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  • hageneriksson hageneriksson Dec 14, 2012 9:09 AM Flag

    UBS out with some cautious Apple commentary

    UBS lowered Apple 2013 EPS estimate to $47 from $51.50, below consensus of $49.39, following checks that indicate a falling iPhone build rate, mini cannibalization of the larger iPad, Chinese sources that do not expect the iPad5 to do as well as the iPad 4S, and tougher handset competition. The firm maintains its Buy rating and lowers its price target to $700 from $780.

    Comments are weighing on the stock pre-market - if the current negative sentiment around Apple will be confirmed by weak numbers going forward NTE stock might suffer, too. While the Ipad Mini should do fine the far more important IPhone business might be affected over time.

    with Apple this weak I don't see NTE stock appreciate any further for now.

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    • as predicted. A huge drop on big volume yesterday doesn't bode well for todays' session. Would at least expect another weak start, but perhaps the stock might be able to pare some losses with the help of good Ipad mini order numbers today.

      With the Apple overhang not to be removed until AAPL reports Q4 numbers and gives outlook for Q1 the stock doesn't look like a great investment at this point - but still much better than CRUS because NTE is paying a sizeable dividend.

      • 1 Reply to hageneriksson
      • You should pick up a pen and paper and run some #'s on what their earnings are like even if apple sales were cut 30%. Last quarter had only about 1/3 of the iPhone worked into the quarter.

        Also, their customer isn't directly Apple. They sell to Sharp and Japan Display. Two of the best companies out there that make High End displays. That is why Apple picked them. Japan Display is signing contracts with companies other than Apple. Apple is not the only game in town, and Japan Display isn't tied solely to them. And NTE has proven to be one of the best manufactures out there. They received awards from both Apple and Japan Display. Where would ypou go for your new high end product manufacturing.

        A new contract will be announced soon. Could be the new iPad mini display, although I don;t think so. I think this is for a new end customer.

    • There's concern about the iphone sales in China, but a part of the slow sales is this goofy lottery system they set up, where you have to register ahead of time and then get a certain date and time that you can come buy your phone. The lack of lines was planned (although perhaps not planned well.)

      The lowered UBS estimate for iphone sales in Q1 is 46M which is still a really huge amount, even if they're right.

      Sentiment: Strong Buy

    • What is important is that work is flowing to NTE from other sources. This rate is a multiple of Apples groth rate. Also NTE is much cheaper than Apple. Still lot's of upside.

      • 1 Reply to wonkko
      • as the company got huge orders from Japan Display for the ramp of the new IPhone 5 and the new IPad Mini - these orders have been responsible for the recent jump in revenues and profitability with management promising even more to come. If one of these two products doesn't sell as well as anticipated Japan Display most likely will have to take down the order volumes.

        Remember also that following the start-up demand sales of these new products will be lower in the coming quarters which is well evidenced by the recent CRUS guidance for Q1 with revenues down 20% from the peak Q4 quarter.

        If the Apple business weakens much faster than projected Nam Tai will have to sign additional sources of revenue to stay on the growth path.

        Also remember that there has been a slew of good news recently out of the company but the stock price is stalled around 15 for now. Doesn't look very bullish to me.