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Apple: Headed For FY Q3 Miss?

This article is more than 10 years old.

Some Apple analysts are getting a little worried that the company may slightly miss Street expectations when it reports fiscal third quarter results on July 24.

Mizuho Securities analyst Abhey Lamba this morning asserts in a research note that the company "has already started experiencing a slowdown due to the impending iPhone 5 launch."

For the quarter, he thinks the company will report revenue in the $36.5 billion to $37.5 billion range, below the consensus at $37.6 billion. He sees profits in the $10.25 to $10.50 range, consistent with the Street at $10.35 a share. Lamba thinks the company will report gross margins of 41.5%, about 250 basis points above guidance.

He also thinks that September quarter guidance will be below consensus.

"Although Apple experienced strong momentum in iPad sales which should benefit from increased distribution of the new iPad, inventory build-up and lack of competition, our checks indicate that the company has started to experience slowdown ahead of the expected launch of the iPhone 5," he writes. "We expect the company to ship around 27 million iPhones vs. consensus of ~29-30 million devices."

For FY Q4, he expects the company to guide to revenue of $35 billion to $36 billion and profits of $8.50 to $9 a share, below current consensus at $38.5 billion and $10.37 a share. Lamba thinks the company could actually report much higher results - he thinks they could reach $40 billion and over $10.50 a share. "Consensus for iPhones needs to move lower while there is upside to consensus iPad forecast," he says. "For gross margin, we expect AAPL to guide for 200-300bp of sequential decline."

Despite his short-term concerns, Lamba maintains a Buy rating and $725 target on the stock. "While the company is unlikely to post upside to June estimates and September quarter forecasts present downside risk, we remain positive about the stock as the iPhone 5 upgrade cycle should move FY13 estimates significantly higher," he writes. " Our checks indicate that the company could sell over 90 million iPhones in the calendar second half of 2012, which compares with current consensus of 75-77 million phones. The upside to iPhones combined with a strong position in the tablet space and share gains by Macs should continue to push estimates and stock price higher."

Apple this morning is down 52 cents, to $607.69.