Turley Muller

Did Apple Manufacture a First-Day iPhone Shortage?

This article is pretty ridiculous. It's comments sent in from an angry would-be customer who is delusional enough to think Apple is cutting off sales to manufacture hype and buzz?

From reports I got some ATT stores may have had a small hold back for Saturday morning. Many people have jobs and can't stand in a line all morning, thus it would be reasonable that a handful of phones would be available Saturday morning.

Fried from Little Rock went store to store to store Friday morning. First store he waited in line for, ,they announced white iPhone was all that was left. He was not having that, and went to a couple other stores - they were sold out,then found one with phones, but line was super-long. He decided to go to the office and check back at lunch but that store ran out, and he was told all ATT stores in the vicinity had run out. He was informed that they might get some in that evening, and to check back when store opens in the morning. He did, but were gone. rent-a-cop informed him that iPhones were gone right after doors were opened. Asked lady inside when more were coming, and she told him possibly next week, she wasn't certain.

Pretty much every ATT store nationwide had run out mid-day. If there were still a few phones being held, back, they would have been gone 30 minutes later. Still would have sold out.

What would Apple & AT&T rather have - a sound byte and hype or sales. What this guy is implying is that Apple rather have buzz that actual dollars, that revenues and profits aren't important to Apple. Who in there right mind would sit on inventory All day long when they could be selling it? I'm sure AT&T isn't concerned about earning sales commissions and hitting big revenue numbers, yeah right. AT&T would never go along and be told not to sell phones when there is huge line outside the door. If Apple had demanded that, I'm sure management at AT&T would have an array of four letter words for Steve Jobs. They are in the business to sell phones and contracts. AT&T is not a PR or marketing firm working to enhance Apple's appeal. Common sense. What;s next, the tooth fairy??

The idea that AT&T was sitting on any meaningful amount of

Only 35% of iPhone Buyers Will Get it For $199

I think there is some inaccurate information here. All iPhone users are eligible for upgrade prices. The original phone was not subsidized, thus there is no loss to AT&T for upgrading the phone.

Those who are ineligible are customers who bought a subsidized phone in the last year (or longer). AT&T has to recapture those subsidies before giving a subsidy on a new iPhone.

Chesapeake Energy: Truckin', Like the Do-Dah Man

I;m thinking that CHK is hesitant to load up on debt even though it avoids shareholder dilution. Equity financing and asset sales provide cash with out increasing debt levels, which may allow CHK to cut back on hedging.

If debt levels are high, one would want to be well hedged no matter how strong the market, NG prices collapse, interest payments remain, and a firm could be wiped out quick. With the up trend in NG, I would think CHK would like to remove some hedges to take advantage of rising prices

Is Regions Financial Due for a Bounce?

I can't really speak to the underwriting since I worked in secondary marketing.

The underwriting depends on who is securitizing or buying the mortgage. Majority of the mortgages were sold, and some of the short-term ARMS went to the bank's portfolio. Those mortgages, as management has said, aren't the subprime no doc, or exotic types that we see with CFC, WM, WB, etc. Looking back at the situation now, It seems the bank was pretty diligent in portfolio-ing loans.

Some of the programs from other lenders were pretty laughable A Large portion of our production we pooled into agency MBS and sold to the Street.

Overall, Regions has been conservative. If you look back, you will see in 2005, RF Mortgage sold its wholesale lending division. This was nationwide and accounted for around 50% or more of total production. The wholesale channel is one thing killing WM and WFC, Wells CEO was griping on a cc how almost the NPL were 3rd-party originations. Many on these banks did home equity through wholesale/corresponden... network.

Regions home equity & construction loans weren't originated through the mortgage company. These were done in-house through the bank's consumer lending dept. According to management, these are "relationship" loans , manually underwritten, high quality borrowers.

In 2006, the Amsouth merger was announced, and essentially the combination resulted in downsizing mortgage segment and in 2007 I saw that RF disbanded the mortgage company and migrated mortgage lending to the bank's treasury area.

Even though the Amsouth merger was at peak of cycle, RF acquired at a discount to market price. That was pretty crazy. Never seen that before.

Regions has a diversified loan portfolio and revenue streams. The retail banking is quite poor, JD Power gave RF bad ratings which is no surprise, Been hearing that for a while. Don't know if it's just because all the mergers - UPC-RF in '04 then ASO in '06 and all the subsequent turnover has been holding RF back, or if it's something that will never get better. The positive is that have significant room for improvement, but that also means RF is at a competitive disadvantage right now.

One problem is the corporate governance. I believe this deters a lot of institutional investors. If this was significantly improved, the stock would rise just from removing the corp/gov discount.

I would never be inclined to invest in RF besides the current moment. A bank I would be interested in is FHN, great franchise but horrible loan portfolio and is in some trouble, so I wouldn't touch it now. Maybe down the road I'll take a closer look when some of this stuff is behind us.

Is Regions Financial Due for a Bounce?

Author left Regions Mortgage more than 18 months ago and since has no relationship/interests with RF. I guess it should have been disclosed for the sake of transparency.

Is Regions Financial Due for a Bounce?

I agree with what you are saying. I am not mistaking this for value, just that it's possible that expectations are overdone as well as being reflected in the stock price. I am not sure that it truly is. But, what has changed at RF to warrant such recent price declines? There has been nothing RF specific, however there has been a host of negative news from its peers.

Regions is not an exception, however. But, management has seemed pretty upbeat the last several conference calls compared with more negative comments coming from peer banks.

The thing that strikes me is FHN- First Horizon, who has significant construction loans in Florida, has experienced deterioration much sooner than Regions has. I don't why there would be a 6 month or so lag, unless management has been real slow to give the true story.FHN is an example of a regional bank having severe issues.

You raise good points, and I am not all bullish on the industry, but short-term, I think it's possible that much downside risk has been priced in. Regions has Morgan Keegan and an insurance business that generates a good amount of revenue, as does the bank. I expect so big write-downs and losses, but I do think RF can sustain it's earnings enough to pay a 5% dividend at its current share price.

Is Regions Financial Due for a Bounce?

I know they have significant exposure to Florida, and that their construction loan portfolio is a complete mess. But you miss my point. Much, if not all of this information is priced into the stock, in my opinion.

Sentiment is horrible for a reason, I agree, and I think is hard to get much worse, thus easier to improve.

Regions has 144B in assets and 96B loan portfolio, thus the loans in question are a very small portion.

Apple's Bountiful Revenues Are Bigger Than Ever

Pats- thnx

3Q07- iPhone revenue was accessories, no handsets or carrier payments. Apple books by month, but they decide which month to start recognizing. I was trying to say - know unit sales for qtr, but don't know which month, or how many. For instance, 1.7m units could have been sold all in the first month, (hypothetical example) and get 3 months of rev recognition with the payments. Or, they could all be sold they last day of the quarter, and Apple decides to defer it all, and thy recognize no new revenues (other than the deferred rolling off last qtr).

Realistically, phones are sold every day of the month, and some days more than others, thus tough to know the monthly volume. I think even if we did, Apple can still choose to defer. All phones sold after Mar 6 are deferred and won't start coming off until the update. It's muddied alright. We really have no clue to what the Apple TV impact is, and how much sales of it are in there too.

Apple's Bountiful Revenues Are Bigger Than Ever

PK,
~8.5B for the qtr.

Yes that 9.50/month contract number is assuming all 1.7 phones get payments. It's an average, but in no way representative of the actual contract payment amount.

Not all phones are getting payments. And, fir the ones that are, don't know how may phones got how many months in the qtr. Could be that 20% of the 1.7 million, got 2m or 50%, who knows, then with the announcement of holding of march - june recognition makes it real nebulous. When I did some math on the september qtr numbers when iPhone was just ATT, I was coming up with close to a $20/month. I am not confident in that number, it's tough to back into without really having the detailed accounting.

Apple's Bountiful Revenues Are Bigger Than Ever

This Math is off- Not 9.9 Billion for the quarter if didn't defer revenue. More like one-tenth of that.

Since iPhone is only 3 quarters old- any ST DR that is recognized is replaced with LT DR as it shifts through the balance sheet. So, ST DR (Q2-Q1)= 1170-816=$354 That's the addition to ST DR from Q2 iPhone sales. and multiply by two since current DR is only 4 qtrs, and the actual sale is spread over 8. Suggest that iPhone sales were 708 million in Q2. 1.7 million units, $416.5 a phone.

Revenue recognized was 378 in Q2 and 241 in Q1. increase of $137, which was the actually rev from Q2 phones, 241 of the 378 was deferred rev being recognized from Q1 & Q4. If, Q2 iphones weren't deferred then it would be 137*8 = 1096.

1096 million projection from recognized sales (Q2) is obviously higher than the 708 number calculated by change in current DR. The difference of $388 million, is $228 per phone more than the $416 ASP calculated from DR. (1.7m sold)

Recognized revenues include ATT payments, where deferred revenue is cash Apple has already received from the device sale, thus the $226/phone difference is the effect of the ATT subsidy, - divide by 24 and it's $ 9.50 a month / contract.

Those figures are rough, general estimates. It's impossible to know for sure because sales are recorded by month and reported by quarter, plus there are other items in the DR, and Apple had also quit recognizing iphone revenue for sales after Mar 6 until new OS release.

However, sales would be about 1B on 1.7 units if not deferred, not 9.9 Billion.

The Outlook for Apple's iPod Business

Some excellent comments here.

@ Dr. Dan- I totally agree that there are 3 S-curves underlying the entire curve.

Your comments explain my statement " Introducing improved models with new features can sprout a new curve from sales growth reaccelerating. The S-curve then takes on a more scalloped shape." I should have tied that into the 3 mini- S-curves. But in all, growth has been slowing, yet it's inevitable. However, with product innovation, Apple can keep iPod growth continuing.

A Look at Apple's Q2 EPS Estimate Trend

Bobob-

I agree with you, stock will go lower if everyone believes Apple's guidance, and the investors know that Apple is conservative. i think last quarter though, Apple's guidance was much lower even after taking conservatism into account, Guidance only represented 8% growth year over year.

I think Apple was just being more conservative that usual due to the lowered visibility in Q2 from seasonality. Throw in a bleak economic picture, becomes difficult to forecast. If earnings are difficult to forecast then certainly the stock price will be impossible to predict. Let alone, stock price is most always impossible to predict, even if one ca accurate forecast earnings, he/she can't forecast investor sentiment. That's a job probably best suited for Miss Cleo

A Look at Apple's Q2 EPS Estimate Trend

The most important factor is the outlook/guidance management provides along with the earnings announcement. Whether or not the company beats estimates is irrelevant if it guides down expectations for the next quarter. Such as the case last quarter with Apple with the 94 cent forecast when analysts had been expecting over $1.10.

Blogonomics: The Seeking Alpha Model

I can't say that I truly understand why an author would have a gripe with SA since I, personally don't have any monetary interest in blogging or my site. But, I'm sure If I did, like some of the authors here, I would understand quite well. So, I can't really speak to that, and I am pretty ignorant to page rank, links, CPM etc.

What I can speak to- is I love SA because of how it organizes a community of investors and their thoughts into a neat, accessible place. I think there is significant value in being able to see broad and diverse opinion, from many sources, all in one spot.

SA's content - transcripts- That is so huge. I can't tell you how valuable that is, I used to sometime pay 50 because I was too lazy or didn't have time to listen to a call, Truly, written form is thousand times better anyway.

Wall Street breakfast, under the radar, and housing tracker etc. are very helpful. SA provides some awesome content. There isn't any site that can close to matching it.

Most of all, what impresses more than anything- is how SA always listens to readers and authors and, really bends over backwards to give them what they want. I remember when SA launched it's new site format, people were unhappy with lots of changes, but they responded quickly. I wasn't happy when transcripts went to multiple pages instead of one, but they added it back. I can see a lot of financial reasons why SA makes some changes, however, if readers aren't happy, SA has always seemed to change it back.

Not too many places anymore where a business go to great lengths to try make every happy and are receptive to ideas.

hats off - Mick and Mark- You guys have done a outstanding job/

Signs That Foreclosures May Be Peaking

I agree with the article- Sub-prime mortgages 2/28 3/27 reset real high- because of the 5-8% margin that gets added to the reference rate- thus there is no escaping lower payments with these sub-prime loans. Quite predatory.

This article is about ARM resets- Not new originations or refinancing. Lenders con't go back on an outstanding loan - demanding more that what was agreed upon on the mortgage note.

However most of the sub-prime loans reset this year and will be gone by 2010. So we should see a peak in foreclosures from those loans after this year.

Regarding the agency and near prime ARMS - these are mostly hybrids 3/1 and 5/1 mortgages which reset 2.75+ CMT (1yr) or 2.25 (1yr Libor)

Before fed starting cutting rates - the CMT was around 5.25, thus ARMs would reset to 8% at those levels, given an initial fixed rate of 4/5-5/5% - that is a big jump.

Now that the CMT is at 1.60, ARMs resetting today - rate would be 4.35% That would be a decrease for most all borrowers. To say the fed has not helped for ARM resets (excluding sub-prime) is incorrect statement.

Resets on interest rates are determined at origination - the margin - the date - the reference index- only variable is the level of the index - CMT - Libor etc - which is calculated at time of reset.

ARMs other than sub=prime she see payment decreases assuming CMT and Libor don't skyrocket.

Prime home-builder or construction loans and HELOCs are the big trouble areas, as well as any investment property mortgages originated near zero down. Many of these may not be ARMS and borrowers don't face payment increases, rather they will walk due to being upside down, and not having any equity or skin in the game.