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January 18th, 2000

[4:40 PM] Apple Stock Watch: Consensus Number Excites Wall Street, Stock Closes Higher
by Wes George

Fortune Magazine plastered Steve Jobs' grinning mug on their cover just in time for Apple's earnings announcement tomorrow. By all accounts Steve should be smiling, Apple's business is booming, with 1.35 million Macs shipped this quarter for revenues of about $2.1 billion.

Elsewhere on Wall Street weakness in the bond market and soaring oil prices held back most NYSE stocks today while the strong earning reports coming from the Nasdaq bucked interest rate fears.

The consensus estimate is for Apple to report earnings of $0.88 per share for earnings of about $155 million. Apple may also report a one time gain of $136 million for the partial sale of Apple's position in ARM Holdings.

According to Eric Yang, "Apple's cash holding is expected to jump by a whopping $2 billion this quarter to about $5 billion, primarily due to the appreciation in value of Apple's stake in ARM and Akamai."

Apple will take the egalitarian step of presenting its quarterly conference call, historically reserved for analysts and wealthy investors, to the public via a QuickTime broadcast tomorrow at 2:00 pm (PST) for the first time.

Apple advanced another 3 1/2 dollars or 3.48% to close at 103 15/16 with volume of 4 million shares traded.

The Nasdaq almost busted through the old high of 4130, gaining 66 points (1.64%) to close at 4130 on volume of 1.55 billion shares traded. Internet stock with high PE ratios didn't fair as well against high bond yields as the old school tech stocks, like Apple, with much more modest price to earnings ratios. The strongest Nasdaq stocks were in the biotech sector, up 2.2%.

The Dow lost 162 points (1.38%) to close at 11560, on a billion shares traded. Crude oil, heating oil and gasoline hit 9 year highs today and that sent oil exploration stocks sharply higher. Any interest rate sensitive stocks got hammered today, including the financial and brokerage stocks.

The S&P 500 lost 9.92 points (0.68%) to close at 1455.23.

The bellwether 30-year US Treasury bond posted a new 2 1/2 year high yield by closing down 18/32 to 92 5/32 dollars forcing the yield up to 6.74%.

In Apple related businesses, Adobe lost 2 5/16 to close at 64 dollars. Akamai lost 18 1/2 to close at 211 1/2, while ARM Holdings gave back 7 15/16 to close at 172 1/2. Earthlink, Apple's new Internet partner, was up 15/16 to close at 47 3/16.

Apple's Power PC partners: Motorola reported 4th quarter earnings a penny ahead of consensus estimates at $0.82. Year over year sales rose 8.7% to $30.0 billion, from $27.6 billion in 1998. Earnings per share have come back from a loss of $1.61 in 1998, rising to $2.08 in 1999. Motorola lost 7 1/16, on profit taking after its recent run up, to close at 143 15/16. IBM lost x to close at x.

Apple's competitors: Intel lost 15/16 to close at 102 1/8. The chipmaker introduced two mobile Pentium III processors, running at 600MHz and 650MHz and reduced prices on its stable of existing mobile chips. The chips are the first designed by Intel to allow notebooks to power down from 650 MHz to 500 MHz when running on battery power.

Dell lost 1 15/16 to end at 42 1/16 dollars. Gateway lost 15/16 to end at 58 11/16. Hewlett Packard gained 13/16 to close at 1133 5/16, while Compaq gained 1/2 dollar to close at 31.

Microsoft reported earning after the bell of $0.47, beating the consensus estimate of $0.42 while revenues soared by a billion dollars above last year at this time. Shares of Microsoft traded up 3 1/16 to close at 115 5/16.

In other market news: Be Inc. announce that it will begin giving away its latest version of Be OS for free. CEO Jean-Louis Gassée said in a release, "Making the free version of BeOS 5 available through the Internet and other channels allows us to aggressively promote our technology, maximize our visibility and obtain valuable market feedback while aggressively pursuing Internet appliance opportunities." Be Inc. closed down 3 9/16 to 15 13/16.

SoundView Enterprise software analyst Jim Mendelson raised his rating on Oracle to strong buy from buy. Mendelson increased his full-year 2001 earnings estimate to $1.45 from $1.40. Mendelson's full-year 2000 earnings estimate remains unchanged at $1.16. Oracle gained 4 7/16 to close at 111 1/4.

JDS Uniphase (JDSU), the world's largest supplier of fiber-optic network equipment, is buying E-Tek Dynamics Inc. (ETEK) in a $15 billion deal. JDS Uniphase traded up x3 1/2 to close at 195 11/16. E-Tek soared 42 1/2 to close at 178 3/8.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. We also have many of these same quotes reported live (20 minute delay) on our home page. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.


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