Apple Earnings and iPhone 5 Rumors Have Investors Scared

Apple might be one of the most thrilling financial investments, but the past few months have brought some scrutiny and uncertainty regarding the company’s future success. Recent stock slips, iPhone 5 slow-sale rumors and the upcoming Apple earnings report for last quarter have investors scared of a plunge in revenue.

It’s been a difficult time for Apple, trying to stay at top of a market when innovation in technology is no longer that hard to provide at affordable prices. iPhone 5 should have fixed the slow sale problem that impeded on Apple’s earnings throughout 2012. Recent rumors indicate that Apple is trying to cut losses with iPhone 5 by reducing the orders for parts from suppliers. Meanwhile, Apple is also rumored to be launching two iPhones this summer, one extremely affordable.

“There’s this lingering unease about the stock because Steve is no longer around” said Charles Wolf, Needham & Co analyst. “The problems last quarter have raised the issue in investors’ minds that Apple no longer has a leader of Steve’s stature” he added. Analyst Walter Piexyk with BTIG has a similar take: “If the company gets on the call and provides a positive outlook to sales, then investors will be relieved. But any reduction in earnings guidance could scare people”.

Investors have had a hard time seeing as Apple stock keeps plunging instead of skyrocketing like it once used to. Last September, Apple’s stock was at $702 and in only a few months, it dropped $200 to $500 last week. So, Wednesday’s release of Apple’s earnings for last quarter might only cause more loss if they came under Wall Street’s earnings estimates for $54.69 billion and $13.41 per share.

However, CNN Money writes about a consensus view that Apple’s earnings year-over-year will record a 3 percent decline. But as the website notes, “the so-called consensus is hardly that. It’s merely the average of all the estimates”. So, while everybody is talking about Apple’s earnings taking a plunge, analysts’ predictions aren’t so gloomy. In fact, Apple’s earnings in last quarter are positive, but not impressive.

Thomson Reuters talked with analysts that had estimates ranging from 14 percent decline to a 14 percent increase in Apple earnings. The most accurate seems to be the estimate made by crowdsourcing site Estimize which sees Apple’s earnings rising by about 4 percent.