The Zacks Analyst Blog Highlights: Apple, Expedia, Applied Materials, Intersil and Amazon.com
Zacks Equity Research
For Immediate Release
Chicago, IL – April 24, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeApple Inc. (AAPL), Expedia Inc. (EXPE), Applied Materials, Inc. (AMAT), Intersil Corp. (ISIL) and Amazon.com (AMZN).
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Here are highlights from Tuesday’s Analyst Blog:
Apple: Wherefore Art Thou New Launch?
Apple Inc. (AAPL) reported earnings after the bell Tuesday, and unlike the reports of a couple years ago when Apple would typically blow the doors off expectations, things seem to have come in mixed, but in-line overall. Yes, the $10.09 actual earnings per share is down a tad from the Zacks Consensus Estimate of $10.18, but revenues of $43.6 billion in the quarter beat our top-line estimate by $2 billion.
Shares had been climbing in regular trading prior to the earnings announcement today, getting back above $400 per share. It's actually up over 5% in the after-market as well, despite lukewarm guidance for the June quarter. Its gross margin of 37.5% was also on the low-end of the range, and far below the astonishing 47% of a year ago.
This is still Apple, after all -- not Joe's Tech Co. And though this does constitute Apple's third negative earnings surprise in the past 4 quarters, the company did bump up its dividend, greater China is providing an impressive boost to Apple's overall revenues ($8.2B), and the company is, of course, sitting on a gigantic mound of cash ($12.5B in this quarter alone!).
Analysts, though, had been quite down on Apple over the past 60 days, with 13 of the 24 estimates in its fiscal 2nd quarter of 2013 having been downwardly revised, and 3 more in just the past week alone. That there were some upward revisions for fiscal 2013 and 2014 managed to keep Apple with a Zacks Rank #3 at this time.
We will give a more in-depth report about the breakdown of Apple's products and a look at CEO Tim Cook's comments later on, but for now it looks like Apple won't be seeing $700 per share numbers until they can get some traction on new, exciting products and timelines for their launches.
Expedia Earnings Preview: Will It Miss?
Expedia Inc. (EXPE) is set to report first quarter 2013 results on Apr 25. Last quarter, it posted a 4.0% positive surprise. Let’s see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Though Expedia’s revenue in the fourth quarter was down sequentially, a stronger travel market all over the world, contribution from VIA and strategic expansion in Asia helped revenue exceed our expectations.
We believe that Expedia will continue to benefit from the acquisition of VIA Travel that closed in the second quarter of 2012. Bookings were down sequentially in the last quarter due to weakness across channels and geographies, but there could be improvements based on recent acquisitions and agreements that are likely to expand its addressable market. Weaker volumes also impacted margins in the last quarter.
Earnings Whispers?
Our proven model does not conclusively show that Expedia will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate stands at $0.05 while the Zacks Consensus Estimate is higher at $0.11. That is a difference of -54.55%.
Zacks Rank #3 (Hold): Expedia’s Zacks Rank #3 (Hold) when combined with a negative ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Applied Materials, Inc. (AMAT), Earnings ESP of +7.69% and Zacks Rank #2 (Buy)
Intersil Corp. (ISIL), with an ESP of +62.5% and a Zacks Rank #3 (Hold)
Amazon.com (AMZN), Earnings ESP of +100.0% and Zacks Rank #3 (Hold)
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