Apple's earnings predicted to shrink 14% in first half of 2013, but grow 15% to close the year

Posted:
in AAPL Investors edited January 2014
Noted AAPL bull Gene Munster has softened his outlook for the company through the first half of 2013, though he expects that Apple will rebound and return to growth to close out the year.

Munster


The Piper Jaffray analyst issued a note to investors on Tuesday in which he reiterated his overweight rating and $767 price target, but said he expects Apple to see earnings dip 14 percent in the first half of 2013.

For the back half of the year, he expects Apple to have several new product launches in the works. He believes those announcements will reaccelerate earnings growth to a positive 15 percent.

Even if Apple does hold an event to announce a new iPad in April, as some rumors have suggested, Munster doesn't believe it would have a material impact on AAPL shares. Munster had previously expected an April event, but now says with the month fast approaching and no recent rumors or indications, he expects Apple to not make any announcements until its annual Worldwide Developers Conference in June.

Things are predicted begin to turn around at the end of June, when Munster expects Apple will announce its next-generation iPhone. He also expects a new low-cost iPhone to debut in September.

He also believes that Apple will announce a television set in the December quarter this year, and will also introduce a smart watch at some point in the future. While neither of these products are expected to have a significant effect on Apple's bottom line, he believes they would help to convince investors that Apple is a company that will continue to innovate after the loss of co-founder Steve Jobs.

As for the company's soon-to-conclude March quarter, Munster predicts that Apple will earn $41.4 billion in revenue, below Wall Street expectations of $42.8 billion but within Apple's guidance of $41 billion to $43 billion.

Munster


His numbers call for Apple to sell 35.5 million iPhones in the March quarter, lower than Wall Street expectations. His Mac prediction of 3.8 million units is also below the Street's 4.2 million. Munster has also forecast lower margins (38 percent) than the STreet (39 to 40 percent).

The analyst does, however, expect Apple to increase its annual dividend from $10.60 to $14, based on using cash generated only in the U.S. He does not expect Apple to announce an increased share buyback program.
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Comments

  • Reply 1 of 59
    jragostajragosta Posts: 10,473member
    Noted AAPL bull Gene Munster who has never been even partially accurate in any of his previous predictions about Apple has softened his outlook for the company through the first half of 2013, though he expects that Apple will rebound and return to growth to close out the year..

    There. I fixed that for you.
  • Reply 2 of 59
    richlrichl Posts: 2,213member


    There was an interesting (and very opinionated) piece on The Register yesterday about why Apple's stock tanked.


     


    I have a little more faith in Tim Cook's frugality than the author but it's worth a read as a counterpoint to the usual analysis on AI.

  • Reply 3 of 59
    rabbit_coachrabbit_coach Posts: 1,114member

    Quote:

    Originally Posted by RichL View Post


    There was an interesting (and very opinionated) piece on The Register yesterday about why Apple's stock tanked.


     


    I have a little more faith in Tim Cook's frugality than the author but it's worth a read as a counterpoint to the usual analysis on AI.



    So one of those stupid analysts was for once right about AAPL's short-term future and now he thinks he knows it all.


     


    Strangely I still don't give a penny for his opinion.


     


    And as for TC, I think he is doing a brilliant job. Nothing to complain there. Nothing at all.

  • Reply 4 of 59
    jungmarkjungmark Posts: 6,643member
    More FUD. Seems like its a 24/7 business.
  • Reply 5 of 59
    lilgto64lilgto64 Posts: 1,147member
    I think the only reason these so called analysts are making any predictions about Apple at all is because when they don't do so they don't get their names in the media.
  • Reply 6 of 59
    echosonicechosonic Posts: 448member
    I sont know if i have ever read a smarmier author. Wont read him again though.
  • Reply 7 of 59
    monstrositymonstrosity Posts: 2,190member

    Quote:

    Originally Posted by RichL View Post


    There was an interesting (and very opinionated) piece on The Register yesterday about why Apple's stock tanked.


     


    I have a little more faith in Tim Cook's frugality than the author but it's worth a read as a counterpoint to the usual analysis on AI.



    The Register is a tech rag for extreme morons. Don't read it, it makes people say silly things.

  • Reply 8 of 59
    Thats is why they are called anal-yeast!
  • Reply 9 of 59

    Quote:

    Originally Posted by lilgto64 View Post



    I think the only reason these so called analysts are making any predictions about Apple at all is because when they don't do so they don't get their names in the media.


    I couldn't agree more.  I am tired of the daily "predictions" these morons dream up.

  • Reply 10 of 59
    monstrositymonstrosity Posts: 2,190member


    I don't know why you guys are so harsh on Gene Munster, he is one of the few analysts that doesn't appear to deliberately play the markets.


    Yet you seem to revere some of the other assholes who transparently do.

  • Reply 11 of 59
    pedromartinspedromartins Posts: 1,333member


    I'm sorry,


     


    I only see revenue (YoY) growth on that graph. Where's the decline?

  • Reply 12 of 59

    Quote:

    Originally Posted by RichL View Post


    There was an interesting (and very opinionated) piece on The Register yesterday about why Apple's stock tanked.


     


    I have a little more faith in Tim Cook's frugality than the author but it's worth a read as a counterpoint to the usual analysis on AI.



    Absolute crapola.


     


    I stopped reading at "...just shy of $800..." (look up AAPL's all-time high to see what I mean).


     


    Tells me all I need to know about the rest of the piece.

  • Reply 13 of 59
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by monstrosity View Post


    The Register is a tech rag for extreme morons. Don't read it, it makes people say silly things.



     


    I disagree. Their news coverage is generally low-quality link bait but some of the guest articles and longer pieces are wonderful.

  • Reply 14 of 59
    palominepalomine Posts: 361member
    When it comes to the big three financial rags, Fortune, Forbes and Barron's, ther has scarcely been a single mildly positive article regarding Apple in the last year. Oh, throw in the New York Times. I realize they all get click bait revenue, but that doesn't explain everything because any article with Apple in it will get clicked on.

    No, it's almost as if somebody is paying them to run these negative articles. They make Apple sound like a Disaster, when, if they did nothing for the next three years they would still be among the top cash holders in the world.

    So, who is paying these publications? Methinks Samsung is spending an awful lot on 'advertising'...Google?

    I realize that Fortune Forbes and Barron's cannot survive without this injection of money. All of Publishing is in some trouble especially the periodicals. Too bad they have to stoop to Yellow Journalism indeed.

    What's a good way to prove it?
  • Reply 15 of 59
    rabbit_coachrabbit_coach Posts: 1,114member

    Quote:

    Originally Posted by RichL View Post


     


    I disagree. Their news coverage is generally low-quality link bait but some of the guest articles and longer pieces are wonderful.



    Yeah particularly the article you mentioned earlier is so...  so... so.. Oh! It's pure poetry! A real masterpiece.


     


    Do I have to put a /s tag there?

  • Reply 16 of 59
    enatureenature Posts: 77member


    Don't you guys think that some of you here on AI are getting so emotionally attached to AAPL that you disregard any critique whether valid or not? As you may note I have been on this forum for 8 years, and for the most part being an avid Apple fun and perennial AAPL bull. But things started to look fragile to me sometime in the mid 2012. After iPhone 5 came out, it confirmed my worst fears: AAPL is going to slide down and down. I tried to argue my position here and suggested to sell the stock while it was still high relative to today's value but... some of my posts were simply blocked by administrators. Look, I know what FUD is. In early days of AAPL bullish run, there was plenty of FUD and I just disregarded it. And I am not saying here that Gene Munster is right here... no, he should have turned bearish last year. What I am saying is that your suspicions of FUD, can make you believe that any negative talk about AAPL at any time is just FUD. Well, you guys will keep losing money with such an attitude. I think AAPL slide will continue till it hits $300s unless I see some drastic changes in Apple management and its product line. When Philip Elmer-DeWitt was pumping up bullish calls of Andy Zaky last year, I advised him not to follow Zaky as his calls where based on simplistic extrapolation of earnings that are only right as long as the stock is climbing. The extrapolation technique has no visibility, it blinds you from spotting upcoming crucial shifts in the companies direction, and, consequently, its profits. Only few followed my advice and, hopefully saved money. I think instead of arguing here we should just place our bets and see who's right...

  • Reply 17 of 59
    rabbit_coachrabbit_coach Posts: 1,114member

    Quote:

    Originally Posted by palomine View Post



    When it comes to the big three financial rags, Fortune, Forbes and Barron's, ther has scarcely been a single mildly positive article regarding Apple in the last year. Oh, throw in the New York Times. I realize they all get click bait revenue, but that doesn't explain everything because any article with Apple in it will get clicked on.



    No, it's almost as if somebody is paying them to run these negative articles. They make Apple sound like a Disaster, when, if they did nothing for the next three years they would still be among the top cash holders in the world.



    So, who is paying these publications? Methinks Samsung is spending an awful lot on 'advertising'...Google?



    I realize that Fortune Forbes and Barron's cannot survive without this injection of money. All of Publishing is in some trouble especially the periodicals. Too bad they have to stoop to Yellow Journalism indeed.



    What's a good way to prove it?


    Sounds really horrible what you are suggesting, but don't see many other options. To prove that on the other hand, is not very easy.

  • Reply 18 of 59
    jragostajragosta Posts: 10,473member
    richl wrote: »
    I disagree. Their news coverage is generally low-quality link bait but some of the guest articles and longer pieces are wonderful.

    Uh huh. So an article that talks about 'fondleslabs' is fair and unbiased?

    Then look at his clever use of the facts. Apple's all-time high was 705. He calls that "just shy of $800".

    Then he says that he predicted that Apple would fall "way back in November". Well, considering that Apple had dropped to the low 500s by early November, that's not much of a prediction, is it?



    The Register stinks as a source of information, but this article is low - even for them.
  • Reply 19 of 59
    jragostajragosta Posts: 10,473member
    enature wrote: »
    Don't you guys think that some of you here on AI are getting so emotionally attached to AAPL that you disregard any critique whether valid or not?

    Well, if we seen a valid critique of AAPL, you can ask the question then. Until then, your question is purely hypothetical.

    Apple is still growing. They're still the most profitable company on the planet. They're still driving the industry forward as everyone seems to go out of their way to copy Apple. Yet AAPL is trading at 7 time cash-adjusted earnings while the average, run of the mill, hum-drum stock is trading at 16.

    EVEN IF Apple were to suddenly become a purely average company with average results, they're still trading at less than half of what the market considers a fair P/E. So where's the valid explanation?
  • Reply 20 of 59
    jragostajragosta Posts: 10,473member
    palomine wrote: »
    When it comes to the big three financial rags, Fortune, Forbes and Barron's, ther has scarcely been a single mildly positive article regarding Apple in the last year. Oh, throw in the New York Times. I realize they all get click bait revenue, but that doesn't explain everything because any article with Apple in it will get clicked on.

    No, it's almost as if somebody is paying them to run these negative articles. They make Apple sound like a Disaster, when, if they did nothing for the next three years they would still be among the top cash holders in the world.

    So, who is paying these publications? Methinks Samsung is spending an awful lot on 'advertising'...Google?

    I realize that Fortune Forbes and Barron's cannot survive without this injection of money. All of Publishing is in some trouble especially the periodicals. Too bad they have to stoop to Yellow Journalism indeed.

    What's a good way to prove it?

    The SEC could, in principle, go after analysts who post highly negative commentary and then profit from it. That's extremely hard to do, though. Most of the big firms are clever enough to keep their groups separate so they can claim no insider information - at least on paper.

    I'm not convinced that anyone is being paid to write these articles, though. It's the same kind of nonsense that Apple has had to deal with for 30 years. FUD sells clicks. Particularly FUD about Apple - since all the more 'clever' analysts play the 'cult' game and pretend that they're above all that. It's hard for them to understand that quality sells and that some people appreciate the value that Apple brings to the table. Back in the 90s, it was all about how Apple was dying ('beleaguered' was the standard term) because it was overpriced and incompatible. For the last 10 years, it has been about how they wont' sell cheaper products to appeal to the masses (ignoring, of course, the fact that Apple sells more tablets and, possibly, more smart phones than anyone else).

    There seems to be some mass hysteria. You don't see lots of whining from the press that Mercedes needs to sell cheaper products. Or Ferrari. Or Rolex. Or any other high end supplier. Somehow, the "everything has to be cheap" seems to apply only to Apple products.
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