Apple Inc. (NASDAQ:AAPL) has crossed a line that growth investors probably never saw coming. As analysts continue to whittle away at their profit targets on the tech giant, we can now officially say that Wall Street sees Apple posting lower earnings in fiscal 2013.
We’re not just talking about the fiscal second quarter that’s coming to a close today. The market’s known for months that this would be the first time Apple posts a year-over-year decline in profitability for a quarter since 2003. We’re now looking at an entire year of shrinking earnings on a per-share basis.
And I would’ve gotten away with it, too, if it weren’t for those pesky Androids
Some underdog backers may argue that it’s not a coincidence that Apple’s prognosticators collectively turned within days of Research In Motion Ltd (NASDAQ:BBRY)‘s stateside release of the first smartphone running the new BlackBerry 10 mobile operating system.
They’re wrong, though. It’s not the recent updates in Research In Motion Ltd (NASDAQ:BBRY) or Windows Phone that are making Apple feel a bit more mortal. It’s the growing global appetite for Google Inc (NASDAQ:GOOG)‘s Android — and the margins that Apple is willing to sacrifice to make sure that it’s not relegated to cranking out a niche product for the well-to-do — that has Cupertino putting out cheaper iPads and keeping older iPhones around longer at lower price points.
After all, Wall Street still sees top-line growth. Analysts see Apple Inc. (NASDAQ:AAPL)’s revenue climbing 9% for the quarter and 16% for the fiscal year, though those numbers have also been pared back in recent weeks. Apple Inc. (NASDAQ:AAPL) just isn’t being afforded the same generous markups that it has in the past, and that’s not going to change until Apple raises the bar of innovation again.
Let’s check out how analyst profit estimates for Apple Inc. (NASDAQ:AAPL)’s fiscal 2013 have been scaled back in recent weeks.
|90 Days Ago||$48.81|
|60 Days Ago||$44.84|
|30 Days Ago||$44.70|
|7 Days Ago||$44.19|
|6 Days Ago||$44.12|
If you think that’s swift justice from a pool of dozens of Wall Street modelers, the judgments for fiscal 2014 have fallen even harder. Over the past three months alone, analysts have gone from targeting $57.35 a share to $49.79.
Apple Inc. (NASDAQ:AAPL)’s stock has taken a beating in that time — down 17% this quarter — but it’s not as if it has gotten that much cheaper as profit estimates have been pared back by 10% for this fiscal year and 13% come fiscal 2014.