Apple hinted during its second quarter earnings conference call on Tuesday that it may not have any big product announcements coming until this fall, and that has Canaccord Genuity analyst Michael Walkley expecting the company's June quarter to be fairly weak. While he sees a strong fall in store for the company, he's lowering his 12-month target price for Apple's stock from US$600 down to $560.
Apple's fall product announcements may give investors a soft summer
"June quarter revenue and margin guidance failed to meet even our below-consensus estimates, as refreshes of key iPhone and iPad products are not expected to occur until the fall," Mr. Walkley said. He did, however, see Apple's announcement that it is increasing its stock buyback and shareholder dividend programs as good news.
Apple reported sales at $43.6 billion for its second fiscal quarter of 2013, beating Wall Street's $42.49 billion estimate. The company sold 37.41 million iPhones, 19.5 million iPads, and just short of 4 million Macs during the quarter. Apple's figures were in line with Mr. Walkely's expectations and above the Wall Street consensus.
Looking forward, Mr. Walkley said, "We maintain our belief that Apple is well positioned to leverage its leading iOS ecosystem and large installed base, and new product launches expected in [the second half of 2013] should result in reaccelerating year-over-year earnings growth during the September quarter."
During Apple's earnings report conference call on Tuesday, CEO Tim Cook stated, "Our teams are hard at work at some amazing new hardware, software, and services that we can't wait to introduce this fall and throughout 2014," implying that consumers and investors have to wait until this fall to see anything new from the company.
Apple could surprise everyone with big announcements earlier, and the company's just announced Worldwide Developers Conference in June would be a perfect time for that to happen. Based on Mr. Cook's comments, however, it does seem likely we'll be waiting until fall to see new iPhone and iPad models.
Despite his lower target price, Mr. Walkley is maintaining his "Buy" rating for Apple's stock. Apple is currently trading at $402.50, down 3.63 (0.89%).