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)










 

446Comments
Oct 25, 2012 8:38PM
avatar
Holly cow, now Obama is playing the trust card and "I do what I promise" card.

How many promises did he break?

"I will reduce the deficit in half"
"I will get unemployment down to 5%"
"I will put forward an immigration bill"
"I will bring the country together"
(We are more divided than ever)
"I will work with congress"
(How's that working out)
"I will not raise taxes for those earning under $250,000"
(Obamacare's not a tax, doesn't count if the Supreme Court says it's a tax)
"There will be no lobbist in the White House"
"I will put bills up on the web for 5 days before acting on them"
(I guess the web has been down for 4 years)
"C span will carry discussions / debates on legislation"
(Darn cable TV has been down for 4 years)
(Except when I want to make back room deals)
"If I can't get it done in 4 years, I will be a one term president"

Trust?
"It was a video that caused the deaths of Americans"

The Boston Globe went to court to try to unseal court records from 20 years ago concerning testimony given by Mitt Romney (they want to accuse him of lying) and yet no major news organization has done any real investigating of something as recent as 2 month ago concerning the deaths of 4 americans.

This country is going in the hopper if we elect someone who has failed to do his job, vacationing on our dime, flying Air Force One over New York city to impress his friends (and scaring the crap out of New Yorkers), playing more golf than any other president, demonizing successful business people, calling americans un-patriototic for not wanting to give up more of their hard earned money to the government, pandering to almost every special interest group to get their vote, apologizing for American greatness, bowing to foreign leaders, making more guess appearances on Jay Leno, Ellen and Letterman than Hollywood celebrities and giving interviews for Rolling Stone Magazine and being quoted as saying Mitt Romney is for of ****. Oh but wait, he should get re-hired because he gives great speeches.



Oct 25, 2012 8:25PM
avatar

That's like comparing NPR with Rush Limbaugh
Oct 25, 2012 8:25PM
Oct 25, 2012 8:03PM
avatar

Okay just for Fun:

You want a Jobie  Vote for Obamie.....!!!

You want pittance Vote for Mittance   !!!!
Oct 25, 2012 8:00PM
avatar
I have to give credit to Michelle Bachman when she made this comment on Hardball with Chris Matthews..a few years ago...
On MSNBC, she said, “What I would say is that the news media should do a penetrating expose and take a look. I wish they would. I wish the American media would take a great look at the views of the people in Congress and find out, are they pro-America or anti-America? I think the American people would love to see an expose like that.”

She did know at the time that the GOP since 2008 is the most Anti-American group of Congressman in the History of the Untied States of America.....



Oct 25, 2012 7:59PM
avatar
I think the GOP wanted to move to Extreme Right for some time now.

I believe way back with Newt Gingrich and contract with America and the Republican revolution of 1994.

I agree by 2008 and the Bushs extreme elements have seized the day for the GOP-- The party that abandoned big government and the party that abandoned Blacks in America --The x-party of Lincoln
Oct 25, 2012 7:54PM
avatar
"Spoiler alert!! Fear of an Obama second term..."
 
Why else would they tamper with the default setting on these Comments blogs and hire a bunch of Far Ultra Conservative Klan Evangelist Republican Southerners to pump the thumbs count. If all the news is correct... they get fired if Obama wins, their homes go into foreclosure and their kids have to take all new college exams without the answers written on the blackboard! All the Tea Partiers get their Ensure and Viagra supplies repossessed. It will be Hell on the Plantation come 11/7.
Oct 25, 2012 7:52PM
avatar
This is what I Think,


Thanks for leaving the dark side.
Oct 25, 2012 7:46PM
avatar
Larry Kudzu is getting majorly whacked out over the Benghazi thing. What with the veins in his head popping out as he ranted tonight. Scary.

He needs to do an inventory on why he thinks he's so angry about it.




Spoiler alert!! Fear of an Obama second term...
Oct 25, 2012 7:42PM
avatar
TWIT,
the self proclaimed "Independent" voting for the "Party  of Government Dependance"!



Oct 25, 2012 7:42PM
avatar

Hey Max,

He said we will be collecting on royalties from oil and gas on public lands.

Oct 25, 2012 7:39PM
avatar

TIWIT,

You are about 10 years older than me!! I don't feel like such a geezer anymore, HAHA!!

Oct 25, 2012 7:24PM
avatar
royal   prepare to be degraded by your response
Oct 25, 2012 7:20PM
avatar
Royalflush,

You said try being an independent and think for yourself.....I am almost 60 and been an independent my whole life....and have voted for both parties depending on the candidate...and their policies.....BUT...It has never been more CLEAR since  2008  the Democratic party is the only choice for a moderate......Any one   voting for the Republican party since 2008 are voting for EXTREMISM....plain and simple.....Usually an independent is a Moderate and plays between the 40 yard lines on mostly all issues......The  Republican party since 2008 and especially of 2012 is so Extreme they start on the 5 yard line....The choice as NEVER been more clear for me, NEVER......The Republican Party DROVE me to the DEMOCRATIC PARTY.....
Oct 25, 2012 6:56PM
avatar
Right now unless the market move at least 75 points in a day you will have major losses.
Oct 25, 2012 6:47PM
Oct 25, 2012 6:36PM
avatar

Romney's tax plan, 20% cut $5 trillion

Extend Bush cuts                  $5 trillion

10% corporate cut                 $1 trillion

Increase Military by               $2 trillion

Current deficit X 10               $9 trillion

_________________________________

TOTAL spending                   $22 trillion

Total added revenue             $ ( 0 ) Buy stock in Windex, because Greece here we come.

 

Oct 25, 2012 6:36PM
avatar

"I still very much admire the Statesman/General Colin Powell..."

 

I always enjoy it when the libtards release their chocolate love.....can you idiots give a little to Allen West.....you do realize he is a black man?.....yuk yuk.

Oct 25, 2012 6:26PM
avatar
I like sports, but my wife refused to be a sport's widow.  Otherwise, I was watching every chance I could.
Oct 25, 2012 6:20PM
avatar
I quite watching boxing after Lewis beat Holyfields a55 for like 12 rounds, and Holyfield won the decision.
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