tv Nightly Business Report PBS January 18, 2011 6:30pm-7:00pm PST
>> susie: apple without steve jobs. the charismatic c.e.o. takes another leave of absence. we look at who's running things in the meantime. >> tim has proven himself to be a very able leader at apple. he's been running the operations of the company for some time, and he's managed that very, very effectively. >> tom: we have more on tim cook and apple's blow-out earnings, thanks to millions of ipad and iphone sales. you're watching "nightly business report" for tuesday, january 18. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. blockbuster earnings from apple this afternoon on a day when investors have been focused on the health of the tech giant's visionary c.e.o., steve jobs. tom, even though apple reported better than expected earnings and sales in the latest quarter, investors still worry whether its shares will go up or down, now that jobs is on medical leave again. >> tom: susie, no question jobs has the magic touch when it comes to satisfying consumer
appetites. from the first ipod nine years ago to the ipad last year, the profits keep piling up. apple earned $6.43 a share in its fiscal first quarter, over a dollar more than analyst estimates. revenues also came in much higher than expected, up 71% from a year ago to $26.7 billion, thanks to huge sales gains ipads, iphones, and its mac computers. >> susie: but the talk today was all about the man who is temporarily running apple while jobs is out. he's apple's president and chief operating officer, tim cook. so, who is he and can he keep polishing up apple? >> since 2007, the iphone has been a phenomenal success. >> reporter: apple's tim cook is one of the company's biggest cheerleaders. the 50-year-old has been with the company since 1998. cook has also been back-up quarterback for steve jobs twice
before, when the iconic c.e.o. went on medical leave in 2004 and in 2009. brand expert kelly o'keefe says there's no question cook is well equipped to run apple's kitchen. >> tim has proven himself to be a very able leader at apple. he's been running the operations of the company for some time, and he's managed that very, very effectively. >> reporter: but, for all cook's strengths, there are concerns about his ability to guide the company long-term, if needed. while apple is well known for its deep bench, jobs is the innovation inspiration for the tech giant. hip and cool products like the iphone, mac computers and ipad have made apple competitors green with envy, and delighted apple shareholders. since 2007, apple's stock has quadrupled in value, powered by multi-billion dollar sales of its i-devices, and what's described as "the genius of
steve jobs." and because the company is so closely identified with jobs, experts say apple needs a public succession plan. >> it would be good for shareholders and it would be good for customers that that has been thought about, and it has been planned, and that there is a very solid plan for life after steve jobs steps aside from the company. >> susie: joining us now for more on apple, v.j. rakesh. he's technology analyst at sterne agee. >> hi v.j. >> so you just finished lynching to theab lift call on earnings. and just wondering. any new information about steve jobs medical leave of absence? how long he'll be gone or the strategic plan in his absence? >> yeah. apple doesn't give any details about the medical leave of absence. but i think i wish steve jobs and his family all the best,
and hope he's back soon. aapl has a deep bench. a whole team of people there. and tim cook on his last in 2009 was excellent, and the stock was up when he was there, and we don't expect anything less this time around. >> so you're keeping your buy rating on the stock with tim cook in charge, right? >> yes. we have a buy rating on aapl, and we think the trenld with the tablets and smart phones for 10 years. for a company the size of apple, they have the road map laid oit for 2 to 5 years. >> i know in the latest earnings remit, impressive numbers olt ipad, iphones sold. what about the rest of the the year with aapl competitors
moving in. >> surprising. even in the latest qufrt, year on year, substantial growth when you look at the rest of the pc industry. still a defining trend in terms of iphones and ipads, and each are seeing 80%. 80% of fortune 500 companys are using ipads and iphones. >> ipads are only in 40 countries. and iphones in a hundred countries. so there's a lot to go. and iphones just started the rise in february, and i think there's a lot of legs left. >> vijay, we saw aapl shares surge 4% after hours. how do you think the stock will do tomorrow. >> i think aapl will record numbers, and the trenld going forward. what you see in the rest of the market, android chasing what aapl is doing tomorrow. >> but what happens to the
stock tomorrow? should investors buy at at $340. >> we believe investors should put more money into aapl, and we think tell move up tomorrow. >> any disclosures? due own the stock? >> no, i don't own the stock. we don't do any banking with aapl. >> thanks for coming on the program. we appreciate it. speaking with j.v. rakesh. >> tom: here the stories in tonight's nbr newswheel: stocks moved higher, despite the slide in apple. the dow rose 50 points, the nasdaq added ten, and the s&p 500 was up a point. trading volume started the week with 1.2 billion shares moving on the big board and just over 2 billion on the nasdaq. comcast can take control of nbc universal. the fcc and the justice department both approved the $14 billion deal today, with conditions. comcast must set aside channels
for independent programmers, and keep nbc shows on free over-the- air stations. it also must follow open internet rules and give up management of the video web site hulu. two men have been charged in an alleged attack on at&t's computer system last summer. new jersey's u.s. attorney's office says the men stole personal information and email addresses for 120,000 users of apple's ipad. still ahead, tonight's "word on the street"-- toys, and the impact of movies like "toy story 3" may have on toy maker stocks. >> susie: president obama continues to court the business community, and ordered today a review of all government regulations. he wants to make sure the rules aren't holding back economic growth. he's asking agencies to look at the cost of regulations and how they affect small businesses. the government is knee-deep in writing hundreds of new rules, from last year's financial overhaul to the new health care law. >> tom: president obama is sitting down for dinner tonight
with the president of the country many americans consider most crucial to their economic future, china. china's hu jintao landed in washington today to begin a state visit focused on security and economic issues. as darren gersh reports, the visit is also a reminder of china's increasingly important role on the global economic stage. >> reporter: the man shaking hands with vice president biden has every reason to be confident as he begins his state visit to the united states. china's president hu jintao represents a country that came out of the financial crisis even stronger. the chinese economy is generating close to half a trillion dollars a year in foreign reserves. at the brookings institution, economist eswar prasad says china's cash has found its way in loans to resource rich countries in africa and south america. >> they are willing to pour money into certain economies without worrying too much about the governance or policies of those countries. and this gives them enormous leverage in their relationships
with those countries, which in turn are willing to support china's policies. >> reporter: china has also set its economic sights higher, aiming to take the lead in innovation and high-tech industries. to do so, it is using access to its vast economy as an incentive and a threat. the chinese government has tried to limit purchases of the foreign products it buys by creating an official list of approved technologies. the u.s. china business council's john frisbie says companies around the world have protested. >> china is choosing the path that says they want to use government procurement preferences to determine winners and losers, and they want to do that in a way that might be skewed against foreign companies. >> reporter: china agreed to eliminate a requirement that foreign companies move their intellectual property to china in order to win a spot on the approved list. and it's put the entire policy on hold for now. at the peterson institute for international economics, analyst nicholas lardy says steps like that are encouraging signs that china will use it's clout carefully.
>> in some ways, they are playing by the rules. for example, they accepted the w.t.o. settlement process. when they lose cases in the w.t.o, they come into compliance. and in certain respects, a stronger, more buoyant china is in our interests. >> reporter: as hu heads into his meetings with president obama, eswar prasad argues the u.s. finds itself on the defensive, another sign of china's growing economic stature. >> it's very difficult for the us to go in and tell china to change its currency policy if there is a feeling that the u.s. is doing whatever is in its own interests-- say, in terms of very lose and expansionary monetary policy without caring about the rest if the world-- and then going and telling china what to do. >> reporter: even so, u.s. officials point out china buys $100 billion a year in u.s. exports, and that figure is growing 15% a year. no other country in the world can provide u.s. companies and workers with that kind of opportunity. darren gersh, "nightly business report," washington.
>> susie: a big earnings miss from citigroup and investors dumped the stock. the bank's shares fell more than 6%. the financial services giant earned four cents in the fourth quarter. it's a big improvement over last year's loss, but four cents below expectations. strong growth in citi's overseas consumer banking couldn't offset weak stock and bond trading for institutional clients. just last week, citi shares closed at a 52-week high of
$5.15. that $5 level is considered important because many institutional investors can't hold stocks that trade below it. despite the latest misstep by citi, standard & poor's analyst erik oja rates the stock a "buy." >> we have a $6 target price for one year from now. and our $6 target price is based on 13.3 times our estimate for 2011, which is 45 cents per share. so, we think that citigroup right now can continue to go up. >> susie: oja says stock and bond trading revenue is a highly volatile area of business, and he does not expect it to be a long-term problem for citi. tom, citi and apple weren't the only big names reporting. what's on tap in tonight's "market focus"?
>> tom: let's take a look at tonight's market focus. today's gains were led by the energy and material sectors, while telecom stocks saw selling. but the focus turned to technology giant ibm after the close with its latest results. big blue came into the earnings report strong, rallying a half percent to a new all-time high. as an indication of the market's optimism for ibm, the move today came on stronger than average volume. after the close, the stock added another 2%. and it was thanks to its earnings results. ibm beat the street by a dime per share. revenues also came in stronger than anticipated, and its 2011 earnings guidance was strong. boeing clarified a previous
delay for the 787 dreamliner. look for the first delivery in the third quarter. in november, boeing postponed delivery after an electrical fire and power failure suspended test flights for a month. but the fact that boeing didn't delay the plane beyond this year was greeted with relief buying. with this 3.5% jump, boeing led the rally for the dow. speaking of boeing, true blue is a big provider of temporary workers for the airplane maker. deutsche bank raised its price target on the stock, thinking as boeing's business picks up, so will true blue's. shares jumped 2%, shy of a new 52-week high. delta stock hit some turbulence, falling 8%. shares have been trending down since november. shares are down to their lowest price since october. the jump in october came on stronger third quarter earnings. that didn't happen this time, though. earnings were disappointing, even though its the first fourth
quarter profit for delta in a decade. it also predicted it will take more planes out of its fleet as fuel prices rise. you may recognize these names-- long john silver's and a&w. the two fast food chains are for sale by parent company yum brands. instead, yum wants to focus on the international growth of these three chains-- kfc, taco bell and pizza hut. these brands have been growing like crazy in china, india and russia. shareholders of yum brands like the idea. shares rallied 3%. two thirds of yum's profits come from china, and it expects that to continue to grow. the long john silver's and a$w brands are concentrated in the u.s. a banking buyout hit today. comerica wants to buy sterling bancshares for just over $1 billion in stock. based on tonight's closing price, that's $9.16 per share for sterling.d corica's presence in texas. comerica shares sank on the news while sterling rallied. but remains below the buyout price.
finally, ariad pharmaceuticals lit up the screen today, up 34% on huge volume. it reported positive results for a cancer drug. this is a five year high. and that's tonight's "market focus." >> business is serious business. it's worth more than $21 billion in the u.s. alone. and last year's number one movie toy story 3 is winning movie awards while raking in
more cash. and tonight's word otd street is more toys. the editor and chief of the street.com joins us from the nasdaq. welcome to nbr. >> thanks, good to be back. >> you're looking at toys, thanks to the toy story 3 winning best animated feature golden gloechblt how much does the oscar mean to the business? >> they do matter. it raise the profile of the movey and reminds parent that is toy story, that's a good wob. i should have that in the library. something for the kid. and it keeps the brand in focus, so people beale more >> we'll get to the related merchandise. toy story 3 pixar which is part of disney. it makes much more than movies. but the stock has been on a tear. are folks still putting money to work at $40 a share. >> it's starting to get expensive. but they have a healthy pe and upwarped mobility left. and people are fairly encouraged by the work of paul
iger and his team. it's not all toy story, but toy story has been singled out by bob iger size one of the drivers of growth this year and last year. >> it's a great franchise for disney, and the accessory manufacturers. hasbro and mattel. folks see two chart patterns. hasbro shares moving up 36% over the last 12 months coming off the reentd highs in the last month or so. mattel, meantime, only half of those gains, 17% or so. so which ones are the analysts liking? >> i think that toy story play is mattel. hasbro just has potato head. but mattel has 60 toys in there, and this is their movie. and i like mattel share price. mattel looks like the bettered
play. >> give us 20 seconds on the retailer here. it's not bricks and mortar. it's amazon pnltd com. >> amazon is the triple play. they sell the dvds, they sell the merchandise, and they rent the movies. they've got a lot to gain from this. they came on the list of amazon's best sellers. and this company has just been on a tear. it's a great retailer called the new wal-mart. >> any ownership in the four stocks we mentioned tonight, glen? >> i don't have any shares in any of those stocks. >> but you have seen the movie? >> it's a freighted movie. i'm a fan of woody and buzz light year. >> can you see this at the street.com. there's a link on our site as well. more on the street. glen hall. >> and here's what we're watching for you. >> susie: here's what we're watching for tomorrow: the housing market, as december starts and building permit numbers are out. and "street critique" guest hilary kramer answers your
questions. she's editor of gamechangerstocks.com. there's still time to send one in. email us at "street critique" at nbr.com. ford motor company will not get a $16 million sales tax refund check from the state of michigan. the auto maker claimed it was entitled to the money back on vehicles bought by consumers who defaulted on their loans. a state court ruled the firm should not get the cash. and today, the u.s. supreme court refused to hear an appeal, leaving the lower court's ruling in place. >> tom: another round in the battle over the bratz. toy makers mattel and mga entertainment squared off in federal court again today for opening arguments in the continuing fight over which company can make the popular dolls. last year, mattel won a $100 million copyright infringement verdict against mga. but that was thrown out on appeal. the toys were a huge hit when mga rolled them out ten years ago.
ad market. combine that with recent valuations pegging facebook at $50 billion. and tonight's commentator has what he calls "that old feeling" again, and it's not necessarily good. here's harry lin, c.e.o. of technology startup tahz.com. >> those of us who worked in the internet and high-tech in the late 1990s sometimes tell stories about that first dot-com boom, when so-called "irrational exuberance" helped fuel a craze that hasn't been seen since... well, the recent mortgage and home-price debacle. but anyway, us internet workers are now having de ja vu all over again. the news that goldman sachs invested in facebook at a purported company valuation of $50 billion is a very heady wall posting. the news that groupon recently rejected an acquisition offer by google for $6 billion is insane. amazon.com just invested a
reported $175 million into groupons competitor, livingsocial. who knew the marketplace needed two group-buying discount sites? while this isn't exactly like the first dot-com boom-- the number of startups and investments is small compared to that era-- the distinct scent of irrational exuberance is a smell i recall pungently. and i smell it again. the worst consequence of the first booms bust was that it tainted the entire sector for years. for the sake of those of us trying to build businesses in the internet, i hope that doesn't happen again. i'm harry lin. >> tom: and finally tonight, starbucks is taking aim at the big gulp. the coffee chain rolled out its newest drink size today. it's called the trenta, which means "30" in italian. you can get the 31 ounce behemoth filled with iced drinks like coffee, tea or lemonade... the giant cups debuted in 14 states today, including here in
florida, susie. they should be in new york city and nationwide by may. >> tom: that's "nightly business report" for tuesday, january report" for tuesday, january 18. i'm tom hudson. goodnight >> susie: good night tom. i'm susie gharib we hope to see all of you again tomorrow night. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you.