Apple Q3 2013 Results – What to Expect

Apple is likely to record its worst sales in a decade as iPhone and iPad growth slows.

Apple will announce its financial results for the three months to the end of June on Tuesday with all predictions suggesting that the record-shattering results of previous years will not be repeated by Tim Cook this time round.

Instead we are likely to see flat results year-on-year which would represent the worst sales performance in a decade, when Apple saw a decline of 1.3% in revenue in 2003.

Apple has changed the way its gives estimates in recent quarters to reflect a range of results which are much more in line with reality compared to the low-ball estimates they always smashed in previous years.

In April Apple predicted it would record revenue of between $33.4 billion and $35.5bn with the majority of Wall Street and independent analysts - as polled by Forbes - predicting it will come in just above the $35bn mark. In the same period in 2013 it recorded revenue of $35bn with profits of $8.8bn.

Record-breaking

It used to be the case that each new set of financial results brought with it recording breaking rise in iPhone and iPad sales.

While there is likely to be an increase in sales of both compared to last year, record breaking iPhone and iPad sales unlikely to be repeated tonight, with Forbes' analysts predicting anywhere between 23 million and 32 million iPhone sales, and somewhere between 22 million and 14.5 million iPads being sold.

Last year in the same period Apple sold 26 million iPhones and 17 million iPads.

Mild refresh

Profit is likely to be below last year's results, with analysts lowering their predictions from an estimated profit of over $10bn three months ago to currently predicting just $8.15bn profit.

Except for a mild refresh of its MacBook Air line-up Apple has yet to announce any major new products in 2013. A new premium iPhone, an all-new budget iPhone and refreshed iPads are all still expected in 2013, but the lack of fresh products in the market is likely to have had an impact on Apple's performance over the last three months.

The company is also reaching saturation point in terms of new markets for its iPhone and iPad - markets which were responsible for a lot of the growth in recent quarters. Without a budget option to offer (yet) in developing countries, growth is likely to be limited.

Apple's share price is currently $426.31, which is a long way off its 12-month high of over $700 which it hit in September last year. It is unlikely that Tuesday's results will have a positive impact on the share price, though if Apple come in somewhere near analysts' predictions then it is unlikely to dip too much from its current position.