Thursday, November 20, 2014

Morning Journal---Why is anyone surprised that Abenomics failed?

News on Stocks in Our Portfolios
·         Donaldson (NYSE:DCI): FQ1 EPS of $0.40 misses by $0.02.
·         Revenue of $597M (-0.3% Y/Y) misses by $25.6M.
·         Qualcomm (QCOM -1.2%) guides at its 2014 analyst day for an 8%-10% revenue CAGR from FY14 (ended in September) to FY19. The company adds it aims to grow EPS faster than revenue, and to return 75% of its free cash flow to shareholders.
·         Qualcomm has set an 85%-86% near-term op. margin target for its licensing unit (QTL), and an 86%-88% long-term target. The chip division (QCT) has been given an 18%-20% near-term op. margin target, and a 20%-22% long-term target. QTL and QCT respectively had 87% and 20% op. margins in FY14.
·         With Chinese payments remaining an issue, QTL is expected to have FY15 revenue of $7.3B-$8.3B vs. $7.6B in FY14. 3G/4G devices sales are expected to rise 7%-8%, and ASPs to fall 9%-10%.
·         QCT's revenue is expected to rise to $19.3B-$20.3B from FY14's $18.7B. MSM chip ASP is expected to fall 3%-5% due to a mix shift towards emerging markets and "premium tier mix challenges" - the latter could be a reference to the fact Apple (unlike Samsung) exclusively relies on its own app processors, albeit while relying on Qualcomm for baseband modems and other ICs.
·         Qualcomm sold off two weeks ago after missing FQ4 estimates and providing light FQ1/FY15 guidance.
 
Economics

   This Week’s Data

            Weekly jobless claims fell 2,000 versus expectations of down 6,000.

            October CPI came in flat versus estimates of -0.1%; ex food and energy, it was +0.2% versus forecasts of +0.1%.

   Other

            Why is anyone surprised that Abenomics failed (medium)?

            Wage inflation remains low (short):

Politics

  Domestic

  International

            Update on US/Russian relations (short):


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