The Zacks Analyst Blog Highlights: Cirrus Logic, Apple, Intel, Hewlett-Packard and Dell
CHICAGO, April 18, 2013 /PRNewswire/ -- 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 include Cirrus Logic (Nasdaq: CRUS), Apple (Nasdaq: AAPL), Intel (Nasdaq: INTC), Hewlett-Packard (NYSE: HPQ) and Dell (Nasdaq: DELL).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Wednesday's Analyst Blog:
What's Going On with Tech Earnings?
Today's negative pre-announcement from Cirrus Logic (Nasdaq: CRUS) adds to the cloudy outlook for Apple (Nasdaq: AAPL). In many ways, Apple's problems are very company-specific: a function of competitors are finally catching up to it. Apple's smart-phones and tablets no longer have the field to themselves. What this means is that Apple's growth outlook is a lot less certain than was previously believed.
We will know more about Apple's earnings picture as the company reports Q1 results after the close on April 23rd. But the current Zacks Consensus estimate for Q1 is down almost 14% in the last three months and estimates for the coming quarters likely have more room to come down. In terms of growth, Apple's total Q1 earnings are expected to be down roughly -16% from the same period last year.
The Key Trends
Apple's problems may be company specific, but plenty of its hitherto high-flying Technology peers are faced with similar earnings challenges. We saw in Intel's (Nasdaq: INTC) earnings report on Tuesday how the weak PC demand picture is weighing on its outlook.
The situation isn't much different for other PC-centric players like Hewlett-Packard (NYSE: HPQ) and Dell (Nasdaq: DELL), to name just a couple. Ironically, Apple played a leading role in bringing the PC market to its knees.
Others are faced with different headwinds that lead to the same earnings challenges. Companies with advertizing based business models are struggling with monetizing the secular shift from PC to mobile devices. This platform shift has material consequences for these companies' margins, as do the headwinds facing Apple and the PC players.
Expectations for Q1
These trends are clearly visible in the aggregate earnings expectations for the sector. And let's not forget, Technology is the largest earnings contributor to the S&P 500. It's not without basis to say that 'as goes Tech, so goes the S&P 500.' Total earnings for the sector are expected to be down -8% from the same period last year, which is a big contributor to the expected -1.6% decline for the S&P 500 as whole.
The revenue picture isn't that bad, with total sector revenues in Q1 expected to be up +2.8%. And this spotlights the margin problem we referred to earlier for the individual companies. Net margins for the sector in Q1 are expected to be down more than 200 basis points from the same period last year and essentially flat from the preceding quarter.
What About Beyond Q1?
In terms of earnings, the first and third quarters are typically the seasonally weak periods for the sector. As such, the market may be willing to cut the Tech companies some slack for a weak showing this reporting season. But a lot will depend on how they guide towards the coming quarters, as expectations for the coming quarters, particularly the second half of the year, are for a resumption of strong growth.
Current consensus expectations are for total Tech sector earnings to increase by +8% in the second half of the year after declining by -5% in the first half. The second half recovery is then expected to carry into 2014, resulting total earnings growth for the sector of +13.3%.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.
More by this Source
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.