TODAY’S FAYRE – Barclays, Apple & Facebook – Thursday 24th April 2014

TODAY’S FAYRE – Thursday 24th April 2014

“It is a beauteous evening, calm and free;
The holy time is quiet as a nun
Breathless with adoration; the broad sun
Is sinking down in its tranquility;

The gentleness of heaven is on the sea:
Listen! the mighty Being is awake,
And doth with his eternal motion make
A sound like thunder – everlastingly.

Dear child! dear girl! that walkest with me here,
If thou appear untouched by solemn thought
Thy nature is not therefore less divine:

Thou liest in Abraham’s bosom all the year,
And worshipp’st at the Temple’s inner shrine,
God being with thee when we know it not.”

William Wordsworth – poet – 1770-1850

Answering questions during his press conference with Japan’s Abe-San, President Obama told the gathered throng that 87% of Syria’s chemical weapons had already been removed. I am surprised that this figure has been taken as read – information supplied by the UN or not! I would not have thought that Syria was known for its probity. One could be forgiven for thinking that Syria may on occasions have been economical with the truth.

I must confess to being similarly cynical about figures recently posted, reiterating that serious crimes in the UK are on the downturn. This figure clearly does not include crimes which are not reported and I would suggest this is a measurable figure!

I would love to be a fly on the wall at Barclays’ AGM today. Can you imagine the decibels of harrumphing amongst the minority shareholders like that splendid lady who called the bonus beneficiaries ‘greedy bastards’ – such intemperate language from a lady in her twilight years? These minority shareholders’ gripes are easy to understand with profits falling 10% and dividend payouts down from 34p to 6p, yet bonuses remain resolutely high.

There will be 3 questions which Antony Jenkins and his board will need to answer – justifying this year’s bonus pool up by £200 million – agreeing a remuneration policy for 3 years and finally adopting a policy to get round the EU policy of a 100% of salary cap on bonuses. I make 2 points. Banking is global and the large shareholders know that. So to remain a global player the bonus culture must remain in situ. Also the public must be told that the cash element of bonuses is small and that bonuses are paid over 3 years plus and can be called back in the event of profits turning in to losses. It will be a hairy old meeting but the large shareholders need to be pragmatic. Consequently they may feel that it is ‘Hobson’s Choice’, thus reluctantly supporting the motions. However majority shareholders are taking their responsibilities much more seriously than they have done in the past.

Slightly disappointing US New Home Sales did their best to ruffle the Street of Dreams’ feathers aided and abetted by Amgen’s (-5.07%) and AT&T’S (-3.07%) quarterly results which did not pass muster, despite the fact that Boeing beat expectations (+2.4%). At the end of the session the DOW closed down -0.08%, the S&P 500 -0.22% and the NASDAQ -0.83%. After hours Apple’s and Facebook’s numbers beat the ‘Street’s’ estimates with a bit to spare. EPS for Apple came in at $11.62 against estimates of $10.77. Revenue for the year was $45.6 billion – up 4%. IPhones sales totaled 43.7 million – up 17%. IPad sales fell 16% to 16.35 million. Margins increased from 37.7% to 39.3%. We are still awaiting news of the introduction of iPhone 6 and a flat screen TV. The arrangement with China Mobile is expected to be very productive. $90 billion will be returned to shareholders and there will be a 7 for 1 split, which will take the share price down from circa $555 to $75 a share, making Apple eligible to join the DOW. The share price added 8% in after-hours trading. Facebook’s shares rose 4% after posting a 70% increase in profits to $642 million on revenues of $2.5 billion (EST: $2.36 billion). Facebook has 1 billion users, resulting in mobile advertising being up 59% at $1.47 billion. Shares traded up 4%.

Yesterday London put in a nebulous sort of session with the FTSE 100 easing by 7 points at 6674. ARM Holdings showed signs of anxiety with profits not looking quite as robust as was thought – shares down 4%. Most of the positive headlines were grabbed by AB Foods – the former Garfield Weston Empire. I had forgotten that apart from Kingsmill and Twinings tea and its depleted sugar operation, it owns Fortnum & Mason, Heal’s and Selfridges, but the jewel in the crown is Primark. Primarks’s profits were up 23% and this fashion house is about to assault the US, starting in Boston, encouraged by the success of Zara and H&M. Bold? Good luck!

This morning Astra Zeneca posted better than expected numbers, though many were considering the M&A options. A deal with Pfizer seems increasingly unlikely. Perhaps a union between Pfizer and Bristol Myers Squibb is a better alternative. Anyway Astra added another 2% to its value in early skirmishes. Unilever posted decent numbers but it was felt that the shares had traveled and arrived – down 1%. Finally Alstom the French train maker 29% owned by Bouygues is purported to be a takeover target for GE of the US with a price tag of $13 billion. Certainly the Paris bourse caught the infectious enthusiasm and added 14% by 8.30am this morning.

AETNA, VERIZON, CATERPILLAR, 3MS, UPS, HERSHEY, ALTRIA, DR HORTON, DUPONT, VISA, NEWMONT MINING, MICROSOFT, & STARBUCKS post interim results today.

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom
http://www.panmure.com – The information in this e-mail and any attachments is confidential and may be legally privileged. It is intended solely for the addressee(s). If you are not an intended recipient, please delete the message and any attachments and notify the sender of mis-delivery: any use or disclosure of the contents of either is unauthorised and may be unlawful.

Panmure Gordon (UK) Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.
Please refer to http://www.panmure.com/emaildisclaimer.aspx for additional important disclaimers and legal information.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: