Wednesday, October 12, 2005

Pop and Fade

"The unfortunate thing about this world is that good habits are so much easier to give up than bad ones." - Somerset Maugham

Morning News of Note:
  • AAPL: Apple Booms, but iPod Disappoints Net More Than Quadruples On a 57% Gain in Revenue; Shares Fall After the Close Apple Computer Inc. said its quarterly profit more than quadrupled on a 57% increase in revenue, but sales of the company's iPod portable music players weren't strong enough to satisfy some investors, and Apple shares fell sharply in after-hours trading. Still, Apple emphasized that its financial performance was the strongest in its history. The Cupertino, Calif., company said net income for the fiscal fourth quarter ended Sept. 24 was $430 million, or 50 cents a share, up from $106 million, or 13 cents a share, a year earlier. (Full Story) WSJ
  • US Economy: Fed Gov Kohn says US core inflation pretty well behaved; unclear if globalization to keep damping inflation; globalization may affect Fed interest rate policy; expansion of China and India helps restrain US prices; stronger Chinese and India fx could add to US inflation; globalization doesnt impinge on US job creation; China can let CNY float or face higher inflation (Tuesday)
  • MDT: Medtronic-MDT boosts guidance for 2006-2008: Company sees FY06 EPS $2.18-$2.23 vs. consensus est of $2.16 and FY06 rev $11.1B-$11.6B vs consensus est of $11.49B, sees FY07 EPS $2.45-$2.55 vs. consensus est of $2.46 and FY07 rev $12.2B-$13.3B vs. consensus est of $12.99B, and sees FY08 EPS $2.78-$2.98 and FY08 rev $14B-$16B. MDT still targets 20% payout of earnings.
  • LCDs: Digitimes reports the average selling price of LCD monitors is expected to fall 5-10% this quarter, with certain branded companies already cutting their prices, according to monitor makers. According to the article, the ASP is expected to fall due to increasing panel supply, falling panel prices and promotions from monitor makers, the companies said. Supply of LCD panels continues to increase due to new capacity being ramped from panel makers, according to Taiwan-based monitor makers. In addition, iSuppli recently indicated that sales of monitor panels will flatten in the second half of this year and prices for 17- and 19-inch monitor panels will decrease in the fourth quarter.
  • MSFT YHOO: Sources: Microsoft, Yahoo Reach IM Deal Microsoft Corp. and Yahoo Inc. have agreed to make their two instant-messaging programs work together, a partnership that could threaten market leader America Online, people familiar with the situation said. The deal was expected to be announced early Wednesday, these people told The Associated Press. One of them works closely with Microsoft. The other was briefed on the deal. Both spoke on condition of anonymity because they were not authorized to disclose details. (Full Story) Washington Post

Market Comments: AAPL's numbers were disappointing, and the stock (and related stocks) is being sold. AMD reported what looked like good numbers, and it's stock is off big (-8%) also. MDT is higher on its upward earnings revisions. The bank index is getting a small bid this morning, and the SPX is currently rolling over and in jeopardy of erasing its early gains. Let's see if the recent trend of weak closes gets reversed today.

long MDT, MSFT


At 8:52 AM, Blogger Kevin Shuller said...

Re: AMD - I remember when having a blowout quarter and raising guidence was a good thing. It seems to me that Apple's dissapointment was confined totally to iPod shipments, which should only impact Sandisk and the like. Mac shipments and sales were greater than expected (one of those was mine), which should bode well for the PC biz. I don't see why AMD should get punished on a completely unrelated disappointment Apple doesn't even use AMD chips in their systems. Besides, as more people get fed up with Dell's well documented customer service problems, the computer makers that use AMD chips will be in a great position to gain.

Not long AMD


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