#PreMarket Primer: Tuesday, January 28: Apple's Earnings Take The Shine Off Share Prices
Apple shares dipped overnight after the company revealed lower than expected holiday iPhone sales and a disappointing revenue forecast.
Most were expecting Apple to post incredible figures after the company signed a long awaited deal with China Mobile, the world’s largest wireless carrier. However, Apple’s expectations for its March quarter, when the results of the China Mobile deal should be evident, were lackluster.
Moving forward, most are hoping Apple has a new revolutionary product in the works for 2014 to help boost the company’s value. Rumors have centered around a smart watch or TV device, but nothing has been announced.
In other news around the markets:
- On Tuesday, the Reserve Bank of India raised its main interest rate by 25 basis points on the expectation of continued high consumer price index inflation. The bank said if its projections are correct, it does not anticipate any further tightening in the near term.
- A Wall Street Journal and NBC News poll found that Americans are becoming increasingly worried about President Barack Obama’s abilities and the nation’s future. Obama is set to announce his 2014 agenda on Tuesday night, which is expected to fall in line with the issues supported by the majority of the public.
- Turkey’s central bank called an emergency meeting on Tuesday in response to the nation’s crumbling currency. The bank will attempt to avoid a destabilizing crisis as investors pull their money out of risky assets.
- On Monday, Liberty Global made a deal to acquire Ziggo NV for 6.9 billion euros. The two companies had been in talks since August and Ziggo said it rejected a takeover offer back in November, but that the two would continue to negotiate.
Asian markets steadied on Tuesday after a steep fall on Monday. The Japanese NIKKEI was down 0.17 percent but China’s Shanghai composite was up 0.26 percent and the Shenzhen composite was up 0.21 percent. The South Korean KOSPI rose 0.34 percent and Indonesia’s JSX composite was up 0.44 percent.
European markets were up across the board, the UK’s FTSE was up 0.33 percent and the eurozone’s STOXX 600 gained 0.70 percent. The German DAX was up 0.69 percent and France’s CAC 50 rose 0.76 percent.
Energy futures were higher, Brent futures for March delivery was up 0.46 percent and WTI futures gained 0.43 percent. Gold lost 0.85 percent and silver was down 0.42 percent. Industrial metals were mostly lower with tin posting the largest loss, down 0.91 percent.
The euro lost some ground against the dollar and fell to $1.3637 and the pound fell 0.23 percent against the dollar. The dollar gained 0.53 percent against the yen and lost 0.70 percent against the Australian dollar.
Notable earnings released on Monday included:
- Apple Inc. (NASDAQ: AAPL) reported first quarter EPS of $14.50 on revenue of $57.60 billion, compared to last year's EPS of $13.81 on revenue of $54.51 billion.
- Seagate Technology (NASDAQ: STX) reported second quarter EPS of $1.32 on revenue of $3.53 billion, compared to last year's EPS of $1.38 on revenue of $3.67 billion.
- Ashland Inc. (NYSE: ASH) reported first quarter EPS of $1.42, compared to last year's EPS of $1.12 on revenue of $1.87 billion.
Stocks moving in the Premarket included:
- Carnival Corp (NYSE: CCL) gained 3.45 in premarket trade after releasing better than expected earnings on Monday.
- Cliffs Natural Resources Inc. (NYSE: CLF) rose 2.06 percent in premarket trade after falling 13.51 percent over the past week.
- Ford Motor Co. (NYSE: F) was up 1.59 percent in premarket trade after losing 4.90 percent over the past five days.
- Citigroup (NYSE: C) gained 1.21 percent in premarket trade after falling 1.05 percent on Monday
- General Electric Co. (NYSE: GE) was up 0.80 percent in premarket trade after losing 5.68 percent over the past week.
Notable earnings releases expected on Tuesday include:
- Ford Motor Company (NYSE: F) is expected to report fourth quarter EPS of $0.28 on revenue of $35.15 billion, compared to last year’s EPS of $0.31 on revenue of $34.50 billion.
- Comcast Corporation (NASDAQ: CMCSA) is expected to report fourth quarter EPS of $0.68 on revenue of $16.62 billion, compared to last year’s EPS of $0.52 on revenue of $15.94 billion.
- Danaher Corporation (NYSE: DHR) is expected to report fourth quarter EPS of $0.95 on revenue of $5.20 billion, compared to last year’s EPS of $0.87 on revenue of $4.98 billion.
- AK Steel Holding Corporation (NYSE: AKS) is expected to report fourth quarter EPS of $0.02 on revenue of $1.44 billion, compared to last year’s loss of $0.30 on revenue of $1.42 billion.
- E.I. du Pont de Nemours and Company (NYSE: DD) is expected to report fourth quarter EPS of $0.55 on revenue of $7.78 billion compared to last year’s EPS of $0.11 on revenue of $7.32 billion.
Tuesday’s economic calendar will be packed with US data including, crude stockpiles, consumer confidence, and durable goods orders. Other notable economic releases include, British GDP, Italian consumer confidence, and French consumer confidence.
For a recap of Monday’s market action, click here.
Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.
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