Tuesday, April 24, 2012

Apple reports after the bell today - considering its impact on valuation for the markets here , they better blow out this report and most important , they need to blow out their profit margin and new add forecasts. Some indications Apple has the potential to disappoint today

http://www.zerohedge.com/news/apple-beats-guides-lower


Apple Beats, Guides Lower

Tyler Durden's picture
Submitted by Tyler Durden on 04/24/2012 16:34 -0400



And here they are:
  • APPLE 2Q REV. $39.19B, EST. $36.87B
  • APPLE 2Q EPS $12.30, EST. $10.02
  • APPLE SOLD 35.1 MILLION IPHONES IN QTR, EST. 31.2M   
  • APPLE 2Q IPOD UNITS SOLD 7.7MLN , DOWN 15%            
  • APPLE 2Q IPAD UNITS SOLD 11.8MLN                      
  • APPLE 2Q GROSS MARGIN 47.4%, EST. 42.8%              
  • APPLE 2Q MACINTOSH UNITS SOLD 4MLN , UP 7%            
But:


    • APPLE SEES 3Q REV. ABOUT $34B, EST. $37.49B
    • APPLE SEES 3Q EPS ABOUT $8.68, EST. $9.96       
    Is this just the usual lowballing, or is it for real this time? Recall that Tim Cook's first earnings release the company guided above consensus. Is Cook becoming Jobs, or is this a guide down for real?
    Also the reason for the beat: ASIA. Not the surge in sequential growth in the traditionally weaker Q2 (ended March 31) quarter all courtesy of Asia:
    Stock right now is +$25 in the after hours session.

    and previously....

    http://www.zerohedge.com/news/apple-angst-expectations-remain-extreme


    Apple Angst As Expectations Remain Extreme

    Tyler Durden's picture
    Submitted by Tyler Durden on 04/24/2012 08:56 -0400




    Apple is down 1.5% pre-market and comfortably back below its 50DMA on a top-line (and actuations) miss from AT&T among other anxiety-inducing sentiment this morning. Perhaps what is really providing all the performance anxiety is the extreme expectations that are piled upon this greater-than-bellwether stock that has become the market. As Bloomberg's chart-of-the-day notes, Apple needs to surpass estimates by a wider margin than most of its peers in the S&P 500 in order to satisfy investors - if history is any guide. On an adjusted per-share basis, profits have beaten estimates by about 19% on average over the past seven years - a true under-promise over-deliver strategy. As Colin Gillis of BGC Partners notes, "Apple will need to smash records to keep momentum" as surpassing the $9.98/share by 20% is an impressive feat indeed as they point out that seven of the nine times Apple's shares have fallen the day after earnings has been when earnings beat by less than 20%. Performance anxiety indeed.
    And AAPL is stumbling once again this morning...


    http://www.businessinsider.com/this-is-going-to-make-apple-investors-nervous-iphone-sales-crash-at-att-2012-4

    When Verizon reported earnings last week Apple investors zeroed in on one thing: iPhone sales fell by 24% on a quarter over quarter basis.
    We have another data point from a U.S. carrier, and it's only going to make investors even more worried.  AT&T sold 4.3 million iPhones, which is a 43% sequential decline.
    That means between AT&T and Verizon, iPhone sales fell 37% on a quarter over quarter basis.
    If this trend holds across the board, then Apple will miss the Street's iPhone estimates. If Apple misses on iPhone sales the stock will be slaughtered.
    Analysts believe International sales, particularly in China, will be strong enough to offset any sequential sales dip in the U.S. We'll find out tonight when Apple reports earnings. Tune in here for live coverage starting at 4 PM eastern.

    This AT&T news sounds bad, but here's the silver lining: AT&T sold 5.5 million smartphones overall, which means the iPhone was an astounding 78% of sales. At Verizon, the iPhone was more than half of all sales.
    This is more evidence that Apple is mounting a big comeback against the market share lead Android racked up. It's also evidence that when given a choice, consumers pick iOS over Android.

    and snippet from Reggie report , full report at the link....


    http://www.zerohedge.com/contributed/2012-11-16/apples-ipad-losing-market-share-and-profit-margin-apple-hits-all-time-high



    As it stands now, Apple is rapidly (much more so than can be gleaned from sell side analyst reports and the media) losing market share in both tablets and smartphones!
    As Apple loses market share, its costs to manufacture are actually increasing due to massive competition…
    Apple's losing tablet market share faster than it lost smartphone market share
    Android has moved to over 44% market share in tablets from less than 3% in less than a year and a half. That's amazing and much faster growth than it exhibited in smartphones – a category in which Android literally dominated in worldwide and US smartphone growth (as well as installed base re: US) in just a few short years. Apple dropped from just over 96% to just under 55% in the same time frame. Again, as with the smartphones, the Android tablet tech is superior to that of iOS products and as iOS normalizes the difference, margins will suffer. Margins will drop (is dropping) faster for tablets because prices are coming down as fast as tech is increasing.
    image061

    Prices are dropping…

    image031

    Costs are increasing…

    image042
    ipad_costs
    So what does all of this add up to? Margins dropping!!! Just as I said last summer... Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof! 

    and why does Apple matter to stock markets here in the US...

    http://www.zerohedge.com/news/apple-now-larger


    Apple Is Now Larger Than...


    Tyler Durden's picture
    Submitted by Tyler Durden on 04/11/2012 08:49 -0400




    The Apple comparisons have come thick and fast but today's Bloomberg Chart-of-the-day really highlights the macro fundamental weakness in Europe and the micro-bubble in corporate America's shiny new toy. Apple's market cap is larger than the combined market cap of companies in Spain, Portugal, and Greece.



    and....

    http://www.zerohedge.com/news/ibubble-apples-market-cap-now-same-entire-retail-sector-bigger-all-semis

    iBubble: Apple's Market Cap Is Now The Same As The Entire Retail Sector, Bigger Than All The Semis

    Tyler Durden's picture
    Submitted by Tyler Durden on 02/28/2012 15:12 -0400




    This is simply stunning: one company, which has two flagship products, has a bigger market cap than the entire Semiconductor space, and is just shy of the entire S&P Retail sector.
    The 216 hedge funds in the name as of December 31 is hopelessly stale. We are certain that by now this number is at least 250, if not 300.
    and....

    http://www.zerohedge.com/news/overnight-sentiment-quiet-chance-excess-volatility-after-apple-reports


    Overnight Sentiment: Quiet With A Chance Of Excess Volatility After Apple Reports


    Tyler Durden's picture
    Submitted by Tyler Durden on 04/24/2012 06:49 -0400




    It' quiet out there... Too quiet, as everyone is awaiting the most important earning number of the quarter - that of Apple. Everything else is secondary. Here is how the secondary data is driving the market so far in the trading session.
    From Bank of America:
    Market action

    Asian equity markets finished mixed on concerns about political uncertainty in Europe. Yesterday the Dutch prime minister Mark Rutte tendered his cabinet's resignation after the collapse of budget austerity talks. One implication of the collapse of the Netherlands government is that it could create some difficulties in ratifying the fiscal compact.

    Looking at the individual markets, the Japanese Nikkei fell 0.8% while the Korean Kospi lost 0.5%. On the flip side, the Indian Sensex managed to rise 0.6% and the Hang Seng was lifted 0.3%. The Shanghai Composite finished flat.
    In Europe, equities are rallying sharply up 0.7% in the aggregate. The best performing major European market is the French CAC up 0.9%. At home, futures are pointing to a bounceback from yesterday's 0.8% drop in the S&P 500. Futures are pointing to a 0.4% higher open today.
    In bondland, Treasury yields are backing up 1 basis point across the curve with the 10-year yield currently trading at 1.94% while the long bond is trading at 3.09%. In Europe, the UK gilt is 1bp higher as well (yielding 2.13%) and the German bund is up 3bp to 1.68%. Yields on the Periphery's debt are lower -Spain's 10-year note is 8bp lower at 5.87%.
    After rallying yesterday the dollar is weakening against a basket of other major currencies. The DXY index is down 0.1%. Commodities are mixed with WTI crude oil basically flat and gold down 45 cents an ounce at $1,638.38.
    Overseas data wrap-up
    Australia's inflation figure for the first quarter moderated to 3.1% yoy in the first quarter from 3.5% in the fourth quarter of 2011 opening the way for the RBA, the country's central bank, to cut rates. Coupled with the deteriorating outlook for employment our Australian economist expect the RBA to cut rates again at next month's meeting.
    Spain's housing market continues to deteriorate. The number of Spanish mortgages issued to buy homes fell 47.1% from a year earlier in February. High unemployment coupled with the country's economy falling further into recession and tighter credit will make it increasing difficult for households to purchase a home. Home prices should fall further. The weakness in the housing sector has implications for the country's banking sector. To read more take a look at: Spanish Banks, 19 April 2012.
    Today's events
    Both economic indicators we'll be sorting through today are released at 10:00 am: the Conference Board's Consumer Confidence Index for April and the New Home Sales report for March. The Conference Board's Consumer Confidence Index is expected to moderate to a three-month low of 69.0 in April from 70.2 in March. That is a historical weak level of confidence at this stage in an expansion. Meanwhile, we expect new home sales to rise 0.7% in March to 315,000 from 313,000 in the prior month.

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