The Top Apple Analyst Says Apple Will Deliver Some Startlingly Bad News Today

And those low expectations are probably a good thing. Because they give the company an opportunity to surprise on the upside.

Alas, Apple's June quarter results will only be important to the extent that they offer clues about Apple's future results, including the September quarter. And here, says Wall Street's top Apple analyst, Gene Munster, the news is going to be startlingly bad.

Wall Street's current estimate for Apple's revenue in the September quarter is $38 billion.

Munster thinks Apple will issue "guidance" of only $34 billion to $36 billion.

That's a big haircut.

This weak outlook, Munster says, will be the result of crappy iPad sales.

By now, Munster and other Wall Street analysts had expected Apple to release a new iPad. There has been no news on that front. So some of the iPad sales that Munster had expected the company to make in the September quarter now will get pushed into future quarters or just won't happen at all.

Revenue of $35 billion in the September quarter (the midpoint of the expected guidance range) would represent revenue shrinkage of about 2% year over year.

For those who have followed Apple closely over the last 5-7 years, that fact is so startling as to be almost unfathomable.

Last year in the first quarter, Apple's revenue growth rate was a staggering 60%. And the company had been growing at similarly mind-blowing rates for years.

By this year's first quarter, however, Apple's growth had decelerated to 11%.

And Munster and Wall Street think that, in the June quarter, Apple's revenue will begin to shrink, with revenue dropping about 2% year over year.

This is what can happen in the tech industry, which is driven by product cycles.

Over the past 5-6 years, Apple has ridden two huge product cycles--iPhones and iPads.

But now both of those produce cycles have entered their mature years. And Apple has not introduced any major new products to take up the slack. (Apple, in fact, has not introduced any new products period since the fourth quarter of last year).

As weak as Apple's revenues are, they look great relative to the company's earnings.

This quarter, Munster expects Apple's earnings per share to fall a startling 25% year over year. This fall will be driven by the revenue decline and, more strongly, by Apple's profit margin decline, which we wrote about yesterday. Munster expects Apple's earnings to fall another 16% in the September quarter.

Putting all this together, it's no surprise that Apple's stock has cratered more than 40% from its high last fall. Back then, even the biggest Apple bears (and there weren't many), weren't imagining that Apple's revenue growth would stop and that Apple's earnings would collapse.

The good news for shareholders (I'm one) is that Gene Munster and other analysts expect Apple to release a bunch of new products this fall, including a new iPhone (the iPhone 5S) and a new iPad. Munster also thinks that Apple will release a cheaper iPhone, which he thinks will help drive a strong increase in iPhone sales and overall revenue in this year's December quarter. There have been reports recently that Apple is experimenting with larger-sized screens for both the iPhone and iPad, which would certainly be greeted with excitement. And there's always the possibility that, in 2014, Apple will finally release a new category of product, such as its long-expected TV set or the iWatch.

Munster expects that excitement around the fall's new products will drive Apple's stock higher by the end of the year.

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