Your email address:

Powered by FeedBlitz

Or add to your news reader: Add to My Yahoo! Add to Google

Friday, January 2, 2009

Tech Roundup – January 2, 2009

DisplaySearch issued a report suggesting LCD panel prices will be flat in January. Some panel makers are pushing through $3-5 price increases in 18.5 and 19 inch monitor panels and 22 inch panels are in tight supply. Utilization is low with further production cuts planned and supply chain inventories are low due to inventory reductions. Panel makers are presently producing below cost and refusing to take on inventory without firm customer commitments. The Taiwan government has expressed a commitment to support the panel industry. The report rallied LG Display 11% overseas. It's pretty tough to push sustainable price increases through without a pick-up in demand, which the panel industry lacks right now -- follow through in the stocks over the coming poor earnings reports in consumer electronics may be elusive.
Expect LPL (the ADR for LG Display) to play catch-up and Corning (GLW) to rally today.

Chinese mobile operators China Mobile (CHL), China Unicom (CHU) and China Telecom (CHA) rallied on approval of the issuance of long-awaited 3G licenses. The Ministry of Industry of Information has previously suggested licenses would be issued in early 2009. ZTE rallied 17% overseas as they have picked up half of the equipment sales there so far.
Qualcomm (QCOM) is likely to be the primary equipment beneficiary here.

AllthingsD cites surveys from Comscore (SCOR) and privately held Mercent that e-commerce sales rose sharply a couple of days before Christmas and then died. According to Comscore, overall spending for the quarter was down 4%, the first year over year declines for e-commerce vendors since the survey began in 2001 and probably ever. Amazon registered a mid-single digit rise in holiday sales (the company has guided to 6 – 7 billion for Q4, a rise of between 5.7 and 23.4% -- the street consensus is for a 14% rise to ~6.48 billion) – the low end of their guidance would be a disappointment. Both survey houses seem in agreement that eBay has seen no post-holiday pickup. In years past, eBay has seen business increase as people offload unwanted gifts and bargain hunt after the holidays – not so this year it seems. According to Comscore, eBay also saw its number of unique users drop 4% y/y.
Amazon is by far the most expensive stock in the retail universe and vulnerable to post-holiday blues.

Morgan Keegan says Apple (AAPL) will have gross margins closer to 33% in 2009 versus company guidance of ~30%. Weakness in component prices of DRAM, NAND flash, notebook panels and hard drives are the driver of the increased margin assumption. Their December quarter revenue estimate goes from 10.2 billion to 10 billion but their GAAP EPS estimate rises to $1.45 from $1.40 and their FY2009 estimate goes from $37.9 billion to $36.4 billion, GAAP EPS from $5.02 to $4.92. Their rating remains market perform. This isn't much of a call but there isn't much to work with out there today.

Piper clips numbers on a series of single digit solar stocks (ESLR, CSIQ, LDK, SOL, SOLR), citing limited order visibility in Germany and none in other markets. Germany is holding up better than most but are rooftop installations and as such very turns-based. He prefers YGE due to Germany exposure and FSLR due to their lower panel pricing relative to silicon-based solar modules. Tight credit conditions have virtually shut down business for smaller solar suppliers in most geographies (and probably slowed it substantially for the larger ones, though he doesn't take a shot at estimates there). He says US solar roll-outs won't really happen in 2009. The group remains a "call on credit" in his opinion.
Crude oil at $45 down from $150 with credit shut down makes the sensibility of solar investment suspect.

Amazon (AMZN) was named to the S&P 100 to replace Merrill Lynch.


No comments:

Blog Archive