Wall Street consensus emerging for near-zero growth in Apple’s Q3 earnings

Photo: techbeat.com

Fortune is reporting that most analysts expect Apple to report near-zero year-on-year growth when the company reveals its Q3 earnings figures on 23 July.

The pessimistic expectations began just a day after Apple reported its Q2 earnings, with Cowan and Company taking just 24 hours to post a Q3 prediction of $35.4B. More recent analyst estimates gathered by Thomson Financial, and reported on Yahoo! Finance, were marginally lower, at $35.17B. Fortune‘s own preliminary survey of 35 analysts to date is slightly lower still at $35.02B … 

That’s an interesting number, because $35.02 billion happens to be precisely what Apple reported in the same quarter last year. In other words, Apple’s revenue growth year-over-year would be zero.

Fortune does report that its own hand-picked panel is a little more optimistic, predicting year-on-year growth of just over a billion dollars, or around 3.26 percent growth.

As ever with analyst estimates, it’s important to remember that they are ultimately based on the rumor mill. Analysts essentially go on tours of Apple suppliers and try to figure out what component orders might mean in terms of sales volumes of existing products, as well as Apple’s plans and likely timings for suspected new products.

As Tim Cook himself has pointed out, this is a dangerous game even when simply trying to estimate sales of existing products – as is being done here with forecasts for Q3.

When it comes to trying to predict what new products Apple might release when – and thus predicting the company’s likely growth further into the future – we’re well into guessing territory. While the iPhone 5S seems pretty certain, we still don’t know what its exact specs might be. The presence or absence of a fingerprint sensor, or the inclusion of some other new feature, can have a significant impact on sales.

When it comes to speculation about a plastic iPhone, iWatch and HDTV, the truth is that almost nobody outside of One Infinite Loop knows the truth – and those that do are buried in non-disclosure agreements. So my suggestion is always to view short-term forecasts like these with suspicion, and treat long-term predictions as the crystal-ball gazing that they actually are.