Top News on Jan. 14 that You Might Have Missed
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Every day I provide the top news that you may or may not have heard for that particular day. This includes news that often slips through the cracks of whatever headline is dominating the market. On Monday, there was a lot of company specific and overall segment related news that could have long-lasting effects. Therefore, let’s take a look at a few of these top stories.
Apple Cuts it Orders
Shares of Apple (NASDAQ: AAPL) fell 3% on Monday after the Wall Street Journal reported that display orders have been cut 50% following weaker-than-expected demand. As a result, not only was Apple lower on Monday, but also component stocks such as Qualcomm.
The new order placement would guide Q1 iPhone sales between 30 million and 35 million phones. JPMorgan has already come to the defense, saying that 65 million iPhones was unrealistic and that it had only guided for 25 million. I tend to agree with JPMorgan -- how could expectations be 65 million when the stock has fallen $200 since its launch? Either way the stock fell 3% and is now trading at just 8.82x next year’s earnings. Investors will now wait until Q4 earnings for guidance, seeing as how the company can not comment. Let the conspiracy theories begin!
Global PC Shipment Data Suggests a Weaker Q4
The massive launch of the Windows 8 did not bring consumers back to PCs; consumers still prefer tablets and smartphones. This may sound like old news, but Gartner provided its data for the globe and for the entire Q4, not just December.
According to Gartner’s data, global PC shipments fell 4.3% to 90.3 million units. This is significant because Microsoft (NASDAQ: MSFT) released its Windows 8 operating system during the quarter, and there were a lot of people who believed the release would provide a boost to sales. Strangely enough, this news was a bit overshadowed by a series of upgrades for computer manufacturers Dell and Hewlett Packard, along with data that Windows 8 demand is stabilizing. Therefore, stocks in the space traded higher, but this might be news worth noting for this current earnings season.
A Second Investigation into the Dreamliner
Early this morning, news hit that Japan had launched an inquiry into two separate valve-related fuel leaks on a Boeing (NYSE: BA) 787. This news may sound somewhat insignificant, but it follows news of a comprehensive review by the FCC. It’s important that the company avoids these reviews, because as the number of countries reviewing the 787 rise, it also increases the likelihood that one of these countries will find a larger problem. Seeing as how the 787 is used for long flights, negative findings could be damaging to the company’s image and more importantly to its fundamentals.
General Motors has a Big Day at the Auto Show
The Detroit Auto Show is one of the most important shows of the year for automakers to showcase new models. General Motors (NYSE: GM) showcased its new Corvette Stingray, which has been completely remodeled to use lightweight materials in place of steel to improve fuel efficiency. This new model was highly praised following its release, and many believe it could become a hot commodity. Furthermore, the Cadillac ATS won the best car of the year and CEO Dan Akerson reiterated in his presentation that the European business would not be sold. All three developments could be a big win for the automaker long-term.
Alcatel’s Restructure in Full Effect
News surrounding Alcatel-Lucent (NYSE: ALU) may not sound like “top news,” but it’s a company that interests me, has rallied 70% in the last three months, and with nearly $19 billion in revenue it’s vital to many economies. On Monday Bloomberg reported that the company has received buyout interest for its submarine optical cable unit. The unit is estimated to be worth more than $1 billion, which would be a major catalyst for the $3.8 billion company. Alcatel-Lucent is a company whose sum of its parts may be worth 10x its market capitalization. Therefore, the company is breaking itself down into pieces, and selling all the unprofitable segments. This is the first news of action that we’ve heard since the Goldman Sachs financing deal.
On Monday some of these developments flew under the radar, others did not. Developments such as these ultimately dictate the direction of a stock, both short and long term. Therefore, it’s important that investors are aware of these developments and then, with additional due diligence, use the information to make an educated investment decision. With that being said, stay tuned to what may happen next.
BrianNichols owns shares of Apple and ALU. The Motley Fool recommends Apple and General Motors Company. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!