360° Coverage : Samsung Guidance Changes Apple Earnings Battle Plan

2 Updates

Samsung Guidance Changes Apple Earnings Battle Plan

Jan 24 2014, 11:33am CST | by

Apple will report earnings after the market close on Monday January 27.  My battle plan has changed after Samsung just provided weak guidance. Fourth quarter results for Samsung were mostly in line...

Filed under: news

 
 
 

39 weeks ago

Samsung Guidance Changes Apple Earnings Battle Plan

Jan 24 2014, 11:33am CST | by

Apple will report earnings after the market close on Monday January 27.  My battle plan has changed after Samsung just provided weak guidance.

Fourth quarter results for Samsung were mostly in line. Earnings came at 8.3 trillion won and revenues came at 59.7 trillion won.  In Seoul South Korea, Samsung shares traded up 1.2%.  Of concern is that for 2014 Samsung expects competition to intensify and sees weaker demand for mobile devices in the current quarter.

The increased competition Samsung sees is mostly coming from Apple and Lenovo (LNVGF).  My read of Samsung report is that it is likely good for Apple in the very short-term but bad for Apple in the medium-term.

For Apple, average Q1 analysts’ estimate is $14.09; the low estimate is $13.49 and the high is $15.24.  For revenue, the average analysts’ estimate for revenue is $57.46 billion; the low estimate is $55.93 billion and the high estimate is $59.88 billion.

More than the earnings, the three critical numbers to look for are number of iPhone sales, gross margins, and any indication of China Mobile iPhone sales.

iPhone sales numbers are important because even though Apple sells many products, iPhones account for about three quarters of profits.  Estimates of iPhone sales hover around 55 million units.  Regarding China Mobile, if my information from sources in China is correct, the street will be disappointed.  Apple may simply choose not to divulge any data about China Mobile sales.

The big potential surprise will be if Apple announces an additional stock buyback.  Activist investor Carl Icahn has been demanding $50 billion of additional share repurchases.

Apple usually does not announce new products with earnings, but the possibility of an indication of new products cannot be ruled out. If Apple announces a major stock buyback or gives indication of new products in a new category, Apple stock can easily move to the range of $610 to $620.  This will been an opportunity to lighten up on an Apple position.

If the report is in line, Apple stock is likely to stay range bound in the zone of $535 to $565.

If there is a big miss in iPhone sales, or gross margins are significantly lower than 36.5%, expect a sell-off to about $500.  Such a sell-off is likely to be a buying opportunity for the long-term investor.

Follow me here, write me at Nigam@TheAroraReport.com or find me at The Arora Report

Disclosure: Subscribers to The Arora Report have a long position in Apple.

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforc ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

8 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double trag ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IS abducts Iraqi journalists as its positions get bombed (Roundup)
Baghdad/Paris, Oct 24 (IANS) The Islamic State (IS) terrorist group Friday kidnapped three Iraqi reporters in the northern Iraqi city of Mosul even as French fighter jets and Iraqi military helicopters bombed its positions in northern Iraq.
 
 
Ethiopia to deploy 210 health workers in Ebola-hit West Africa
Addis Ababa, Oct 24 (IANS) Ethiopia said Friday it will deploy about 210 health professionals to Ebola-affected countries to support the response against the epidemic in West Africa.
 
 
China offers new anti-Ebola aid to West Africa
Beijing, Oct 24 (IANS) China will provide 500 million yuan (about $82 million) in aid to Liberia, Sierra Leone, Guinea and international organisations to fight the Ebola virus disease, Chinese President Xi Jinping said Friday.
 
 
India, China form Asian Infra Investment Bank
Beijing, Oct 24 (IANS) India Friday signed on to a China-led initiative to create an international bank to fund development of infrastructure essential for Asia's economic growth and reduce the dependence on Western-dominated World Bank and International Monetary Fund.
 
 
 

Latest from the Network

Second MERS case reported in Qatar
Doha, Oct 23 (IANS) A 43-year-old man in Qatar has tested positive for Middle East Respiratory Syndrome (MERS) in the second confirmed case of the deadly virus in 10 days, media reported Thursday. The patient had...
Read more on Business Balla
 
Two people die in Pakistan bomb blast
Islamabad, Oct 23 (IANS) At least two people were killed and 12 others injured in an explosion that took place in Pakistan's Balochistan province Thursday, media reported. The bomb was planted on a motorcycle, Dawn...
Read more on Politics Balla
 
Trott extends contract with Warwickshire till 2017
London, Oct 23 (IANS) England batsman Jonathan Trott, whose mental issues led to his abrupt departure from last winter's Ashes tour, has confirmed his successful comeback to competitive cricket by signing a new three-...
Read more on Sport Balla
 
Srikanth, Kashyap big movers in BWF rankings
Kuala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest Badminton World Federation (BWF) rankings released Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Alvin Stardust dead
London, Oct 23 (IANS) English singer Alvin Stardust died after a short illness. He was 72. Stardust's manager confirmed the news about his demise Thursday, reports mirror.co.uk. He was recently diagnosed with...
Read more on Celebrity Balla
 
Indian man reunited with family after 40 years
Dubai, Oct 23 (IANS) An Indian man, who had disappeared from his hometown in Kerala nearly 40 years ago, has been found by his family at a hospital in Dubai in the UAE, a newspaper report said. Now in his 60s, Abdulla...
Read more on Politics Balla
 
Srikanth, Kashyap, Saina rise in world rankings
Kala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest released Badminton World Federation (BWF) rankings Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Flintoff signs for Big Bash side Brisbane Heat
Brisbane, Oct 23 (IANS) Former England captain and all-rounder Andrew Flintoff, who retired from international cricket in 2009, Wednesday confirmed that he will play for Brisbane Heat in the Big Bash League (BBL) this...
Read more on Sport Balla
 
OPEC daily basket price falls again
Vienna, Oct 23 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $81.94 a barrel Wednesday compared to $82.09 Tuesday, the OPEC Secretariat said. The new OPEC...
Read more on Business Balla
 
Lopez to sign multi-million dollar deal?
Los Angeles, Oct 23 (IANS) Singer-actress Jennifer Lopez is reportedly in the final stages of securing a multi-million dollar deal to perform in Las Vegas. The 45-year-old is being offered $350,000 per show at The...
Read more on Celebrity Balla