Stocks face a weak open on Thursday after Apple Inc. (Nasdaq: AAPL, stock) and Amazon.com Inc. (Nasdaq: AMZN, stock) earnings appeared to disappoint investors while Starbucks Corp. (Nasdaq: SBUX, stock) said a weak economy would cut into future profits. The excitement would be on Apple’s stock after the share went up but came down thereafter during the after-hours trading on Wednesday.

Apple earned $1.16 a share in its second quarter, up 33%, easily beats the $1.07 a share consensus by Thomson Reuters. Revenue was even better at $7.6 billion – up almost 43% from 2007 when Wall Street was expecting $6.96 billion. Apple sold 856,000 Mac desktops and 1.4 million laptops, up 37% and 61% respectively from a year ago. However sales of Apple’s iPod players were up less than 1% to 10.6 million units while the iPhones registered 1.7 million unit sales, down from Q1’s 2.3 million units.

The company renewed its’ promise that it will sell 10 million iPhones this year but it doesn’t take a genius to guess how it could do so without new iPhone offerings. Apple Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer were seen dodging the questions about it. Late 2007, Chief Executive of AT&T Randall Stephenson promised that a 3G iPhone was on the way.

At the moment, investors are guessing Steve Jobs’ next move after Apple Inc. confirmed it had acquired microprocessor designer P.A. Semi for $278 million in cash. Many speculate that Apple is trying to design its own processors but it could be more than that. In July 2007, Apple filed an 80-page patent application describing an elaborate touch- and gesture-based interface reminiscent of the science fiction movie Minority Report. Yeah, keep the whole thing as secret as possible because stock market loves such secrecy and it would create more speculations and rumors which is good for traders.

The stock was spanked (mildly) after the company gave a lower Q3 guidance of $1 buck a share, lower than the $1.11 expected on the street. As usual Apple offers lower guidance but investors might not like it. Hours before the Thursday opening bell, investors would see the stock-trend for the day.

On the other hand Amazon set a negative tone when it said its profit margins would narrow this year despite the company beating earning estimate by 2 cents and 36% better revenue of $4.1 billion from a year ago.

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April 24th, 2008 by financetwitter

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