The Zacks Analyst Blog Highlights: Apple, China Mobile, Tesla Motors, Volkswagen and Toyota Motor

Jan 28, 2014, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Jan. 28, 2014 /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 the Apple, Inc. (Nasdaq:AAPL-Free Report), China Mobile (NYSE: CHL-Free Report), Tesla Motors, Inc. (Nasdaq:TSLA-Free Report), Volkswagen AG (OTC:VLKAY-Free Report) and Toyota Motor Corporation (NYSE: TM-Free Report).

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Here are highlights from Monday's Analyst Blog:

Apple Misses Key Estimates, Beats Earnings

Upon Apple, Inc.'s (Nasdaq:AAPL-Free Report) after-market earnings report Monday on the company's fiscal 1st quarter of 2014, most numbers came up short of estimates. However, the world's largest tech company reported diluted earnings per share (EPS) before non-recurring items of $14.50, which was a significant beat of Zacks Consensus Estimate expectations of $14.04 per share.

But revenues missed the Zacks Consensus of $57,735 million for the December quarter -- including the all-important holiday season -- when it reported $57.6 billion in quarterly sales. iPhones in particular sold 5 million or so units fewer than expected. Macs and iPads did slightly better than expected, but iPhones make up over half of Apple's sales. Guidance was also below expectations -- $42-44 billion for the company's Q2 March quarter.

That said, Apple continues to set new records with its sales numbers, including new highs in iPhone and iPad revenues. Year over year, earnings are up 5%. A new $3.05 cash dividend has been declared for investors holding Apple stock as of February 10, 2014, and the company's net profit for the quarter was $13.1 billion.

CEO Tim Cook promises to "invest heavily in our future" -- likely meaning new products at some point this year and/or next (and honestly, it does make sense that new innovations should be forthcoming... doesn't it? I mean, this is Apple). The conference call will commence shortly, and perhaps many questions investors still have about Apple will be satisfied by the end of it.

For instance, what of the fate of the cheaper 5c iPhone? Will it go away in the U.S. market, as some have predicted? Will we get some details about Apple's partnership with China Mobile (NYSE: CHL-Free Report)? It's clear Carl Icahn's getting his way at least a little bit with a new dividend issuance, but can we expect a guy like that to remain in silent reverence of Cook's decisions going forward?

In other words, there are roughly about as many questions as you can shake 51 million iPhones at.

On the bottom line, Apple produced a 3.3% positive surprise for its holiday quarter. This is generally in line with what we've seen from Apple in recent quarters, but investors have yet to be impressed of late. It's the main reason AAPL shares have fallen 6% in the after-market Monday, after trading down slightly year to date.

Tesla Resolves China Issues

China is one of the biggest auto markets in the world in terms of number of vehicles sold. Tesla Motors, Inc. (Nasdaq:TSLA-Free Report) intends to capitalize on opportunities in the country and believes that sales in China will account for one-third of its global growth in sales this year.

Tesla plans to open 10 to 12 stores in China by the end of 2014, including the flagship store in Beijing which was opened in Nov 2013. With this, Tesla expects its foray into China to account for 30%–35% of its global sales growth in 2014. Overall, Tesla plans to double the total global sales this year.

Moreover, Tesla has resolved the trademark issue with a local businessman, who had registered the name 'Te Si La'. Earlier, the automaker had opened its flagship store, but it was unable to trade under the popular Chinese name. However, the dispute has now been settled.

Recently, Tesla's Model S electric sedan has been priced at 734,000 CNY ($121,370) in China. The price has been fixed after adding the costs of shipping, VAT and import duties to the U.S. pricing. This makes Model S one of the low-priced vehicles in the Chinese auto market.

Model S is integrated with a premium 85 kilowatt hour battery pack, which enhances its competitive position againstVolkswagen AG's (OTC:VLKAY-Free Report) Audi S5 sedan and Bayerische Motoren Werke AG's 5-series GT sedan. Tesla expects Model S shipments to China to equal the U.S. sales volume by 2015.

Electric car producers, including Tesla, are not interested in setting up production units in China. The Chinese government demands technology sharing with the local partners for the vehicles to be considered as domestically produced vehicles. This may adversely affect the company in long run.

Tesla designs and manufactures electric vehicles and electric vehicle powertrain components for partners including Toyota Motor Corporation (NYSE: TM-Free Report). The company currently carries a Zacks Rank #2 (Buy).

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