Fiscal 2013 predicted to become 'a year to forget' for Apple, higher hopes seen for 2014

Posted:
in AAPL Investors edited January 2014
Investors will likely look back on Apple's fiscal year 2013 as "a year to forget," though it will set the stage for a strong 2014, one analyst believes.

Fiscal
The performance of Apple's stock so far in fiscal year 2013.


Ahead of Apple's earnings report for its second quarter of fiscal 2013, Brian White of Topeka Capital Markets issued a note to investors on Tuesday in which he lowered some of his estimates. He now expects Apple to see revenue of $36.5 billion in its third quarter, down from a previous forecast of $43.3 billion, while earnings per share was also cut from $10.42 to $7.83.

White believes Apple's profit cycle likely bottomed out in its recently-concluded March quarter. But he sees the company setting the stage for a strong turnaround, the benefits of which he expects to be seen in the company's fiscal year 2014.

Apple's so-called "year to forget" will be driven by slowdown in the high-end smartphone market, which has negatively affected Apple's growth, White said. His projections call for the company to see a 1 percent decrease in earnings per share during fiscal 2013, which would be the first annual decline since fiscal 2003.

Looking forward to Apple's fiscal 2014, which will begin in October, White expects that Apple will see new growth by expanding the iPhone lineup with a new low-end model. Rumors have suggested the company is working on a low-cost model with a plastic body that could be sold without the need for a carrier contract subsidy.

White also hopes that Apple will introduce products in entirely new categories in fiscal 2014, namely a full-fledged television set and a so-called "iWatch" wrist accessory. Finally, he also expects that Apple will reach an agreement with China Mobile, the largest carrier in the world, to begin offering the iPhone.

Beyond those new growth opportunities, White believes Apple should leverage its $137.1 billion cash balance to attract investors and built a "safety net" around the stock. The analyst has been an outspoken proponent of Apple paying out a higher dividend to investors.

Despite the downward revisions in its estimates, Topeka Capital Markets has maintained a "buy" rating and 12-month price target for AAPL stock of $888 ? more than twice its current trading levels.
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Comments

  • Reply 1 of 70


    By a year to forget they mean 50 billion in net profit?


    Oh boy.


     


    So google's 10 billion profit will be better?


     


    What about the others?

  • Reply 2 of 70
    lilgto64lilgto64 Posts: 1,147member
    A year to forget? What are we forgetting? that the analysts had their heads too far up their arses to make accurate predictions?

    I don't recall anyone from Apple ever claiming that their stock would climb to $1000 a share.
  • Reply 3 of 70
    Apple could use all the cash it has and borrow some more to buy Google, Licence Android in the future, make use of all the cool Google technology. The Stock at that point would climb back to 700 easily, regaining the lost market cap. Now this is pure speculation, but my comments are not a whole lot different than the Analysts reports.
  • Reply 4 of 70
    tbelltbell Posts: 3,146member

    Quote:

    Originally Posted by firhill07 View Post



    Apple could use all the cash it has and borrow some more to buy Google, Licence Android in the future, make use of all the cool Google technology. The Stock at that point would climb back to 700 easily, regaining the lost market cap. Now this is pure speculation, but my comments are not a whole lot different than the Analysts reports.


     


     


    You lost me at cool new Google technology. 

  • Reply 5 of 70
    evilutionevilution Posts: 1,280member


    Considering the popularity of the iPhone 5 and the iPad mini, I predict that Apple are going to surprise the analysts. Yes, Apple had supply problems with the 5 but that's only because they sold so many. There was a slight wait for the iMac and a wait for the new Mac Pro but these things aren't really their main business any more.

  • Reply 6 of 70
    tallest skiltallest skil Posts: 43,236member


    Originally Posted by TBell View Post

    You lost me at cool new Google technology. 


     


    Think about it. Apple buys Google and gets:


     


    The framework for an Apple-based self-driving car.


    A search algorithm to use for Spotlight (and then release publicly to slap in Google's face).


    Proof of theft of IP in Android (which is obviously shut down completely).


    Servers to wipe clean and run iCloud on.

  • Reply 7 of 70
    gatorguygatorguy Posts: 18,704member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Think about it. Apple buys Google and gets:


     


    The framework for an Apple-based self-driving car.


    A search algorithm to use for Spotlight (and then release publicly to slap in Google's face).


    Proof of theft of IP in Android (which is obviously shut down completely).


    Servers to wipe clean and run iCloud on.



    If Apple bought Google how would Spotlight be a slap in Google's face??image

  • Reply 8 of 70
    tallest skiltallest skil Posts: 43,236member


    Originally Posted by Gatorguy View Post

    f Apple bought Google how would Spotlight be a slap in Google's face??image


     


    Releasing Google's search publicly. Just freely allowing anyone else to use the algorithm.




    But anyway, this is all fantasy in the first place. An Apple->Google purchase would be blocked by every government.

  • Reply 9 of 70


    Apple can't win with Wall Street analysts in particular and the street overall.  The business model that Apple established goes so far against the typical MBA or McKinsey-style consultant-based business models that it doesn't matter if they over-perform to expectations - that simply means they'll do worse in the future, according to the analyst.  If they underperform, then it means they're quickly going to go out of business because their whole model is wrong.


     


    I'm always perplexed - do financial analysts not know what good fundamentals are?  Judging any company based upon quarterly results does not make sense - unless the trend cycling downward.  RIM is a perfect example, but even there, analysts cut them WAY too much slack for far too long.  Their fundamental business was for crap, but for a long time they still got support from the street.  

  • Reply 10 of 70
    paxmanpaxman Posts: 4,550member


    The essential part of this article is neatly and so eloquently framed in the last three words of the first paragraph. It probably would have been better to have made that alone the headline. 

  • Reply 11 of 70
    lkrupplkrupp Posts: 6,073member


    Really, AI, quit posting this analyst stuff already. We get it. Analysts are nothing more than Tarot card readers, chicken bone prognosticators, tea leaf seers, and aborted phrenologists. Analysts should have names like "The Amazing Karnac" or "Madam Kolache."


     


    I'm tired of them.

  • Reply 12 of 70


    Do whatever you want Tim Cook (aggressive share buybacks, acquisition, large iphones, china mobile deals new products etc) but do not raise the dividend for the speculative shareholders. You will drain your company's cash reserve and would achieve nothing!  I own Apple stocks from 450 level but I do not want that Pucking dividend!

  • Reply 13 of 70
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by Tallest Skil View Post


    Think about it. Apple buys Google and gets:


     


    The framework for an Apple-based self-driving car.


    A search algorithm to use for Spotlight (and then release publicly to slap in Google's face).


    Proof of theft of IP in Android (which is obviously shut down completely).


    Servers to wipe clean and run iCloud on.



    So last week you were suggesting Apple take the company private for $380B and now this. Yeah, buy GOOG. Great use of $269B...Not!  


     


    None of the advantages you cite are worth a nickel in my opinion.


     


    Self driving car! LOL that will be a high revenue generating product /s


     


    Search algorithm for spotlight LOL another cash cow /s


     


    Proof of IP theft LOL so if they own GOOG what are they going to do, sue themselves?


     


    The storage and datacenter infrastructure might be worth something but Google is famous for using inexpensive commodity server boxes.


     


    Never going to happen!

  • Reply 14 of 70
    pokepoke Posts: 506member


    These guys always seem to forget that Apple makes the iPad. iPhone growth might slow because they've saturated markets in the developed world, but the iPad still has a long way to go. Margins will shrink but revenues will keep growing.

  • Reply 15 of 70


    Anal-ysts still see Apple as a hardware vendor instead of a platform vendor.


    Apple has plenty of software services that increasingly make money in addition to hardware.  (iTunes, iAD, iCloud, iBooks, Siri, AppleMap) And more are coming... (iRadio, iTV?)


     


    Analysts really need to start analyzing Apple's platforms.  They will learn within 3 to 6 months.


     


    Time will tell.

  • Reply 16 of 70
    charlitunacharlituna Posts: 7,174member
    Anyone remember what Apple's guidance for this quarter was.

    That is the only thing I compare to, because Apple knows what Apple is about to do or not do, how many units they can produce etc. Even if they aren't telling us these facts they are using them.

    Unlike these analysts with their sources. Frankly I think some of them are reading the squeeze marks in the dog poop steaming on the sidewalk, or worse
  • Reply 17 of 70
    SpamSandwichSpamSandwich Posts: 29,344member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Think about it. Apple buys Google and gets:


     


    The framework for an Apple-based self-driving car.


    A search algorithm to use for Spotlight (and then release publicly to slap in Google's face).


    Proof of theft of IP in Android (which is obviously shut down completely).


    Servers to wipe clean and run iCloud on.



     


    Tim, I hope you're paying attention! :D

  • Reply 18 of 70


    "...hopes that Apple will introduce products in entirely new categories in fiscal 2014"


     


    Ah yes, the pipeline. Forget 2013. There is stuff. In the pipeline. Check back next year.

  • Reply 19 of 70
    charlitunacharlituna Posts: 7,174member
    jmgregory1 wrote: »
     Judging any company based upon quarterly results does not make sense -

    It's better than judging against last year.

    But both are stupid when you don't consider the facts. Like last year there was a new product launch during the same time. R last quarter was holiday shopping. These kinds of things cause an expected drop in sales and should be accounted for.

    And making estimates way over those of the company when they have a plethora of facts guiding them is just whacked
  • Reply 20 of 70
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by Gatorguy View Post


    If Apple bought Google how would Spotlight be a slap in Google's face??image



     


    Think "Three stooges"

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