Tempered expectations for Apple this earnings season, along with a new product cycle on the horizon, may be just what the company needs to get its stock moving higher, analysts say.
The tech titan will be reporting its third-quarter numbers next Tuesday. It is expected to have a repeat of its second quarter and again post a year-over-year decline in earnings. Revenue may fall flat, too.
(Read more: Earnings reports could stop tech surge in its tracks)
"Even if the quarter is horrendous and the outlook is bad—and it's hard not to see the worst—we are in a period where you have to be forgiving," said Brian White, a senior analyst for Topeka Capital Markets. "People have been unforgiving, but we have to be forgiving because you are going to have a new product cycle that starts and when they give guidance they won't put that in, they don't want to tell, they don't want to reveal too much."
The average projection for the third quarter is per-share earnings of $7.31 on revenue of $35.09 billion, according to a poll by Thomson Reuters. Apple's forecast for its revenue is in the $33.5 billion to $35.5 billion range, which would be on par or below the $35 billion the company reported in the same quarter a year ago.
Weaker iPhone sales are the primary reason behind Apple's slowing growth, but the profit cycle decline should hit a bottom this quarter, according to White.
"The way I look at Apple ... the high-end smartphone market has hit a wall," he said. "They have essentially one phone that they put out a refresh of every year and it caters to the high end of the market and they can't grow anymore because that market is fully penetrated. ... Apple, as well as investors, did not see this wall."