2 percent to $12.8 billion, or $13.48 a share, according to analysts’ estimates compiled by Bloomberg. In all except one quarter since 2003, profit has jumped more than 10 percent. Analysts project sales will rise 18 percent to $54.8 billion, the slowest growth rate since 2009.

Apple’s shares have dropped almost 30 percent since September, erasing about $190 billion in market value, on concern that demand for iPhones and iPads is ebbing. Cook, 52, overhauled most of the company’s product line ahead of the holiday shopping season, and results for the period will show for the first time whether the effort paid off.

“Sentiment could not be worse,” said Peter Karazeris, an analyst at Thrivent Financial for Lutherans, which owned about 647,000 Apple shares as of September.

“It does take something fundamental to turn that, and we’ll see if they can deliver,” he said.

Apple often reports results that surpass even the most optimistic projections and could do so again Wednesday.

Bloomberg News

 

Tagged:
About the Author

News content on AppleMagazine.com is produced by our editorial team and complements more in-depth editorials which you’ll find as part of our weekly publication. AppleMagazine.com provides a comprehensive daily reading experience, offering a wide view of the consumer technology landscape to ensure you're always in the know. Check back every weekday for more.

Editorial Team | Masthead – AppleMagazine Digital Publication