Wednesday, January 23, 2013

Apple’s Profits Are Flat, and Stock Drops



I told you AAPL was oversold and overpriced. QB

Apple on Wednesday reported the kind of quarter most big companies would envy, posting a profit of $13.1 billion and selling 28 percent more iPhones and 48 percent more iPads, its two biggest products.
Apple's stock price has been falling for several months.
Its stock sank 11 percent.
What is going on? Because of its great success in recent years, many investors have come to expect nothing short of perfection from Apple. And while it is still widely considered the most innovative company in the technology world, a maker of products that its devoted customers cannot live without, Apple is facing a range of challenges.
It is dealing with increased competition from big rivals like Samsung and Google, and with so many people already using smartphones, the market is not quite as untapped as it once was. Apple is forging into cheaper product categories, meaning lower profit margins. And given that Apple has grown so big, with sales of more than $160 billion in the last 12 months, keeping up its heady growth rate is becoming harder and harder.
Once-euphoric investors, who pushed Apple’s stock to a record high of $702.10 last September, have become nervous, and in after-hours trading on Wednesday, the stock traded at $461.30, down 34 percent from its peak.
Apple has reinvented itself several times over the last decade with groundbreaking new products, and could do so again. Television and electronic payments are among the markets where analysts believe the company could make a push, leading it to new heights.
“Apple has really been able to invent whole new markets,” said John Gallaugher, an associate professor at Boston College’s Carroll School of Management. “That’s where it differs from companies like Microsoft. I don’t think the mojo of this team has evaporated.”
In a conference call with analysts, Timothy D. Cook, Apple’s chief executive, said the company’s pipeline of new products was “chock-full.”
“We feel great about what we have in store,” he said, without adding details.
In the meantime, though, the love affair that investors once had with Apple is clearly waning.
“There’s nothing that can help the stock from sliding now,” said Mark Moskowitz, an analyst at J. P. Morgan Securities, who said Apple’s holiday sales met his own forecasts, even though they missed others’ predictions.

Delta in talks with Airbus, Boeing to buy jets: Bloomberg

(Reuters) - Delta Air Lines Inc (DAL) is in talks with Airbus SAS and Boeing Co (BA) to buy $1 billion or more new jets, Bloomberg reported, citing people familiar with the matter.
The Atlanta-based airline is looking at current versions of the Airbus A320 and Boeing 737, not the newest versions, likely meaning a deeper discount to retail prices than normal, the news agency quoted one person as saying. (http://link.reuters.com/byw45t)
The talks are for an order of twenty-four to thirty planes and deliveries would start in three to five years, it said.
Lindsay McDuff, a spokeswoman for Delta, told Reuters that the company does not comment on industry rumor and speculation.
The deal could have a book value of at least $1 billion, based on prices tracked by consultant Avitas of Chantilly, Virginia, Bloomberg said.
Delta, the No. 2 airline behind United Continental Holdings (UAL), is looking for a deal in which it could exchange some of its 50-seat regional jets for new planes from Boeing or Airbus, similar to a deal with Bombardier Inc (BBD-B.TO) made in December.
The sale of old aircraft is a part of a cost-cutting program at the company, which includes retiring smaller, less efficient planes from its fleet.
This could be the end of the Dreamliner for a couple of years. QB


Gold Rally Seen Sustained as Fed May Stick With QE3 Until 2014

Gold will rally this year and climb further into 2014 as U.S. Federal Reserve policy makers will probably maintain asset purchases for two more years to buttress the recovery, according to Morgan Stanley.
The metal, which advanced for a 12th year in 2012, may average $1,830 an ounce in the final quarter from $1,715 in the first, $1,745 in the second and $1,800 in the third, analysts Peter Richardson and Joel Crane said in a report today. Prices will supported by investment and central-bank buying, they wrote.
Gold had the biggest quarterly drop since 2008 in the final three months of last year as data showed the recovery in the largest economy gaining traction, boosting concern the Fed may withdraw stimulus. Minutes from the Federal Open Market Committee’s December meeting released on Jan. 3 said asset purchases will probably end this year. Each month the Fed has committed to buying $85 billion of Treasuries and mortgage debt.
“We are skeptical that dissenters within the FOMC on current monetary policy will succeed in overturning the current policy settings before the end of 2014,” the analysts wrote, citing elevated unemployment and so-called tail risks to growth. There would be an “ongoing commitment to QE3,” they said, using initials for the third round of quantitative easing.
Gold for immediate-delivery traded at $1,682.90 an ounce at 9:59 a.m. in Singapore after losing 0.2 percent. The price dropped to $1,625.85 an ounce on Jan. 4, the lowest level since August, after the release of the FOMC minutes.

12 comments:

CL said...

funny story on health care--

Went to the dr. today. Appt. for 9:30am. Now, you MUST arrive at least 15 minutes prior to scheduled appt. So I get there and people are lining the walls. Notice on door says: We will not open before 9am as we are conducting a meeting. Sorry for any inconvenience.

Me mouthing off in hall---riight...THEY don't have to notify anyone 24 hours ahead. They CHARGE if we miss appt. They can keep us standing and waiting.

Usual questions: Never smoked? Occasional drinking. Fine. You got your flu shot? Good. You lost 14 pounds. How?

My reply: So I AM watching my carbs more BUT I refuse to diet. Simply doing what I can do without feeling deprived.

Keep doing it.

Get prescriptions (including one for pain which I tell him I try to take no more than one at night and suffer as I don't want to have to keep getting more. That I'm sometimes up watching Dobie Gillis at 5am while rubbing my back in pain. That I can tell a front is going to come through as my scar from melanoma is hurting like the devil (never mind my tailbone from when I broke it falling down 5 stairs 20 years ago!)

Leave and think--Gee, if this is what it is like WITH medical, what will it be like AFTER the government gets involved? The same gobbermint that still has yet to 'GET' that we've married for 40 some years (still listing hubby as married with NO dependents BUT has approved me for insurance!!!!)

Leave and laugh. With my luck, although I used sanitizer like an addict, I'll get the darn flu and have to go back.

The Contrary Indicator said...

With today's drop in PM prices, you'd think that I bought more of the shiny stuff yesterday, but no I did not.

chicken little said...

Ah, nothing like the hypocrisy of money--Huffington and Goldman Sacs are in partnership for 'job' creation.

Why can't they write headlines any more? Huffington needs money so she's joining with man she accuses of being devil to get it?

Humming ABBA's MONEY, MONEY, MONEY song. Tis what makes the world go round ;-)

Queenbee said...

CL I would change doctors or maybe you don't have a choice with the VA. I have no such restrictions and never wait more than 15 minutes. In and out in 30 minutes. Has an accident not paying attention to where I was walking and splat face first. My arms took most of it, but I guess that is why the nose is on your face. No major damage done just sore.

Back to stocks I see that another bite was taken out of the AAPL today. Seemed to me that no one has shiny metals, but everyone owns a slice of the apple. Watch for Netflix and here is why,
How Did Netflix, Inc. (NFLX) Become Worth More Than AAPL?

Queenbee said...

Sad if you look at a Netflix chart it closed at 103 yesterday. That means you had to buy it yesterday as it opened at 144. Now I would like to be one of the insider who knew it would open at 144. I don't know how that happens.

chicken little said...

Someone in the dr.'s office had a phone and was trying to get his Netflix to work. I guess to watch tv while waiting.

I have to wonder how long Netflix will do well when everyone has a computer with Amazon and other merchants. Course, the odds are that people are to ditch ALL books and simply read on Kindle, iPads, etc.

this stands to reason...until they LOSE it all somehow through a tech glitch OR some other avenue. Otherwise, how will they sell us more STUFF?

I like my dr. I can be honest and he's always willing to understand that I CONTROL my health. Like when I told him that statins raise blood sugar, don't you know. And that the ADA has lowered the AC1 rate. He knows I read a LOT; that I'm not stupid; that I take responsibility for me; and that I am willing to do preventative care but will call the shots. Like I've told him I will NOT take any 'new' meds unless it is a life and death situation and even then I'd try to do research.

People hate people who read. It's a fact.

Funny tidbit--my 10 yr. old granddaughter was writing spelling word sentences and said, "I'm tired of using the word eat so I'm substituting with DEVOUR.

gaw said...

Sadly, I think people are just reading less these days, period.

Print sales are way down, newspapers are barely surviving, if that.

I personally have no time to read these days, and I use to be avid.

Young people that I work with seem barely literate at all, and I really doubt they could finish a thick novel, never mind a series. The only thing most of them read on any given day would be text messages from their friends, all 1 letter short forms from other barely literates. Proper spelling and sentence structure, let's just say they aren't priorities.

gaw said...

I do read a lot still, on the web. But when I show the pages I read to others, I can see their eyes glaze over. A site like Zero Hedge is way beyond their understanding, might as well be written in an alien language.

Even if they did read it, they don't really comprehend it. Most of the people at my work can't follow simple written instructions, and they are in a hgih tech industry supposedly full of smart people.

Maybe it's just that IQ levels have shrunk in the last 20 years or so, or I'm just cranky, but it seems to me the "average" person these days is barely smarter than a can of soup.

Chicken little said...

You also have to be able to understand what you read and be sure it is correct.

GAW--I just read that Canada is thinking of trying to tax wind power? Now, isn't the wind free? Or has Canada discovered how to control that? :-)

KNOW what you read and take the time to explore the FACTS. There is a new tv channel down here for 'old' people. COZY tv. I think almost every ad is a 'come on'. LIke " if you are on Medicare, call to get your FREE knee/back brace which will help your pain."

Can you imagine? They will convince people it is FREE for which they will bill Medicare an enormous rate for a brace (which will relieve pain, how?)

The amount of sheer graft and corruption advertised on tv is unbelievable and suckers in so many uninformed people that it is scary. Look at all the internet 'Universities' they advertise.

chicken little said...

With Japan deciding to take the currency war situation to a new high, I wonder what other countries may follow? Any ideas?

How long can one kick the can down the road before they collapse?

I keep reading articles where the 'government' knows what is best for me...yet a government that can't even take care of its own house wants me to trust IT to make decisions for my benefit?

Queenbee said...

Spam cleanup done. Also people can relate to sports and are busy with children and going out to dinner and movies. They have no desire for reality to creep into their cozy lives. Just don't touch my remote and I need to record 5 channels at once not just 2.

Queenbee said...

Talk about Contrary Indicator I didn't want to let StillWater run away from me and put in a bid below close on Tuesday. Of course it went straight down for the last two days. I think I will hold it this time as Platinum is still in short supply. If they just do half the changes that The Clinton Group (not Bill Clinton) mentioned it could hit 18-20. Best thing its main mining is done in Montana.