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Friday April 18, 2014



Apple Reports Second Quarter Results

Apple Inc. (AAPL) reported its quarterly earnings on April 23.

Apple reported quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, compared to quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion during the same period last year.

The company sold 37.4 million iPhones in the quarter, a slight increase from the 35.1 million sold during the quarter ending one year ago. Apple also sold 19.5 million iPads versus 11.8 million during the same period last year. In addition, the company sold slightly less than 4 million Macs compared to 4 million sold in the second quarter last year.

Tim Cook, Apple CEO said, "We are pleased to report record March quarter revenue thanks to continued strong performance of the iPhone and iPad. Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline."

"Our cash generation remains very strong, with $12.5 billion in cash flow from operations during the quarter and an ending cash balance of $145 billion," added Peter Oppenheimer, Apple's CFO.

Apple Inc. (AAPL) shares ended the week at $417.21. Announces First Quarter Results, Inc. (AMZN) announced its first quarter results on April 25.

Amazon reported net sales of $16.07 billion for the quarter. This number represents a 22% increase over the same period last year when the company reported net sales of $13.18 billion.

Operating income decreased 6% in the first quarter to $181 million, compared with $192 million in the first quarter of 2012. Net income for the quarter decreased 37% from $130 million in the first quarter of 2012 to $82 million in the first quarter of 2013.

Jeff Bezos, founder and CEO of said, "Amazon Studios is working on a new way to greenlight TV shows. The pilots are out in the open where everyone can have a say. I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don't matter. Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members." began in 1995 as an online book retailer but has since expanded into an online retailer and video streaming company. The company's streaming service recently announced new licensing agreements giving its users exclusive access to series such as Downton Abbey, Justified and Under the Dome., Inc. (AMZN) shares ended the week at $254.81.

Netflix Reports Quarterly Earnings

Netflix, Inc. (NFLX), an Internet network and video streaming service, announced its first quarter results on April 22.

The company added 2.03 million subscribers in the first quarter of 2013. This represents an increase of 290,000 subscribers over the number of subscribers added during the quarter ending one year ago. The total number of paid members increased from 22.02 million to 27.91 million between the first quarter of 2012 and 2013.

Netflix reported global revenue of $1.02 billion for the first quarter. This number was higher than the global revenue of $870 million reported during the same period last year.

In a letter to shareholders, CEO Reed Hastings and CFO David Wells said, "Our U.S. streaming business achieved strong growth in Q1. We added over 2 million members to the service, launched to great reception our first Original series of 2013 House of Cards, and improved our streaming contribution margin above our 100 bps target. We added 2.03 million members compared to 2.05 million in the prior quarter and 1.74 million in Q1 a year ago."

They concluded, "We have a huge opportunity to continue to grow as Internet TV develops globally and are working everyday to make sure our service is as good as it can possibly be."

Netflix is one of America's leading providers of on-demand Internet streaming media and DVD rentals. The company has recently begun to produce original content such as House of Cards, Hemlock Grove and the highly anticipated second season of Arrested Development, which is set to premiere in May 2013.

Netflix, Inc. (NFLX) shares ended the week at $215.55.

The Dow started the week at 14,548 and closed at 14,713. The S&P 500 started the week at 1,555 and ended at 1,582. The NASDAQ started the week at 3,206 and finished at 3,279.

Treasuries Gain as U.S. GDP Report Disappoints

Treasuries gained and yields fell last week following news that the U.S. economy grew at a pace much slower than economists had expected. Adding to this disappointing news was a consumer sentiment report that fell to its lowest level since January. Overall, the bad economic news led investors to flee once again to the security of U.S. government bonds.

Commerce Department figures released Friday showed the economy expanded at a 2.5% annual rate during the first quarter of 2013. Economists had expected the economy to grow at a little over 3% rate for the quarter. Despite the disappointing news, the report showed that consumer spending rose the most since the fourth quarter of 2010.

"We continue to expect growth to slow markedly in Q2, with the pace of the recovery expected to fall to 1.0% to 1.5%," said Millan Mulraine, director of U.S. rates strategy. "However, beyond Q2, as the strengthening private sector fundamentals begin to re-assert themselves we expect the recovery to move back into the clear with growth rising to a robust 3.0% pace."

Another report Friday showed that consumer confidence fell in April. The Thompson Reuters/University of Michigan consumer sentiment index declined to 76.4 in April from 78.6 in March. The 76.4 number was the lowest level the index has registered since January.

During early Friday trading, the benchmark 10-year note yields declined four basis points to 1.67%, close to its yearly low of 1.65%. Yields on the 30-year bond fell four basis points to 2.87% while the 5-year note was down around two basis points to 0.69%.

"We're seeing Treasury bond prices a bit firmer. It's not a runaway rally by any stretch," said Christopher Sullivan, Chief Investment Officer of the United Nations Federal Credit Union. "The report is for the first quarter and that's already somewhat dated, but momentum has slowed from that reading. We could be entering a period of much slower GDP expansion."

The 10-year Treasury note yield finished the week at 1.66% while the 30-year Treasury note yield finished the week at 2.86%.

Interest Rates Continue to Fall

Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) on April 26. The results showed mortgage rates inching lower for the fourth consecutive week with the 15-year fixed rate mortgage reaching a new all-time low.

The 30-year fixed rate mortgage averaged 3.40% this week. This represents a decrease from last week when it averaged 3.41%. Last year at this time, the 30-year fixed rate mortgage averaged 3.88%.

This week, the 15-year fixed rate mortgage averaged 2.61%, representing a decrease from last week when it averaged 2.64%. One year ago, the 15-year fixed rate mortgage averaged 3.12%.

Frank Nothaft, Vice President and Chief Economist at Freddie Mac said, "The housing market is getting a boost with mortgage rates hovering at or near record lows. For instance, existing home sales averaged an annualized pace of 4.94 million over the first three months of this year, the most since the fourth quarter of 2009. More impressively, new home sales topped 424,000 during the first quarter, which was the strongest since the third quarter of 2008. The sales pickup is helping to support house-price gains. For instance, the Federal Housing Finance Agency reported that February marked the thirteenth consecutive month that it has recorded an annual rise in its U.S. house price index, which rose by 7.1% in the twelve months through February, the most since May 2006. Even with these gains, this U.S. index is still 13.6% below its peak set in April 2007."

The money market fund finished this week at 0.5%. The 1-year CD finished at 0.5%.

Published April 26, 2013

Previous Articles

Google Reports Quarterly Earnings

Bed Bath & Beyond Reports Fiscal 2012 Results

JoS. A Bank Reports Annual Earnings

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