As we dive further into earnings season, investors will do their best to focus on relatively strong U.S. data, as opposed to decisions by the Fed, the Greek debt crisis, and other factors hindering the recovery. On Tuesday, investors saw Apple (AAPL) crush market estimates with their quarterly earnings. The shares soared the most in three years as iPhone and iPad sales doubled that of last year’s holiday season. What’s more, Apple has now narrowly taken over Exxon Mobil (XOM) for the world’s most valuable company by market capitalization. While it is unclear how long the firm will remain in first place, Apple’s rally is certainly helping to prop up markets amid investor concerns [see also The Ten Commandments of Commodity Investing].
Today will follow suit with more bellwether earnings as AT&T (T) will be releasing their most recent quarter’s results. The telecom giant will look to make a statement as its largest competitor, Verizon Wireless, missed analyst estimates on Tuesday and saw its share price tumble. Investors will be especially curious to see how AT&T’s quarter turned out given the news that Apple sold a record number of iPhones last quarter. Though AT&T is no longer the exclusive iPhone provider, this will still account for a good chunk of their revenues and it could mean a strong quarter for the firm [see also How To Invest Like UBS In 2012 (Using Only ETFs)].
Analysts are calling for EPS of $0.43 with revenues just below the $32 billion mark. If all figures are met, this will represent a 1.5% growth in sales for all of 2011 with total revenues eclipsing the $125 billion line. Investors will note that T has either met or surpassed its last four earnings estimates, which bodes well for a good report today. The firm will report before market open so look for the stock to gap at opening depending on which way the report goes.
With this major announcement on tap, to! day̵ 7;s ETF to watch will be the?Telecom ETF (VOX) from Vanguard. This fund seeks to replicate a benchmark that?consists of stocks of large, medium, and small U.S. companies in the telecommunication services sector. Top holdings include none other than AT&T (22.9%), along with Verizon, Sprint Nextel, and a number of other household names. This fund has been relatively flat over the past year, but with a dividend yield of 3.2%, that may be just fine for those utilizing this ETF for its income stream. As far as today’s trading is concerned, VOX will rely heavily on AT&T’s earnings and will likely move in line with the announcement [see also Three ETFs For Smart Phone Exposure].
[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]
Showing posts with label Top Chinese Stocks To Hold. Show all posts
Showing posts with label Top Chinese Stocks To Hold. Show all posts
Monday, February 20, 2012
Monday, January 16, 2012
Challenges loom ahead for the rest of 2012
Bolstered by strong sales of games like Dead Space 2, Dragon Age II, and Bulletstorm, Electronic Arts (NASDAQ:ERTS) beat Wall Street’s earnings expectations late Wednesday and saw its stock rise 7% in recent Thursday trading.
But the rest of the year may not go as smoothly. While it once appeared like the company would be able to maintain its positive momentum, its catalog of late-2011 releases are under threat, putting recent gains at risk.
The most significant issues face the company’s lucrative EA Sports titles. The looming NFL lockout and the absence of the World Cup tournament are putting a significant damper on Madden NFL 2012 and FIFA 2012, entries in the company’s perennial best-selling franchises.
The lack of a new major game in the company’s NBA Live (changed to NBA Elite last year, before being cancelled) series is also a challenge, and an NBA work stoppage looms this fall. EA CEO John Riccitello said that these problems represent a potential “$250 million revenue challenge” for fiscal 2012, and the company adjusted its forecast to account for the worst. That’s a small comfort to shareholders banking on strong sports game sales.
The other problem is that EA’s multiplayer online game Star Wars: The Old Republic, intended as a competitor to Activision Blizzard’s (NASDAQ:ATVI) World of Warcraft, is likely going to be delayed until next year (although the company has scheduled it for a release in the second half of 2011). Having already spent massive sums on the game’s development — costs have been rumored to be everywhere between $80 million and $300 million — EA needs to have its online Star Wars game ready for consumers before Blizzard reveals its World of Warcraft follow-up, code-named Titan.
EA’s d! igital g ames business, including social games on Facebook and mobile games on Apple’s (NASDAQ:AAPL) iPhone, remain a bright spot for the rest of 2011. The company’s digital sales for the previous fiscal year totaled $811 million, handily beating expectations of just $750 million. Its digital initiatives continue to grow by leaps and bounds, and on Tuesday, EA acquired mobile and social game maker Firemint, maker of the popular iPhone game Flight Control, for around $25 million.
Unfortunately, the company’s digital business only makes up 20% of overall revenue. With uncertainty surrounding the company’s traditional game offerings for the rest of the year, a stock runup from of more than 40% since late January may be hard to repeat anytime soon.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at?@ajohnagnello?and?become a fan of?InvestorPlace on Facebook.
But the rest of the year may not go as smoothly. While it once appeared like the company would be able to maintain its positive momentum, its catalog of late-2011 releases are under threat, putting recent gains at risk.
The most significant issues face the company’s lucrative EA Sports titles. The looming NFL lockout and the absence of the World Cup tournament are putting a significant damper on Madden NFL 2012 and FIFA 2012, entries in the company’s perennial best-selling franchises.
The lack of a new major game in the company’s NBA Live (changed to NBA Elite last year, before being cancelled) series is also a challenge, and an NBA work stoppage looms this fall. EA CEO John Riccitello said that these problems represent a potential “$250 million revenue challenge” for fiscal 2012, and the company adjusted its forecast to account for the worst. That’s a small comfort to shareholders banking on strong sports game sales.
The other problem is that EA’s multiplayer online game Star Wars: The Old Republic, intended as a competitor to Activision Blizzard’s (NASDAQ:ATVI) World of Warcraft, is likely going to be delayed until next year (although the company has scheduled it for a release in the second half of 2011). Having already spent massive sums on the game’s development — costs have been rumored to be everywhere between $80 million and $300 million — EA needs to have its online Star Wars game ready for consumers before Blizzard reveals its World of Warcraft follow-up, code-named Titan.
EA’s d! igital g ames business, including social games on Facebook and mobile games on Apple’s (NASDAQ:AAPL) iPhone, remain a bright spot for the rest of 2011. The company’s digital sales for the previous fiscal year totaled $811 million, handily beating expectations of just $750 million. Its digital initiatives continue to grow by leaps and bounds, and on Tuesday, EA acquired mobile and social game maker Firemint, maker of the popular iPhone game Flight Control, for around $25 million.
Unfortunately, the company’s digital business only makes up 20% of overall revenue. With uncertainty surrounding the company’s traditional game offerings for the rest of the year, a stock runup from of more than 40% since late January may be hard to repeat anytime soon.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at?@ajohnagnello?and?become a fan of?InvestorPlace on Facebook.
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