Apple set for strong financials but Yahoo woes to continue

Technology giants Apple and Yahoo are both set to release their financial results on Tuesday but their fortunes are expected to be markedly different.

Apple continues to cater to rabid consumer demand with its exceptional marketing machine and product launches, which remain unrivalled in the IT industry, while Yahoo is on a spiralling downfall.

Yahoo has posted disappointing revenue and profits this year and it's unlikely this will get any better with the latest results.

Apple, meanwhile, posted its strongest second quarter ever in July, reporting $28.6bn in revenues and $7.31bn in profits. The earnings represented an 82 per cent increase from 2010.

"Apple's results this quarter will definitely continue to be good," Quocirca analyst Clive Longbottom told V3.

Even though many consumers were expecting Apple to reveal the iPhone 5 rather than the iPhone 4S, Longbottom said the disappointment is unlikely to impact sales while other products continue to sell strongly.

"Many telcos were selling off the iPhone 4 relatively cheaply in recent months [to make room for the iPhone 4S] but Apple's other devices, like the MacBook Air and the iPad continue to sell very well," said Longbottom.

"It is unlikely that we will see iPad revenue taking a hit even though Apple has faced increased competition from the likes of Samsung," he added.

Longbottom said the only Apple product likely to take a significant hit is the iPod.

"I expect the iPod won't be selling too well anymore as so many Apple consumers choose to use the iPhone instead," he said.

Longbottom added that it will be Apple's next and final quarter results for the year that will be most interesting.

"Next quarter we will be able to see how the iPhone 4S is performing, how Apple's performing under new ownership and how it's doing without Steve Jobs," he said.

Yahoo is unlikely to reveal any good news in its financials, with Longbottom saying that comparing Apple and Yahoo financial results is likely to be like "comparing chalk and cheese".

"I can't imagine Yahoo results will make good reading for the Yahoo shareholders. The board is weak and shareholders are unhappy the business did not sell to Microsoft when the offer was on the table," he said.

"Unless it manages to find a buyer with big pockets, it will continue to spiral out of control. Microsoft is propping it up a bit, but Microsoft is propping up so many companies at the moment, like Nokia, that the DoJ (US Department of Justice) may step in."

Microsoft tried to buy Yahoo in 2008 for $48.96bn, but the offer was rejected because Yahoo believed its business was being undervalued.

Yahoo former chief executive Carol Bartz was hired shortly after Microsoft's acquisition attempt. The board hoped Bartz would succeed in turning the firm around after her predecessor Jerry Yang led the firm to an all-time low.

However, Bartz was recently fired after independent Yahoo directors studied Yahoo's assets and performance and concluded that the company had not performed as well as it could under her leadership.

The financial results Yahoo will release later today will be the first performance indicator given to the market since Bartz's departure.