Good luck this week everyone – a new addition to the TWA Spreadsheet is a highlight for names that are “must watch names.”
This week, we’re presenting you with a downloadable Excel file regarding some of the top tickers reporting this week, as well as the economic data for the week. Every piece of data is from Briefing.com and is completely free, so we take zero credit for the compiling of the raw data – we are doing this to save you the time and effort of screening stocks that have a higher probability of being a name with a lot of tradeable opportunities:
Next week, we’ll be adding commentary on some of the companies reporting and the most prevalent economic data for that particular week.
After much anticipation, Apple released its first quarter earnings for FY 2013. As many of you know, this was a crucial earnings report following a 20% sell off over the last three months.
Apple announced that it had quarterly revenue and net profit of $54.5 billion and $13.1 billion, respectively or $13.81 per diluted share. These results can be compared to quarterly revenue and net profit of $46.3 billion and $13.1 billion a year ago, or $13.87 per diluted share. This is a 15.05 percent increase in revenue from a year ago, but a zero percent change in net profit. Furthermore, profit margin fell from 44.7 percent to 38.6 percent, yielding a 6.1 percent drop.
Despite narrowing margins, Apple sold a record 47.8 million iPhones. This can be compared to just 37 million iPhones sold in the year ago quarter. This is a almost a 30 percent increase in iPhone sales compared to the year ago quarter. Similarly, iPad sales increased from 15.4 million units to 22.9 million units, yielding a 49 percent increase. Sales of both mac and iPod fell modestly.
The tighter margins can be attributed to an increase in operating expenses compared to the year ago quarter. Specifically, spending in research and development increased 33 percent to $1.01 billion.
Sales in Europe, China and Japan increased 11, 67, and 25 percent respectively. Currently, these three countries are supplying apple with 61 percent of its revenue.
Apple indicated that they expected revenue for the second quarter of FY2013 to be between $41 billion and $43 billion, with a gross margin between 37.5 percent and 38.5 percent. Furthermore, they expect gross expenses to be between $3.8 billion and $3.9 billion.
As we now await Q2 earnings for FY 2013, I expect international sales to increase and become an even bigger part of Apple’s revenue. The U.S. may not be saturated with regard to the entire mobile phone and tablet market, but it is saturated in the sense that people middle to upper class individuals who can afford Apple products can already afford them. On the contrary, international markets are largely untapped and whether it be through a cheaper iPhone or already existing products, I am expecting them to continue to tap these markets.
With Super Bowl XLVII just two weeks away I figured it would be appropriate to take a look at the business side of the much-hyped game. The average ticket price this year is nearly $3,100. That means ticket revenues alone will be about $227 million. In 2012 it was estimated that Super Bowl fans would spend approximately $11 billion on Super Bowl related costs. To put it in perspective, that is more than Fortune 500 company, Stanley Black and Decker’s (SWK) revenue in 2011. However, one of the most unique aspects of this business is the highly anticipated commercials. This year companies have gone to great measures to promote their commercials even further. Anheuser-Busch went as far as airing a preview to their ad for their new product, Black Crown. The frenzy surrounding these commercials has grown year after year and the ads are now one of the biggest attractions for many of the viewers. The 2012 AFC Championship game had 48.7 million viewers. This was a record high number, however it was still trumped by the 111 million viewers attracted by the Super Bowl last year. That leads us to the question, why does the Super Bowl attract so many more people? Both games are played at a very high level and have background stories that make for great football games. The difference can be attributed to the unique experience that surrounds the game itself. It’s the one time each year when it is okay to have a party filled with beer, wings and pizza on a Sunday night. On top of all that, the Super Bowl is commercial free! Sort of. During any other TV program the commercials are ignored, even hated. In a survey by BIGinsightTM 73% of people surveyed said they viewed the Super Bowl commercials as entertainment. Many people are more excited to see what Pepsico’s new commercial will be than they are to see the two Harbaugh brothers go head to head.
With over 110 million viewers likely for this upcoming Super Bowl, companies including Pepsico (PEP), Coca-Cola (KO), and Anheuser-Busch (BUD) have paid, on average, $4 million for a 30 second spot. But, is it really worth $4 million dollars? Over the past three years Pepsico, Coca-Cola, and Anheuser-Busch have seen their stock prices increase by 33%, 52%, and 90% respectively. While Coca-Cola and Anheuser-Busch have vastly exceeded the return of the S&P 500 during this time, 38%, Pepsico has not. These are three of the most noted companies in any Super Bowl advertisement discussion. However, no clear conclusion could be drawn regarding a correlation between their Super Bowl commercials and financial performance. Before writing this investment off, it is important to consider the size of the investment. $4 million dollars is just .08% of Anheuser-Busch’s sales and marketing expense for 2011. At such a minimal cost, it is difficult to claim that the commercials are a poor investment. With more than 2/3 of the US population watching, it is the ultimate stage for any company. Companies such as GoDaddy have built their entire brand image around their Super Bowl commercial. This opportunity can’t be found anywhere else. The survey by BIGinsightTM showed that 8.4% of people watching the Super Bowl claimed that the advertisements influence them to buy the product from the company. So, while these companies have not seen a directly correlated increase in their stock prices over the past several years, the have been able to take advantage of prime time exposure to develop their brands and position themselves well within their respective industries.