Market briefing --- Matt (slow)
Intel --- Bob (fast)
NYSE --- Deb (fast)
>> welcome to “world financial report.” within the past hour we’ve had earnings reports from two tech companies, apple computer and advanced micro devices and both exceeded revenue estimates made by wall street analysts. bob bowdon joins me now with the story.
>> unlike intel which recovered yesterday, intel, which missed -- excuse me―let’s pull the microphone here. here we are, folks. is this going to work? here we go. all right. we’ll try this, matt.
>> please.
>> try it again. testing. unlike intel which missed analysts’ revenue targets the way i missed putting on the microphone apple and a.m.d. exceeded targets. apple reported last quarter’s fiscal third quarter they call it in apple the operating earnings of 17 cents a share. as we have said that is more than triple the figure from last year which was five cents a share. analysts were only looking for 15 cents a share. that last line means apple beat by two cents. apple’s revenue at $2.01 billion was 30% higher than the same period a year ago. it also exceeded the $1.95 billion analysts’ figure. for the current quarter, here we are into the future, apple predicting fiscal fourth quarter profit in a range between 17 and 18 cents a share. that means it could do slightly better than the 17 cents analysts are looking for. apple broke apart its revenue growth by units calling the 19% growth in mcintosh revenue healthy and the press release called the 162% growth in its music business incredible. that’s mostly ipod but also the i-tunes downloads. the c.e.o. teased investors by writing this. we’ve got a strong product portfolio with some amazing new additions coming later this year. let’s check the investors’ reaction to apple’s news by looking at the extended hours trading of apple shares, right now up 74 cents at $30.32. another tech stock with earnings out less than an hour ago advanced micro devices, the chief processor alternative to those made by intel. a.m.d. reported nine cents a share for last quarter compared to a loss of 40 cents a share in the same period a year ago. what a difference a year makes. the nine-cent figure exactly met the consensus average analyst estimate as you see on your screen. moving to revenue, a.m.d. sold more than expected in the second quarter. as we’ve said its revenue nearly doubling to $1.26 billion from a year ago. that compares to the analysts’ estimate of $1.24 billion. the a.m.d. press release characterized the third quarter as follows. in the third quarter of 2004 a.m.d. expects sales to increase―this is the current quarter―in each of its two major businesses and total sales to increase moderately. they did not quantify what they might have meant by moderately and checking shares, down 16 cents right now trading at $13.58 in extended hours. there will be an a.m.d. conference call at 5:30 p.m. eastern daylight time about 27 minutes from now available on the bloomberg terminal by typing live go or also the via the a.m.d. website. back to you.
>> we always like to play with the bloomberg on this program and one of the things we’ll look at right now are the shares of apple computer. this is an interesting chart. the first is a long-term chart. we’re going back 20 years, folks, to 1984. what you’re looking at is obviously a volatile ride. a big runup in the late 1990’s but then we’re referring to this boxed in area in red. let me zoom it in a little bit for you as the $9 billion day. imagine this, folks. the stock lost half its market value in a single day. i had to go back and look up what the heck happened. what happened is their fourth quarter, they came out and said their fourth quarter profit was not going to meet expectations. so we have seen runups in apple shares in the past and rundowns but that peek if you go back to the same chart still hangs heavily over this stock. you can see that little green circle now. this is the 2 1/2-year high that we recently had but it still has a long way to go to get back up to those levels. the stock over the last year or two, let’s say from the trough of march of 2003 is up about 130% over that period of time. now, if i can lift this part up on the top, this is a relative strength. this white line is going to indicate over―the red line is going to be indicating oversold. guess what? in the two-year period of time the stock never hit the oversold line. you see one, two, three, four, five―a dozen times you have hit the overbought line with this runup in the stock. one last thing. this is an index that not everybody takes a look at but this is the box maker index, kind of a cute little name but the b.m.x. is the ticker on the philadelphia exchange and it’s the actual p.c. making companies. if you take a look at these p.e. rashe ose we talk about apple up on the top with the 48 times this year and 35 times next year. one thing you need to point out when you compare that to the market leader of dell, is sales growth. because that 35 multiple times the 2005 earnings is coming with earnings that are forecast to grow 35% whereas dell’s 2005 profit growth is only about 20%, so just keep that in mind before you say, wow, gee, apple is completely priced way out of the universe. that is the end of our little apple dissertation for now. that said, we’ll take you to the broader picture here today. that is going to be a look at how the markets did. as we said, the dow, the s&p and the nasdaq all on the slide today. particularly the tech-heavy nasdaq which was hauled lower by intel, seeing its busiest day in four years. more than 10% of the total trading volume on the nasdaq coming from intel alone. you see the nyse volume respectable in the near term at least at 1.4 but look at that, over two billion. we haven’t done that since the end of april. so 2 1/2 months ago. but again, as i said, some almost 300 million of that coming from a single stock. onto bonds we go. they were little changed, hovering at about a two-month high, the yields of course going to be pushing up and you see 4.48% there and we go to the shorter end and little changed again but 3.67% and 2.59%. so busy day. intel’s earnings, retail sales really having an impact on the session. deb kostroun was there and has it all put into perspective for us presumably. take it away.
>> certainly, matt. of course tomorrow we have the wholesale inventories report, the p.p.i. report, friday the c.p.i. report. a lot of traders are focusing in on these reports because it will give us an idea about inflation and potentially what the fed may be doing with interest rates because inflation seems to be one of those areas. things have stable ayesd in certainly helping out the bond market but at least in today’s session retail sales falling in june by the most since february of 2003 and the culprit higher gas prices limiting some of the sales. of course we’ve been hearing that from wal-mart and the like. also we did see, talking about gasoline and crude oil, we saw a rise in crude oil right near $41 a barrel at the close of trading and that coincided with a drop in stock prices something we’ve been seeing as of late. crude oil and the stock market moving in different directions. but take a look at how retail fared, retail sales falling by the most since february, 2003. you can kind of see those were generally lower. dillard’s however hitting a 52-week high and leonard’s and -- linens and things saying their second quarter earnings would be below the forecast because not as many shoppers are coming into their stores and so that really plays into what we heard from the retail sales. also, remember that auto sales, the biggest drag, we had heard that from g.m. and ford a couple weeks ago and those auto stocks also lower. however, harley davidson, i should mention that stock hitting a record high on their earnings. oil services moving up along with the amex oil index coming in at a record high in today’s session. also media stock under pressure “new york times” after releasing their earnings saying that advertising for the rest of the year probably going to be under pressure. back to you in the studio.
>> deb, thanks very much. appreciate it. well, we have been talking a lot about oil today and what we did see is futures in new york trading hitting a six-week high after the government reported the biggest shrinkage if you will in oil supplies that we’ve seen in three months and this amid surging demand. the u.s. oil inventories fell according to the department of energy 2.1 million barrels last week. as refineries operated at close to maximum capacity we also got data out from the american petroleum institute, a.p.i., which saw five million barrel decrease. 2/3 of the decline though occurred on the west coast. well, weaker economic data may mean a slower cycle of rate increases and that may weigh on the dollar. we’ll talk currencies and economics, next.
