Apple’s profit expectations may fall short

Along with many other large corporations, Apple has shown some signs of being affected by our current recession, which is likely to continue in the near future. According to Thomson Reuters, Apple is expected to have a 13% year-over-year increase in earnings to $1.42 a share, which is above Apple’s own expectations of between $1.18 to $1.23. However, some people on Wall Street are expecting even more of Apple, as they have a reputation for exceeding estimates, and are anticipating it to be approximately $1.60. Apple’s overall revenue is expected to go up to $9.2 billion, a total rise of 17%.

Analysts believe that sales of Apple’s new generation of iPod touch, which was released in early September, as well as that of the iPhone 3GS were quite strong. Mac OS X Snow Leopard’s sales are also expected to help the company maintain its high gross profit margin since software has been proven to be more profitable than hardware. Still, there are worries that expectations for Apple could be too high this time around due to the effects of the recession. Apple’s shares, which went up a shocking 93% in the past year, have risen since the end of September, but fell 1.3% to $188.05 this past Friday.

Some analysts have claimed that Apple may fall short of the high expectations because of constraints of iPhone supplies, along with other factors. Only time will tell how well Apple will continue to perform for the rest of 2009, although chances are Apple may not perform as well as many people are hoping. Do you think Apple will live up to its profit expectations? Feel free to voice your opinion in the comments.

Read [The Wall Street Journal]