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S&P Capital IQ Equity Analyst Scott Kessler on what to expect from Apple and Facebook’s quarterly earnings reports.
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-- we'll -- -- some major earnings coming out of Silicon Valley next week apple earnings about after the bell on Tuesday -- Facebook's coming out on Thursday let's have a guy who knows about these two and what to look for Scott Kessler S&P capital IQ Internet equity analyst.
Scott get cover both companies let's start with apple what are you expecting and more importantly what might be the big announcements.
Willis thanks a lot so in terms of apple I think what a lot of people are gonna be focused on.
Our number one pump what kind of the company is sustaining especially given that they have -- -- a new product introduction in.
At least a few months and people are looking forward to a new iPhone.
By the fall -- second.
What they are doing in terms of of costs and expenses particularly.
Thinking about Flash Memory prices and if that's of the at all and then third.
Considering that big balance sheet.
Where they are in terms of the dividend in the buyback and what shareholders can look forward to going forward you know what about -- people might look at your price target on Napoli 125 bucks and say wait a minute that's way over bloated but.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- A country of over a billion people has only six.
Apple stores is that right -- they have six apples -- so you think of the potential for growth of just the apple stores alone in China.
And there is still -- market share right.
-- -- -- I completely concur with those assessments and fact.
Think about this way so.
Apple -- say it's roughly about half a dozen retail stores but China already is.
On a geographic basis the second largest contributor in terms of a country.
To apple sales in the distance of that.
Going back a month.
So worldwide developers conference where they talked about Iowa six a lot of features and functionality related to China were -- including.
A series being able speak Mandarin.
Including alliances with the likes of -- and some online video companies so.
The very much focused on China we continue carrier relationship there as well give a price target on apple.
Yeah our twelve month target price is 825 dollars so we definitely see some.
-- upside from here let's get to FaceBook very first earnings call as a publicly traded company and a lot of people are ready to pounce on this.
What metric what piece of information will you be looking for.
And I don't know we've talked so much about how are they going to monetize.
The ads that would go wants Smartphones the mobile ads do you think we'll get any visibility on that.
So they initially I don't know how much visibility were any debt on mobile specifically although.
I really think that FaceBook needs to not only track this topic but make some compelling points as to why.
It is not happening now in terms of monetizing mobile why people should be pretty optimistic about the future in this area.
Nonetheless I think people first and foremost -- focus on how the revenues in the growth of -- saw the second quarter and what I chair of the gonna provide guidance but if they do any indication that.
Revenue growth is going to be sustainable I think -- happy and then secondly.
Costs and expenses.
You know that's been a big issue for FaceBook they've been spending a lot of money.
Investing in a number of different contacts especially.
Thinking more more about mergers and acquisitions so.
We expect from the talk broadly and yeah about spending plans bobbitt's got -- -- price target is 27 the stock is is it is a park above that right now -- -- If I have to think of afraid to sum up what you think about.
FaceBook it's stuck stuck in the in the in the mud right now and it's going nowhere according to you right.
Well David let's be honest here so we put out of pre IPO report on FaceBook and Mae before.
The company started trading.
And we basically indicated at that point that we thought FaceBook might be overvalued.
Then the company came public we know what happened we initiate coverage.
Thereafter -- -- -- public on May eighteenth we initiated with a cell.
On on May eighteenth and we upgraded to a hold I think it was June 5.
Our target price is twice seven dollars you're right.
And we're -- hear more from a company about.
-- things are doing in terms of new initiatives on as was pointed out monetization efforts and then ultimately.
What they're gonna do you from a perspective of of acquisitions you know they've been doing a lot of acquisitions over the last number of years.
But it looks like right now might -- inflection -- -- a lot of money -- opportunity.
To do something a little bit later folks this is your preview of the two most exciting starts in tech.
Apple and FaceBook for very different reasons the excitement flows from those two start Scott Kessler great to see -- thanks for the preview appreciate -- thanks Scott Graham.
