Earnings season continued as General Motors (GM) posted earnings of 84 cents compared to estimates of 75 cents in a pre-opening announcement. Other stocks to watch on Thursday include 3M (MMM), Amazon (AMZN), BorgWarner Inc. (BWA), Dow Chemical Company (DOW), Expedia, Inc. (EXPE), NETGEAR, Inc. (NTGR), Solarwinds, Inc. (SWI), and Starbucks (SBUX).
While Apple (AAPL) jumped nearly 5 percent on Wednesday on the back of iPhone sales, analyst’s expectations are split. According to CEO Tim Cook, future growth will be driven by innovation and their ability incrementally increase revenues while expanding profit margins. However, this might prove a difficult task for the revered tech company as some analysts fear that the high-end smartphone market is saturated. Ben Reitzes at Barclays noted that while the iPhone continues to maintain share and margins in most markets, iPad and Mac trends are a ‘concern’. Adding that ‘we believe shares are still at the lower-end of a range valuation-wise given new product launches lie ahead.’ Alluding to the upcoming product releases scheduled for September.
Electronic Arts (EA) capped off a big day on Wednesday by losing almost half of its 13 percent gain. The stock surged in morning trading after growth in sales of Web-delivered titles led to a smaller-than-projected first-quarter loss. EA might have benefitted from the Apples surge on Wednesday after it was reported that Apple was the companies top retail partner. The surge pushed EA share price to $25.41, its highest level in five years.
Intel Corporation (INTC) confirmed its commitment to CEO Brian Krzanich’s strategy of focusing on mobile. While the strategy makes sense in light of the shrinking desktop and laptop markets, it is not without its risks as mobile devices typically have much tighter contribution margins than Intel’s traditional markets, making it difficult for component suppliers to maintain profits. Intel shares are currently trading near its 30-day low at $ 22.93.
While second quarter earnings for Netflix (NFLX) beat estimates, shares are trading near their lows for the week in pre-market trading at $242.45 as the company added fewer new customers than expected to its streaming service in the most recent quarter.
Meanwhile, shares of Polycom Inc (PLCM) plummeted by 15 percent on Wednesday after reports surfaced that the company was under investigation for securities violations. Volume for this troubled stock was 14 million shares compared to an average of less than 2 million. While Polycom shares have rebounded in pre-market trading to $ 9.65, it is expected that shares will remain below $ 10.00 for the upcoming session.
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