Morning business news - April 24Wednesday 24 April 2013 10.38
APPLE POSTS FIRST YEAR ON YEAR PROFIT DECLINE IN A DECADE - Apple last night reported net profit of $9.55 billion for the second fiscal quarter - that was down 18% on the same period last year. This is the first time Apple has posted a year-on-year profit decline in ten years. However, sales were up 11% to $43.6 billion.
Mark Murnane, head of trading with Shelbourne Markets, said Apple had been a 'juggernaut' of growth but that was changing now with increased competition. He said the stock price, which has fallen by over 40% since last September, was moving from being a 'growth stock' to being a 'value stock'. "Last night the stock jumped 5% in after hours trading. As the conference call went on, chief executive Tim Cook said there were unlikely to be new products until late next year and we saw the stock pull back then," Mark Murnane said. "There is now a reasonable dividend which will attract a new type of investor. We may see some support around the $400 level. Today's session will be very interesting to watch."
No significant product launches are expected from Apple any time soon. Mark Murnane said the stock price had been driven in recent years by new product launches, something Steve Jobs was particularly good at. "Nothing groundbreaking has emerged in the last while. Just a change of iPhone and a change of iPad. We're still waiting for the magic bullet product, but there was no sign of it last night," he concluded.
MORNING BRIEFS - Elan has reported a net loss from continuing operations of €72.8m for the three months to the end of March. That is down slightly on the loss at the same time last year. First quarter global Tysabri sales increased by 14% to €456m. Earlier this month, the company completed a deal with Biogen Idec to transfer all its Tysabri assets for an upfront payment of €3.25 billion as well as continuing royalties on the MS drug's sales.
*** Lloyds Bank's planned sale of over 600 bank branches to the Co-operative Group has fallen through. It told the stock market that Co-Op decided not to proceed with the £750m sterling deal. It was designed to bring Co-op's share of the British bank branch network to over 10% from less than 4%. That would have equipped it to take on the Big 4 UK lenders. Lloyds is obligated to sell over 600 branches as a condition of receiving state aid.
*** Executive pay will likely be high on the agenda at the Bank of Ireland AGM this morning. Yesterday, the Government ruled out using its 15% shareholding in the bank to vote against the remuneration of CEO Richie Boucher, who received €800,000 euro in pay and other benefits last year. In an interim statement this morning, the bank welcomed the expiry of the exceptional Eligible Liabilities Guarantee Scheme last month. It said it had not experienced any adverse impacts on our deposit volumes since the expiry of the scheme.
*** The FBI is continuing its investigations into yesterday's fake tweet that the White House had been attacked, sending the markets into a tailspin for a matter of minutes. The Dow fell 100 points between 1.08pm and 1.10pm yesterday before recovering. It was not just stocks that were hit by the false tweet - bonds and commodities were temporarily affected too.
*** 70 jobs have been announced at an outsourced sales solutions company. Rathmines based CPM specialises in helping clients to deliver sales targets through a range of fully managed services.