Ahead of the Bell: Apple's earnings report looms

Some analysts expect Apple 1Q results Wednesday will top forecasts; worry about future remains

Associated Press

NEW YORK (AP) -- After a 30 percent decline in Apple's stock price since late September, analysts are waiting to see what the company's latest financial report, out after the market close Wednesday, signals about the technology company's growth prospects this year.

Apple shares peaked at $705.07 on Sept. 21 —the day of the iPhone 5's release. The stock fell below $500 for the first time in 11 months last week.

Several analysts believe that Apple Inc.'s fiscal first-quarter report will top Wall Street expectations, helping it rebut its skeptics. One belief driving the stock-price decline is that the company has lost its edge with the expensive iPhone, and is being outplayed by smartphones running Google's Android operating system.

Analysts on average expect the company to show sales of 48 million iPhones, which compares with the 37 million it sold in the same period a year prior.

Jefferies analyst Peter Misek predicted that Apple sold 53 million phones during the quarter. More importantly, Misek, who has a "Buy" rating, said in a note Tuesday that he believes Apple will launch new phone models this year, including a version cheaper than the iPhone 5. That could help drive sales.

Janney Capital Markets analyst Bill Choi also expects new products to increase profit growth this year, he said in a Wednesday note to investors.

For this quarter, Choi, who also has a "Buy" rating, expects Apple results to beat expectations on strong iPhone and holiday season sales.

Both Choi and Misek expect Apple's most recent quarter to beat the forecast of analysts polled by FactSet: Profit of $13.48 per share on $55 billion in revenue.

But the company's comments for the current quarter is more important for investors, said Citi Research's Glen Yeung. He's wary that demand is growing for rival Samsung phones, particularly overseas. He has a "Neutral" rating on the shares and predicts that Apple's October-December results will fall short of Wall Street's average forecast.

Apple shares rose $1.90 to $506.67 in premarket trading.

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