Trefis Week in Review
The Week in Review
Below is a summary of the activity on Trefis during the past week that we thought you would find interesting.
Insights from the Week
- With Apple Stock At All-Time Highs, Will Q4 Earnings Deliver?
- How Apple Gets To A $5 Trillion Valuation
- Weak iPhone 16 Sales Don’t Tell The Whole Story For Apple Stock
- Berkshire Dumped Apple, Then Why Should You Pay More For It And Get Less?
- Why Apple Stock Is A Safe Haven In An Uncertain Market
- Will Apple’s Q3 Results Get An AI Bump?
Technology Media & Telecom
- iPhone 4S Gets Thumbs Up in Consumer Report on November 11
Another notable thing was that Consumer Reports did not find any major issues with iPhone 4S battery life, scoring the phone “very good” in that category …
- Sina New Coverage: $50 Trefis Price Estimate on November 11
Baidu is around a $50 billion market cap company and Tencent is a $290 billion market cap while Sina’s market cap is more modest at about $5 billion …
To provide a perspective, eBay Marketplaces’ sequential revenue growth was essentially flat from Q1 2010 to Q3 2010 while it increased by almost 6% for Q4 2010 …
While still in a nascent stage, this partnership should pave the way for developing Facebook applications for subsidized, low-end phones, which might cost less than $50 …
Microsoft launched a new SQL Server 2012 database appliance with HP – the HP Enterprise Database Consolidation Appliance for SQL Server – which will compete with Oracle’s Exadata offering …
- Intel Updates: Market Share Gains Evident in Results on November 11
Intel is also reportedly looking to partner with Toyota for a joint research project on in vehicle entertainment. While interesting, we dont see this as a meaningful driver in the near term …
It is possible that the reduced orders, if true, may be related more to Apple pulling back its typical over-ordering of components to secure availability for the upcoming holiday season …
SAP’s chief executives have stated that SAP plans to focus on three key trends – mobile, big data and cloud computing – to drive growth in the coming years …
- Priceline Forex Losses, Floods Could Weigh on $588 Value on November 11
Priceline expects fourth quarter revenue to grow year-over-year by approximately 27% to 32%, slower than the 35% growth seen in the same period last year …
- China Telecom’s Planned US Entry Fraught with Risks on November 11
The growing Chinese-American population may help China Telecom build up demand, but a larger infrastructure play may run into problems with the U.S. federal government, which is wary of China …
By making the Kinect compatible with Windows 8, Microsoft will not only boost sales of the Kinect, but also provide consumers with yet another reason to buy Windows 8 …
The amount of money Groupon owes to its merchants continues to rise as it keeps expanding, with the working capital deficit being around $300 million by the end of Q3 2011 …
- Steve Jobs’ Final Victory: Adobe Abandons Flash on Mobile on November 11
Adobe doesn’t directly generate any significant revenues from Flash, but development tools for Flash, as part of Adobe’s Creative Software, account for a major portion of Adobe’s revenues …
- eBay Celeb Charity Auctions Could Help Boost Traffic on November 11
eBay does stand to gain in web traffic as users participating in the auction also end up searching for other celebrity-related merchandise separately …
- Shutterfly All Eyes on Q4: Revising Estimates on November 11
The focus is now on Q4, which is expected to be a breakout quarter for Shutterfly, generating higher revenues than the other three quarters combined …
- No Sprint, U.S. Cellular Gives iPhone the Stiff Arm on November 11
Clearly whatever U.S. Cellular is doing in terms of pushing its customers to adopt Android smartphones is working from a financial perspective …
- How Nokia’s Lumia Smartphone Will Fare in Developed Markets on November 10
Given Nokia’s reluctance to make Android phones and its growing affinity toward Windows platform lays some doubts on its future performance, particularly in the developed markets of North America and Europe …
ADP, the world’s largest payroll processor, reported strong revenue growth of 13% to $2.5 billion in its recent third quarter earnings …
We expect Android patent licensing to generate more than a billion dollars in revenue for Microsoft in 2012, but it will have only a marginal impact on Microsoft’s Trefis price estimate …
The advancements will allow SMBs access to “enterprise grade” IP phone systems with integrated collaboration capabilities without taxing already constrained IT and financial resources …
- Baidu Will Beam Higher as Chinese Internet Penetration Rises on November 10
The number of Internet users in China is growing at a rapid pace and the current low penetration of around 30% indicates a massive opportunity for Internet search players like Baidu …
We estimate that Symantec currently has around 18% share in the global storage software market, and expect it to increase marginally by the end of the forecast period …
We believe the company’s overhaul of its smartphone operating system from BlackBerry to QNX remains the only hope. We expect this migration to complete by early 2012 …
Following these two announcements and a broad market sell off following rumors of an Italian default, its stock tanked nearly 8%, but recovered marginally by the end of trading hours on Wednesday …
- Apple Only Vendor to Show U.S. Market Share Growth in Q3 on November 10
According to Comscore, Apple was the only top-five mobile phone company to have grown its U.S. mobile subscriber share in Q3 2011 to give it share of around 10% …
- AMD Cuts Headcount After Earnings Show Weak Sauce on November 10
The bad news was the weak sales figures that came as a result of the delays, something AMD insiders and investors are all too familiar with …
- How Will Time Warner Cable Combat Cord Cutting? on November 10
Time Warner has generally been able to implement increases in price without significant churn as it is a hassle to change internet service providers …
Continuing to drive innovation with smart meters as IBM prefers to call them, mixed with its industry leading analytics, makes Big Blue one of the most exciting companies to watch …
In its recent Q3 2011 results, AT&T reported a net addition of 176,000 U‑verse TV subscribers, taking the total count to 3.6 million …
Oracle will be able to make more resources than were previously available to RNOW, which should add to RNOW’s organic growth over time …
Recent initiatives include an extension of Kindle Reader’s reach into the Firefox Browser and Apple’s iPad, and a further expansion of Amazon’s Prime Instant videos …
Though the ‘Big Data’ phenomenon seems to have gained popularity only after the launch of cloud services, in reality, some aspects of this emerging trend are not new …
- CBS Fuels Margins With Licensing Deals, $33.50 Estimate on November 9
The company has continued with this trend of improving margins since last year, and consequently seems to have positioned itself strongly in eyes of its investors …
This move is simply a band-aid that we expect to help out marginally in that it could lower the traffic acquisition costs (TAC) of these businesses and provide a compelling sales pitch to advertisers …
With Business One, Business ByDesign, and its traditional SAP ERP offering, SAP now offers ERP solutions in all forms – on-premise & on-demand for small, medium and large enterprises …
- SAP Goes After Big Data with Hadoop Integration on November 9
With this upgrade, it is targeting the growing market for big data and analytics. Sybase IQ now includes a native MapReduce API, and also offers integration with Hadoop …
Recently reported earnings however showed that its underlying business momentum is robust despite severe headwinds from the European debt crisis …
While growth in its cable networks looked solid, the NBCUniversal’s broadcasting division posted flat growth in its ad revenues and was noticeable weak …
Greater visibility and numerous product upgrades have certainly helped LinkedIn in keeping user adoption high with its members growing to over 130 million by the end of Q3 2011 …
Apple notes that the new phone beats out its predecessor by one hour of 3G talk time, yet falls 100 hours shorter when it comes to standby …
- Nvidia Earnings Preview: What We’re Watching Thursday on November 8
Given that Western Europe and the U.S. are facing sluggish economy, the question that emerges is will Nvidia’s upcoming Q3 2011 results suffer …
NetApp’s new partnership comes clearly as a response to the one struck in May between rival EMC and MapR Technologies as the race to capture the big data market is on …
- Sprint Taps Bond Market, May Help Fund Ailing Clearwire on November 8
Sprint announced that it had come to an agreement with Clearwire in order to help roll out Clearwire’s own 4G LTE network that Sprint’s subscribers will be able to use …
- Motorola Mobility Gets Lift from Patent Win Against Apple & Announces Android-based TV Controller on November 8
According to the report, the ruling should not impact Apple’s sales in Germany as the company sells all its product there through a local subsidiary, which was not covered by the injunction …
Last week brought Dell’s mobile ambitions some good news as its Android-based Streak 5 tablet received approval from the Department of Defense (DoD) for use on its secure networks …
- iPhone 4S Prospects Light up Apple’s Holiday Season on November 8
The resoundingly positive response for Apple’s iPhone 4S is starting to pay off as a recent report suggests that the 4S was the best-selling smartphone in October …
The increased use of high speed LTE smartphones should encourage consumers to use Internet on their smartphones, thereby benefiting AT&T through increased data revenues and higher margins …
CEO Mary Dillon said that the carrier had the opportunity to sell the iPhone but that Apple’s “terms were unacceptable from a risk and profitability standpoint” …
- Weak Economy Weighs on OpenTable’s Growth & Stock Upside on November 7
While OpenTable increased its North American restaurant customer base from 15,560 to 16,237 over the quarter, it actually showed a decline in its net income for the period by more than 35% …
- Cisco Q1 Preview: What We’re Watching Wednesday on November 7
And while the crisis in Europe sustained throughout the quarter resulting in jitters across global markets, major spending cuts by the U.S. government haven’t really been there …
- Confidence Grows for AOL’s Display Ad Business on November 7
AOL’s pre-Q3 market price was already reflecting the expected declines in these 2 operating segments given competition continues to keep AOL restricted to a single-digit market share in the search segment …
- Yahoo Inches Towards Sale Amid Leadership Squabbles on November 7
Yahoo’s board, which had remained relatively silent until recently, has suddenly sprung out a number of “alternative” plans, which even includes a one-time dividend to shareholders by selling off Yahoo’s Asian assets …
- Nokia Lays Out Plans to Woo ‘Smartphone Virgins’ on November 7
Nokia’s U.S. head, Chris Weber, said that Nokia is working towards creating a relationship with the network operators that doesn’t eat into their Apple and Android sales …
- China Mobile Results Show Subscriber Additions Continue on November 7
China Mobile announced its Q3 data recently stating that revenues have grown from $52 billion for the first 9 months of 2010 to $59 billion during the same period in 2011 …
- Amazon buys second largest online bookseller in U.K. on November 6
The deal came under harsh criticism from industry organizations, claiming it would give Amazon an unfair stranglehold on the U.K. book market …
(Trefis Pro Exclusive) Consumer, Retail, & Automotive
- Zipcar Udpates: Hitting the Streets of Los Angeles on November 11
Zipcar’s business model has demonstrated impressive profitability in its large and established metropolitan markets of Boston, New York City, San Francisco and Washington …
Urban had registered a decline of 4.7% in its gross margins last quarter primarily due to increased merchandise markdowns to clear piling inventory …
- Coca-Cola Fair Value $75: Pushing Further into Rural India on November 11
The beverage giant is very bullish on India as it sees the scarcely penetrated rural market and quickly growing middle class as the key drivers for growth …
- Starbucks Doubles Down on Growth After Solid Results on November 11
Starbucks reported solid performance last week with global comparable store sales increasing 9% and operating margin witnessing an increase of 70 bps over Q4 2010 …
China power-grid giants – China Southern Grid and State Grid – can throw a wrench in these plans by insisting on battery swap as a principal operation mode in support of the country’s efforts in vehicle electrification …
According to a study from IHL Group, more than 2.7 million tablet devices will be shipped for use in North American retail and hospitality by 2015, an astronomical increase of 450% over current rates …
- Starbucks Goes Blonde to Attract Light Coffee Drinkers on November 10
According to Starbucks’ own consumer research, it is offering light-bodied coffee to meet the needs of 40 percent of American coffee drinkers, representing 54 million people …
With slower-than-expected pace of recovery and worsening profitability, Avon Products posted disappointing 3Q results, missing targets by a wide margin …
- Home Depot, Lowe’s Show Strength Despite Weak Market on November 10
Both home improvement retailers can take some comfort from a recent survey that showed 68% of Americans plan to spend $1,000 on their homes in the next six months …
- GameStop Facing Challenges and Opportunities to Reach $34 on November 10
The company recently purchased Kongregate and PC game distribution platform Impulse to increase its online presence. These two platforms currently produce a small percentage of GameStop’s sales …
- Best Buy Focuses on U.S. Stores, Mobile Sales on November 10
With 10% of the company’s value coming from the Mobile Phone Stores division according to Trefis estimates, the company correctly views this as an important area for potential growth …
- Is Japanese Automakers’ Pain the Big Three’s Gain? on November 10
The setback gives General Motors, Ford and Chrysler an opportunity to consolidate gains in market share this year at the expense of the Japanese producers …
With this deal, P&G will be out of the food business, but this delay means the company will still have to operate in the market while undergoing its planned restructuring …
- Stock Swap Increases Pepsi’s Competitiveness in China on November 9
Under the agreement, Tingyi-Asahi will become PepsiCo’s franchise bottler in China for carbonated soft drinks and Gatorade, as well as co-branding some products under the Tropicana label …
This adds fuel to concerns over decelerating U.S. auto sales that weighed on sentiment last week after Ford reported 6 percent year-over-year sales growth in U.S. in October that missed analyst expectations …
- MGM Lacks Macau Growth of Peers as Earnings Stall in Q3 on November 9
Despite a recovery in Las Vegas gaming market, MGM’s casino revenues related to its wholly owned domestic resorts witnessed a decrease of 2% compared to Q3 2010 …
Frito-Lay, the most valuable business division of PepsiCo, is continuing to see growth with the company reporting 8% growth in worldwide snacks volume in Q3 2011 compared to same period previous year …
- Could GM Deal be Google Apps’ Pivotal Moment? on November 9
While the deal itself is big, what is more important is the precedent it can set for other large firms to adopt cloud-based application software, threatening traditional players …
- Revlon Results Support $16 Value Led by US Growth on November 9
While it is performing relatively better in the U.S, its market share continued to decline in international markets. Also, given Revlon’s heavy indebtedness, we’re still very cautious with regards to its course of action …
MinuteClinics, that are featured at CVS pharmacy locations, help in driving up prescription filling rates at the corresponding pharmacies and increase the ability to cross-sell other front-end products …
Honda’s revenues from automobiles increased by more than 13% q-o-q, as it was able to emerge from the effect of Japan earthquake and expand its production capacity …
The big question ahead of the earnings is whether or not Ralph Lauren will be able to maintain its international growth, which was the primary reason behind its stock’s over 25% surge since last quarter …
That survey is in line with another survey by the National Retail Federation that found the average shopper is planning to do approximately 36% of his or her shopping online this season, up from 32.7% last year …
- Toyota Earnings Preview: What We’re Watching Tuesday on November 7
Toyota’s production levels can drop again as Thailand floods will affect their facilities in the country and disrupt their auto-parts supply chain again …
Faced with cigarettes sales volume decline, Altria has announced the new cost reduction program primarily focusing on cigarette-related infrastructure costs …
Electronic Arts beat estimates with solid Q2 earnings release, hinging primarily on strong sales of FIFA 12 and digital gaming gains …
GM stock declined by almost 11% last week amid a spate of negative economic news and as the company reported lower than expected sales growth in U.S. in October …
With the all important holiday season up next, Coach has prepped its strategy from the upgraded product portfolios to a powerful marketing campaign …
According to Trefis analysis LVS’ Macau operations comprise the most significant factor driving the company’s share price, making up 54.9% of its valuation …
(Trefis Pro Exclusive) Financial Services
CEO Richard Fairbank told analysts on a conference call that management believes the period of shrinking loans through the recession has come to an end …
- Discover Bets on NFC-Enabled iPhone Attachment on November 11
The attachment, which will be compatible with both the iPhone 4 and iPhone 4S, will enable users to tap for payment wherever Zip is accepted …
Last month, the company reported a 13% increase in net income from operations to $1.24 billion compared to the prior year quarter …
Interest rate swaps make up the biggest portion of the over-the-counter derivatives market and its size is estimated to be about $480 trillion ,,,
- UBS Weekly Review: Tough Times for European Banks on November 11
With markets in Europe showing a significant fall in prices for a second consecutive day, it looks like UBS’s stock will shed more value in the next few days with the global focus now shifting to Italy from Greece …
Goldman, which reported only its second ever quarterly loss in Q3 2011, also went to the extent of declaring in the filing that there is a possibility of lawsuits from 3 financial firms in the near future …
Nerves at the Wall Street were stretched again yesterday with rising yield rates on Italian bonds unleashing a fresh round of fear about a worsening debt scenario in Europe …
- Bank of America Settles Debit-Card Overdraft Lawsuit on November 10
Earlier this week, Bank of America’s $410 million settlement for all lawsuits related to excess debit card overdraft fees was cleared by U.S. District Judge James Lawrence King …
- BlackRock Gets Thumped by Italy, Stock Cautiously Recovers on November 10
Fears that the debt crisis of Europe has plagued its major economy Italy, and the anxiety about increased potential risks to world economy were palpable as stocks plummeted …
MetLife Bank made about $4.4 billion of residential home loans in the first quarter of 2011, accounting for 1.5% of total mortgage originations …
The company recently announced the acquisition of Compliance 11, Inc. and also showed some interest in buying a part of, now bankrupt, MF Global, which clearly shows its appetite for growth …
- Strong Trading Volumes Lift NYSE Earnings on November 10
Its net income increased by 56% in the third quarter of 2011 to $200 million from $128 million in the third quarter of 2010 driven by high market volatility and strong trading volumes …
While the regulation seeks to ensure that bigger banks are better protected from failing, there is also a fear of banks hiding data about their actual risk levels in order to avoid higher surcharges …
The talks could be heating up again according to some recent reports, and with cheap prices and guarantees (reportedly) against loan losses from the Spanish government, the timing may be just right …
Goldman seems to be getting ready to sell a chunk of its stake in Industrial and Commercial Bank of China (ICBC) in an attempt to raise some quick cash …
- Citigroup Hopes for Settlement with SEC in Court Today on November 9
The lawsuit was filed when various investors alleged that Citigroup had sold them toxic mortgage-backed securities which the bank had already bet against …
AIG posted a loss of more than $4 billion in the third quarter as it took impairment charges on its aircraft fleet and its stake in Asian life insurer AIA …
- BNY Mellon Cleared to Sell Shareowner Services Business on November 8
BNY Mellon received the green signal from U.S. regulators to proceed with the sale of its Shareowner Services business to Computershare over the weekend …
- Coutts Settlement to Cost RBS $10 Million on November 8
RBS will end up shelling out £6.3 million ($10 million) as a fine for the improper sale of bonds by its private banking and wealth management business, Coutts …
- JPMorgan Accused of Complicity in Madoff Scheme on November 8
In the lawsuit, investors allege that all their money was channeled through a JPMorgan account referred to as “the 703 account,” and irregularities in this account should have been caught by the bank …
The Volcker rule, which was officially released to the public for comments last month intends to disallow such investments, often referring to these activities as “gambling” with shareholder money …
- Visa and MasterCard Battle Price-Fixing Litigations on November 7
According to MasterCard, it is not possible to put an upper limit on this loss due to the significantly higher demand by the class plaintiffs, which are not acceptable to the company …
- MasterCard Gets Lift from Transaction Volumes Growth on November 7
The nearly 14% volume growth in the U.S. was not expected because of persistently high unemployment rates and weak consumer sentiment …
(Trefis Pro Exclusive) Energy & Natural Resources
- Kinder Morgan Plans to Invest $400M in a JV on November 11
The first phase of the development consists of building 52 storage tanks with a total capacity to handle 6.6 million barrels of residual fuel and black oils …
- Trade War Adds to Suntech’s Woes But Outlook Solid on November 11
The move comes on the back of a complaint by a group of American solar manufacturers led by SolarWorld that Chinese firms such as Suntech Power and Trina Solar received undue advantages …
The results posted by the company a few days were very strong, with Q3 profit and revenues rising more than 100 percent on a y-o-y basis …
Chesapeake posted a 9 percent increase in production levels over the previous quarter in its Q3 earnings, and the company continues its investment in the development of new wells and technologies …
Anadarko’s operational results continued to remain on track and the company managed to increase its year on year sales by 5% and boosted liquids output by 10% …
After starting a $30 billion disposal program last year, it was clear to management and investors that the company would have to get smaller in the near term to allow for growth in the long term …
(Trefis Pro Exclusive) Basic Materials
- Silver Wheaton: Q3 Earnings Mixed, New Dividend Policy on November 11
The company recently released its third quarter earnings, posting a modest increase in overall silver equivalent ounces sold and a huge jump in net earnings over Q3 2010 …
- Barrick Gold Solid Results Underlie $59 Stock Value on November 11
The company is moving aggressively toward developing its planned projects and new discoveries to take advantage of the still-buoyant gold price …
- DuPont Invests in Kevlar to Make $58 Value Bullet Proof on November 10
Kevlar brand fiber combines high strength with light weight to help dramatically improve the performance of a variety of consumer and industrial products like protective gear, gloves, vests, tires and fiber-optic cables …
- Alcoa’s Smelter Upgrades Investment Could Reduce Costs on November 9
he five-year project will cut costs at three smelters by 13 percent, ramping up the average productivity of about 1 million tons of aluminum per year by another 120,000 tons per year …
- ArcelorMittal Worth $22 Despite Earnings Dip in Europe on November 8
ArcelorMittal recently released its third quarter earnings, highlighting a drop in sales in the European region and the need to develop a raw material resource base …
Putting a damper on these strong earnings was the announcement that the company has lowered its production outlook at some of its mines for 2011 …
- Silver Wheaton Earnings Wednesday: What We’re Watching on November 7
Silver has seen extreme volatility in the past six months, ranging from a high of $48 per ounce, to a low of $27 per ounce in September …
(Trefis Pro Exclusive) Industrials & Transportation
- Alaska Air Playing Long-Game with Biofuel Investment on November 11
The airline will operate 75 commercial flights with a blend of regular jet fuel and 20% biofuel, hoping to spur on development of the experimental technology and eventually reduce its dependence on CO2-emitting fossil fuels …
- Dow Worth $38 on Emerging Markets & Agricultural Demand on November 11
Dow recently announced its Q3 earnings results that showed impressive revenue growth of 17 percent year over year (yoy), in part supported by price increases of 17 percent …
Unfortunately for American Airlines they are sorely lacking compared to competitors in one critical area, so much so it may require a serious look at some of AMR’s less profitable routes …
The predicted 6% increase in holiday deliveries will be driven by a flurry of last-minute online shopping, and with domestic operating margins up 13.1% it should bring good tidings for investors …
Despite the macro-economic headwinds, Corning registered net income of $811 million in Q3 2011, up 3% y-o-y while net sales increased 30% y-o-y to $2.07 billion …
The parties have a month to reach a consensus, and if they don’t, they will be free to exercise ‘self-help’ after the 30-day period ends December 6 …
Thanks to global growth and supply chain upgrades, UPS reported a 5% increase in its net income to over $1 billion in its latest quarterly results …
Caterpillar stock has been under pressure since the beginning of last week despite encouraging news of new facilities, orders and completed acquisitions from the company …
United Continental announced plans to launch service on several new international routes in the first half of 2012 yesterday in an attempt to leverage the expanded route network following the merger …
GE has started to recover from the economic crisis which greatly impacted its operations in the U.S., where it is the largest supplier of energy-related equipment …
American witnessed just over a 1% decline in the October passenger traffic with system capacity down 0.7% on a year-over-year basis …
The carrier reported higher year-over-year October traffic and made progress in its integration with AirTran after it secured an agreement for the pilot’s seniority integration …
The latest report by the Association of American Railroads, released on November 3, shows continued improvements in rail traffic in October 2011 with the highest weekly carload average of any month …
The capacity cuts implemented during October, resulted in fuller planes on the domestic routes with 1.3% higher occupancy, y-o-y …