Apple and Amazon miss Street estimates

Apple shares are briefly halted. Earnings are lower than expected; iPad sales disappoint. Amazon sales also disappoint. Stocks rebound after Fitch Ratings denies it plans a U.S. debt downgrade. Pending home sales slip.

By Charley Blaine Oct 25, 2012 12:57PM
Charley BlaineUpdated: 6:07 p.m. ET

Apple (AAPL) shares briefly fell below $600 after hours as the company's earnings of $8.67 a share missed Wall Street estimates of $8.75. The issue seems to be a shortfall of iPad production. Revenue was up 27% to $35.97 billion, slightly ahead of estimates.

The shares had fallen $7.29 to $609.54 in regular trading and fell to as low as $597 after hours -- trading was briefly halted -- before rebounding to $607.75, down $1.79, at 6:07 p.m. ET. Apple hasn't closed below $600 since July 30. Apple shipped 26.9 million iPhones in its fiscal fourth quarter, a bit more than expected, but iPad shipments were 14 million, lower than expected.

Amazon.com
(AMZN) shares were down as much as $20 after hours before buying brought the stock back to $220, down from a regular close of $222.92. The company reported a revenue miss and a larger-than-expected earnings loss.

The results came after stocks moved modestly higher today, breaking a two-day losing streak as earnings from energy and health care companies gave the market a boost. But the Apple and Amazon results seem certain to weigh on stocks on Friday.

The  Dow Jones industrials ($INDU) closed up 26 points to 13,104; the blue chips had been up as many as 87 points early in the day. The Standard & Poor's 500 Index ($INX) gained 4 points to 1,413, while the Nasdaq Composite Index ($COMPX) was up 4 points to 2,986. The Nasdaq-100 Index ($NDX) climbed 2 points to 2,658.

Article continues below.
Earnings from Procter & Gamble (PG) and interest in the release of Microsoft's Windows 8 operating system were offset by weakness in Boeing (BA) as well as Apple and Amazon.com. Microsoft (MSFT) dropped 2 cents to $27.88. (Microsoft is the publisher of MSN Money.)

A lackluster report from Apple
Apple normally blasts past analyst estimates. But today's results were only good. The 26.9 million iPhone shipments were up 58% from a year ago and ahead of estimates. The iPad shipments, while up 26% from a year ago, were below the 15 million to 16 million units expected.

Macintosh computer shipments were up 1% to 4.9 million units. IPod shipments fell 19% to just 5.3 million units.

The company expects $52.6 billion in revenue for the all-important fiscal first quarter, which includes the holiday season.

With the regular close of $609.54, Apple is off 13.2% from its closing peak of $702.10 on Sept. 19.

Amazon: Trying to get as close to break-even as possible
Amazon shares were down only 94 cents before the earnings release came out.

The company continued to invest in new fulfillment centers and new operating technologies at the expense of profits.

"Our approach is to work hard to charge less. Sell devices near break-even, and you can pack a lot of sophisticated hardware into a very low price point," CEO Jeff Bezos said in a statement.

While the company did not cite the global economy, it projected $20.5 billion to $22.75 billion in revenue, lower than the Street estimate is $22.8 billion. Its operating loss could be as much as $490 million; the upper end of the range was a profit of $310 million. Operating income in the year-ago fourth quarter was $260 million.

Amazon lost $274 million, or 60 cents a share, in the third quarter, down from a profit of $63 million, or 14 cents a share. Stripping out a one-time charge for its LivingSocial business produced an adjusted loss of 23 cents. Wall Street had expected  8 cents.

Revenue was up 27% to $13.8 billion. Wall Street had expected $13.92 billion.

Market struggles to get past a rumor
The market opened strongly but spent most of the day around break-even on a rumor that Fitch Ratings would be downgrading U.S. debt. That took the Dow from a gain of about 30 points to a loss of 37 points in a matter of minutes. But a Fitch spokesman told Bloomberg News and CNBC that the agency doesn't expect to address the nation's debt rating until late 2013.

A second problem weighed on markets: Americans signed fewer contracts than forecast in August to buy previously owned homes. European stocks were lower, and the dollar was rising against the euro.

Separately, Bloomberg News reported this afternoon that Apple may launch an Internet radio service in the first quarter of 2013. Pandora Media (P) and Sirius XM Radio (SIRI) were both lower.

P&G's turnaround plan may be working
Procter & Gamble was up $1.99 to $70.07. The consumer-products giant said fiscal-first-quarter profits fell 7% on a stronger dollar and costs related to restructuring. The results, however, beat Street expectations in a sign that a turnaround plan that it started in the spring is beginning to work.

P&G announced a plan to focus on its 40 top businesses, 20 biggest new products and 10 most profitable emerging markets as it undergoes a cost-cutting plan aimed at saving $10 billion by fiscal 2016.


The maker of Tide detergent and Pampers diapers said today that it's ahead of schedule with its planned job cuts, and that it might consider going beyond its $10 billion cost-cutting plan.


P&G was the top performer among the 30 Dow stocks. Boeing, Travelers Companies (TRV) and Home Depot (HD) were the big weights on the index. 


Energy prices -- New York close



Thur.     Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$86.05

$85.73

-6.66%

-12.93%
(per barrel)











Heating oil (-HO)

$3.0452

$3.0264

-3.61%

4.50%
(per gallon)











Natural gas (-NG)

$3.4340

$3.4500

3.43%

14.89%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6323

$2.5913

-9.86%

-0.94%
(per gallon)











Brent crude 

$108.49

$107.85

-1.50%

1.03%
(per barrel)











Retail gasoline

$3.5990

$3.6250

-4.96%

9.86%
(per gallon; AAA)












Pending home sales slip
Housing stocks tumbled after the National Association of Realtors' Pending Home Sales Index fell 2.6% to 99.2 in August from July, when the index hit a revised 101.9. That was the highest level since April 2010.

But the index was still up 10.7% in August over August 2011.

PulteGroup (PHM) was off 44 cents to $17.01. D.R. Horton (DHI) fell 30 cents to $21.11.

The report came after a Wednesday report showing a big jump in new-home sales in September.

The home-sales report was one of two disappointing economic reports. The other was a decline in durable-goods orders. The day's good news: The Labor Department reported a decline in jobless claims for the latest week.

Best Buy slumps on earnings warning
Best Buy
(BBY) retreated $1.75 to $15.17. The retailer, resisting a takeover attempt by its founder, said fiscal-third-quarter profit will be "significantly" below last year’s results as sales at established stores continue to decline.

Cliffs Natural Resources (CLF) declined $4.49 to $38.20. The largest U.S. iron-ore producer reported third-quarter results that missed analysts’ estimates as the price of the steelmaking raw material dropped.

Among other earnings:

Casino companies rallied as Wynn Resorts (WYNN) added $8.14 to $120.43. Earnings for the  owner of casinos in Nevada and Macau beat forecasts and the company doubled its dividend. MGM Resorts International (MGM) rose 24 cents to $10.88. Las Vegas Sands (LVS) increased $1.96 to $46.25.

Symantec
(SYMC) climbed $1.16 to $18.54. The security-software maker forecast sales that topped projections. Symantec is doing a better job now at signing up customers at a time of sluggish spending by corporations and weak personal-computer sales, analyst Daniel Ives of FBR Capital Markets told Bloomberg News.

Akamai Technologies (AKAM) surged $2.43 to $38.54. The company, which helps businesses deliver data more quickly over the Internet, reported that sales and earnings beat estimates. Akamai was also raised to "outperform" from "market perform," with a $90 target price, by Oppenheimer analyst Timothy Horan.

ConocoPhillips (COP) gained $1.21 to $57.16. The oil-and-gas producer said profit excluding one-time costs and gains was $1.44 a share, 25 cents better than the Street estimate.

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1100%

0.110%

22.22%

1000.00%
5-year Treasury note 

0.819%

0.748%

30.00%

-1.33%
10-year Treasury note

1.828%

1.775%

11.67%

-2.30%
30-year Treasury bond

2.981%

2.933%

-1.68%

3.18%
Currencies











U.S. Dollar Index

80.118

80.015

0.12%

-0.50%
British pound

1.6124

1.6044

-0.23%

3.77%
(in U.S. $)

 








U.S. $ in pounds

£0.620

£0.623

0.23%

-3.64%
Euro in dollars

$1.30

$1.30

0.75%

-0.05%
(in U.S. $)

 








U.S. $ in euros

€ 0.772

€ 0.771

-0.75%

0.05%
U.S. $ in yen 

80.26

79.80

2.93%

4.09%
U.S. $ in Chinese

6.26

6.24

-0.26%

-0.96%
yuan











Canada dollar

$1.006

$1.007

-1.04%

2.55%
(in U.S. $)

 








U.S. dollar 

$0.995

$0.993

1.12%

-2.50%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,713.00

$1,701.600

-3.43%

9.33%
(per troy ounce)

 








Copper (-HG)

$3.551

$3.568

-5.52%

3.33%
(per pound)

 








Silver (-SI)

$32.0780

$31.620

-7.23%

14.91%
(per troy ounce)

 








Wheat (-ZW)

$8.7275

$8.840

-3.30%

33.70%
(per bushel)

 








Corn (-ZC)

$7.4200

$7.545

-1.88%

14.77%
(per bushel)

 








Cotton 

$0.7273

$0.727

2.94%

-20.67%
(per pound)

 








Coffee

$1.6100

$1.598

-7.20%

-29.89%
(per pound)

 








Crude oil (-CL)

$86.05

$85.730

-6.66%

-12.93%
(per barrel)










 

381Comments
Oct 25, 2012 1:09PM
avatar
We are headed for another downgrade in the next week. The Fed is pumping money into Wall Street like a drunken sailor and all they get in return is a headache! Very tough times on the horizon for both the markets and the overhaul economy! Hold on my friends the worst is yet to come!
Oct 25, 2012 1:47PM
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Ahhh, Obama was on Jay Leno last night, MTV soon?  Already did Letterman and Ellen...I sure wish our "President" worked as hard at his real job as he does hobnobbing with the stars.  NOT very Presidential, IMHO
Oct 25, 2012 12:59PM
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"I always wish that Obama would be as nasty and arrogant with our enemies as he is with fellow citizens who simply disagree with him." - Dennis Miller

Another day of really light volume.  Instead of a billion shares a day on the Dow, we'll be lucky to see a billion shares trade hands before the election, especially with Sandy possibly headed for Long Island next week.
Oct 25, 2012 1:31PM
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I wish Obama would resign...as he promised, having not met the responsible objectives he set as standards for himself...Mr. (ego)...Commander and Chief.  He has no good answers for progress with the economy, only a wallet full of money for his "green iniatives," no way to fund Obama Care...unbeliveable that America would re-elect him based on he is fun to watch on television.  It is just unreal...and his voter base does not understand what a mess he has put the US in...current day niavitae, I would say.  A President by "Executive Order" is what he believes will best suit all Americans.

 

 

 

 

 

 

ameri

Oct 25, 2012 1:03PM
Oct 25, 2012 1:59PM
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Just heard on TV, the father of one of the Americans that was murdered in Libya called into a radio show. He described Obama and Hillary as his son's body was returned. He said that Obama could not look at him, and was deceptive with him. He also said that Hillary pulled him aside and said, "We are going to get the man that made the film"!!!!!!! Unbelievable lies from this administration!!! Time to get him out of the Whitehouse Americans!!!!!!!!!!!!!!
Oct 25, 2012 2:05PM
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US debt should be downgraded. It is based on countless piles of toilet paper Benny Bucks with no intrinsic value. In effect, the country is insolvent.
Oct 25, 2012 2:11PM
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I don't understand why the Wall Street Casino isn't doing well, or for that matter the housing market. Didn't ol' Ben Bernanke say the Fed was purchasing $40B in mortgages a month? This sould make the housing market bed buddies with wall street. We should be seeing the market green daily with that kind of money flowing through it. Well, it looks as thou this is just another failed attempt at another bad idea from the Government and the banking system. No wonder why Ben doesn't want a third try at the helm. Here's an idea......BAIL OUT the U.S. public instead of corparate america and move the country's economy again, instead of making those rich A H O L E S richer!
Oct 25, 2012 1:41PM
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Q: Do you know what Obama will do with the 5 millions$ from Trump...

A: NOTHING because he doesn't have documents, only Bo his dog has them.

Oct 25, 2012 2:16PM
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The maker of Tide detergent and Pampers diapers said today that it's ahead of schedule with its planned job cuts, and that it might consider going beyond its $10 billion cost cutting plan.

You know things are bad when we don't wash our cloths or change the baby.


Oct 25, 2012 1:39PM
avatar

And the men who hold high places must be the ones to start

to mould a new reality, closer to the heart

Oct 25, 2012 2:01PM
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Gotta love the way the wall street casino places it's bets. Yesterday the news was that NEW housing starts were going up and the econmy was looking good. Today existing homes sales are in the crapper. Thismorning i read on another line of MSN B.S. that unemployment claims fell by 23,000 and that it was a definate point that the economy is getting better. I guess it never occured to the idiot who writes this crap that the only reason it fell 23K was because they ran out of weekly benefits. I noticed that they didn't report how many new jobs were filled inorder to offset the claims. But of course, that's the Obama Administration for you working hard to steal your vote with more lies.
Oct 25, 2012 3:34PM
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I used to admire Powell, untill he played the race card. 

Oct 25, 2012 1:55PM
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How many lap dances does $5,000,000 buy?

 

GBA

Oct 25, 2012 1:36PM
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“I think that even when life begins in that horrible situation of rape, that it is something that God intended to happen"

 

I would wager that Indiana Republicans are regretting not re-nominating Lugar for the Senate. 

Oct 25, 2012 2:47PM
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Over the past thirty years or so the government has pulled every trick to make it appear the economy was always growing; statistical manipulation, deficit spending, zero interest rates, bailouts, etc.. But finally they've run out of tricks.
Oct 25, 2012 1:13PM
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gonna be a close one this year!

 

H t t p://elections.huffingtonpost.com/2012/romney-vs-obama-electoral-map

Oct 25, 2012 3:20PM
avatar

Yesterday the housing market was in full recovery...

Today the employment numbers shows improvement...

 

Soar, Rally, Slip, Bump...I love the spin Charley puts on his coverage. BTW how much Charley makes per year?

 

I wonder if MSN BS has ever considered to outsource the Charley comments to somebody in India, they just need to provide a dictionary with W.S. Positive terms...and it'll cost a fraction than Charleys...The MS stock would "soar" with the news of firing people and plans of outsourcing... 

Oct 25, 2012 3:20PM
avatar

Of course,

 

  general colin 'I'm a blithering idiot democrap lib but don' t have the balls to admit it' powel endorses osama again, wow!! didn't see that coming now did we, poor jackazz, can't admit that the black guy is just a plain and simple cataclysmic failure, just can't bring himself to admit it, shame

 

if obama was the sinking Titanic, colin would be claiming the ships doing ok, nothing to worry 'bout here! talk 'bout conduct unbecoming of a General! DELUSIONAL!

Oct 25, 2012 3:48PM
avatar

All we get is bad news. EVERYTHING is headed down the toilet in this country. The economy, employment, the deficit, devaluation of the dollar, housing, etc,etc???  

 

But yet, there are still people who believe in Obama?? How?? Why? What is the attraction?? Is it because he's Black and libs think it's "cool" to vote for a Blackman?? Is it because he picks winners in sporting events or makes his own beer?? Is it because he parties with the heroin crowd in L.A.?? That's about all he's done that is positive.

 

For the life of me, as a man that ran a business for 25 years and went from one employee to 1600 employees ... I can't understand what Obama has done to make him worthy of 4 more years to complete the destruction process of this country??

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