HALISTER: Apple FY3Q Rev. View, IPhone Units Miss; Boosts Return Program

Apple FY3Q Rev. View, IPhone Units Miss; Boosts Return Program

(Bloomberg) -- Apple sees FY3Q rev. $43.5b-$45.5b vs est. $45.7b and sees FY3Q gross margin 37.5%-38.5% vs est. 38.3%.
  • 2Q iPhone units sold 50.8m vs est. 51.4m (average of 5 ests. compiled by Bloomberg News)
    • 2Q iPhone ASP ~$655 vs est. ~$666 (5 ests.)
  • 2Q EPS $2.10 vs est. $2.02
  • 2Q rev. $52.9b vs est. $53.1b
  • 2Q services rev. $7.04b, up 18% y/y
  • 2Q other products rev. $2.87b, up 31% y/y
  • 2Q-end cash position $256.8b vs $246.1b last quarter
  • Authorizes $50b increase to capital return program and
extends program timeframe by four quarters; under expanded program, AAPL plans to spend a cumulative total of $300b by the end of March 2019 ** Boosts share buyback program to $210b from $175b ** Declares 63c/share div, up 10.5%
  • Preview here
  • Call 5pm, 877-419-6600

Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
AAPL US (Apple Inc)

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UUID: 7947283

HALISTER: Automakers Lack Compelling Models to Lure Buyers: Street Wrap

Automakers Lack Compelling Models to Lure Buyers: Street Wrap

(Bloomberg) -- U.S. auto sales failed to pick up pace in April after a disappointing show in March, leading analysts to worry about impending production cuts and a further rise in incentives. U.S. preliminary light vehicle sales at a seasonally adjusted annual rate (SAAR) reached 16.88 million, according to Autodata; that compares to 17.40 million in the same month last year, and analysts estimate of 17.10 million.
  • GM shares fell as much as 4%, Ford dropped 4.6%, FCAU down 5.7%
    • See GM supply chain; Ford supply chain; FCAU supply chain
  • Kelley Blue Book (Jack Nerad): Notes car sales did not reach y/y levels despite high consumer confidence and wages showing an increase in April; “one explanation is the lack of compelling new models to prompt consumers to hit the showrooms”
    • Says consumers are confronted with a vast array of vehicles, financing options and lease offers that leave many uninterested or “simply frozen in place”
  • Consumer Edge (James Albertine): Sees the industry beginning to bring down 2017 SAAR estimates, leading to negative EPS revisions among automotive stocks leveraged to new vehicle sales
    • Says certain carmakers will power through industry weakness with a strong mix of trucks and retail sales (GM and perhaps Ford), while others to suffer a bigger pull-back (those with higher car mix vs truck)
  • RBC (Joseph Spak): Sees industry SAAR tracking ~16.8m vs RBC est. 17.3m; “This will add to investor angst and the belief that production cuts are needed”
  • Buckingham (Glenn Chin): Remains concerned about GM earnings & automotive FCF generation as sees average transaction prices in North America to come under pressure
    • Ford’s sales showed many pockets of demand weakness coupled with high inventories for cars, which should drive incentive levels higher, heading into the spring selling season
  • Deutsche Bank (Joseph LaVorgna): Does not believe the recent weakness in motor vehicle sales is a “harbinger of a more serious downturn”
    • Says some slowing was to be expected as auto sales have been strong during much of the current business cycle
  • Big 3 U.S.:
    • GM April U.S. Auto Sales Miss Estimates; Shares Fall 4%
    • Ford April U.S. Light-Vehicle Sales Down 7.1%, Lags Estimates
    • Fiat Chrysler April Sales Lag Estimates; Shares Fall 4.8%
  • Big 3 Japan:
    • American Honda April Sales Miss Estimates; ADRs Fall 0.9%
    • Toyota April U.S. Auto Sales Down 4.4%, Est. Down 4.2%
    • Nissan April U.S. Auto Sales Fall 1.5%, Est. Up 1.5%
  • Others:
    • Hyundai April Car Sales Fall 11.7%
    • Volkswagen of America April sales up 1.6%
  • NOTE: Earlier, Carmakers, Suppliers, Retailers Drop on Weak April Auto Sales
    • May 1, PREVIEW U.S. APRIL AUTO SALES: Will Rebound Help Calm Concerns?
    • April 3, Weak March Auto Sales Point to Production Cutbacks: Street Wrap

Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
005380 KS (Hyundai Motor Co)
F US (Ford Motor Co)
FCAU US (Fiat Chrysler Automobiles NV)
GM US (General Motors Co)
7267 JP (Honda Motor Co Ltd)

People
Glenn Chin (Buckingham Research Group)
Jack Nerad (Kelley Blue Book)
James Albertine (Consumer Edge Research LLC)
Joseph Lavorgna (Deutsche Bank AG)
Joseph Spak (RBC Capital Markets)

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UUID: 7947283

HALISTER: Deutsche Bank’s Chinese Backer Said to Boost Stake to Almost 10%

Deutsche Bank’s Chinese Backer Said to Boost Stake to Almost 10%

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
DBK GR (Deutsche Bank AG)
521 HK (HNA Holding Group Co Ltd)

People
Alexander Schuetz (C-Quadrat)
Chen Feng (HNA Group Co Ltd)
John Cryan (Deutsche Bank AG)

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UUID: 7947283

HALISTER1: RESEARCH ROUNDUP: Fed May Struggle to Assess Economy on Weak 1Q

RESEARCH ROUNDUP: Fed May Struggle to Assess Economy on Weak 1Q

(Bloomberg) -- (Adds ABN Amro and Deutsche Bank and updates BofAML and Morgan Stanley in item that moved April 28.)
  • FOMC gathers in Washington Tuesday and Wednesday after release of data showing weakest GDP in three years; Nomura economists, led by Lewis Alexander, say policy makers face challenge in assessing U.S. economy
  • Even if Fed doesn’t take action at this meeting, it will probably stick with three rate increases this year and prospect of changing its balance sheet policy, based on published research from economists and strategists
  • Current implied probabilities of a rate increase at the May meeting are below 15% vs ~70% for June
  • See also: U.S. Economy Grew 0.7% in First Quarter, Slowest in Three Years; Fed’s Cut in Bond Holdings May Be Messier Than Yellen Hopes
  • ABN Amro (Maritza Cabezas, Arjen van Dijkhuizen)
    • Fed to remain optimistic by suggesting 1Q slowdown was temporary and say long-run outlook remains positive, near-term risks are balanced
    • Premature for Fed to make any changes in statement regarding balance sheet
    • ABN Amro still expects next rate hike in June
  • Barclays (Michael Gapen, Rob Martin, Blerina Uruci)
    • Fed statement is likely to mention slowing 1Q activity, while signaling that normalization plans remain in place
    • Any changes to reinvestment policy won’t come until after FOMC agrees on how to scale back redemptions
    • Bar for delaying rate hike has risen; Barclays expects increases in June, September
    • MORE
  • BofAML (Michelle Meyer, Mark Cabana, others)
    • Fed will make only small tweaks in first paragraph of statement regarding current conditions, will avoid sending strong signals about June meeting
    • Policy makers likely want more data before telegraphing a message about a rate increase in June
    • Market is underpricing extent to which Fed is looking to raise rates this year and next; front-end of curve looks too flat, is vulnerable in event Fed can deliver three hikes each in 2017, 2018
  • Capital Economics (Michael Pearce)
    • Fed statement to keep prospect open for a June hike
    • Balance sheet will be another “live issue” at May meeting
    • Wouldn’t be surprised to see some discussion of balance sheet in minutes of meeting
    • MORE
  • Deutsche Bank (Peter Hooper, Joseph LaVorgna)
    • FOMC should be able to get away with minor changes in assessment of economic developments
    • Any net changes in statement are likely to be read as hawkish, rather than dovish, simply because mix of economic events probably moves FOMC closer to next rate hike
  • Goldman Sachs (Jan Hatzius, others)
    • Odds of a June hike raised to 70% from 60%
    • Upward revision is tied to continued firming pace of wage acceleration and strong growth in coming quarters
    • MORE
  • Morgan Stanley (Ellen Zentner, Matthew Hornbach, others)
    • Fed to “inch closer” to a June hike during May meeting
    • With market already pricing in more than a 60% chance of a June hike, Fed can avoid sending signals
    • MORE
    • “Out-of-consensus” expectation is for Fed to stop MBS reinvestments, leave UST side of portfolio alone: Zentner; central bank to make formal announcement in December
    • MORE
  • Nomura (Lewis Alexander, others)
    • No change seen in rates or balance sheet policy at meeting
    • Even so, policy makers may try to provide more clarity on long-term trajectory of adjustment process
    • Fed faces challenge in how to assess U.S. economy, given 1Q weakness and downside surprise in March employment/core CPI
    • MORE

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Arjen Van Dijkhuizen (ABN AMRO Bank NV)
Blerina Uruci (Barclays PLC)
Ellen Zentner (Morgan Stanley)
Jan Hatzius (Goldman Sachs Group Inc/The)
Joseph Lavorgna (Deutsche Bank AG)

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UUID: 7947283

HALISTER1: Nordstrom, Inc. - DBRS Rating Report

Nordstrom, Inc. - DBRS Rating Report

Alert: HALISTER1
Source: DBR (Dominion Bond Rating Service)

Tickers
JWN US (Nordstrom Inc)

People
Anil Passi (DBRS Ltd)
Michael Goldberg (DBRS Ltd)
Moritz Steinbauer (DBRS Inc)

Topics
Credit Analysis Research
Credit Research
Fixed Income Research
Investment Research
Issuer Focused Research

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UUID: 7947283