Market Commentary: Apple, Facebook report positive earning figures

US stocks slipped on Wednesday following six days of gains. However, the highlights of the day centered around reported earnings by Apple, Facebook, Boeing and Delta Air Lines. Apple reported an increase in iPhone sales that beat analyst expectations as the top-selling smartphone increased sales in China through China Mobile Ltd earlier this year.

Additionally, Apple increased its repurchase programme from $60 billion to $90 billion and announced a seven-for-one stock split. After-hours trading saw the share increase by 7.9%, however, doubt remains on Apples ability to remain competitive through innovative products.

Facebook announced that revenue rose 72%, flatly beating analyst estimates. Facebook continues successfully shifting to mobile, which now accounts for 59% of advertising revenue. The stock rose as much as 4.3% in after-hours trading. New opportunities for Facebook include the integration of WhatsApp Inc. which will bring 500 million users of the app in sync. To date WhatsApp has generated minimal revenue.

Boeing extended its three-year run of beating profit estimates. Boeing maintains strength in its US civilian business posting an 18% gain in jet deliveries. More importantly Boeing increased their forward guidance for 2014. The stock price increased by 2.4%

Delta Air Lines increased by 6.1% on the day reaching an all-time high as revenue exceeded forecasts by most analysts. Passenger traffic for the quarter increased by 3.5% despite the United States experiencing one of the worst winters on record. The Airline was forced to ground 17,000 flights during the period.  Revenue per passenger also improved by 3.2%. Delta also forecast very strong performance for the rest of 2014.

Early this morning Asian stocks fell after the housing recovery in the US signaled signs of fatigue as US home sales fell unexpectedly. Toyota Motor Corp. retreated following news that nuclear reactors will not restart any time soon. Chinese manufacturing also continues to show persistent weakness.

In Europe, shares of Valeo opened flat despite a 6.35% rise in first-quarter revenue on higher demand in China and North America and the end of a six-year contraction in Europe. Valeo is the major technology supplier to the auto-industry. The car-parts manufacturer also announced that it intends to build six new factories, including four in Asia.

This article was issued by Calamatta Cuschieri, visit www.cc.com.mt for more information.

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