MORNING NEWS CALL REUTERS U.S. Edition Thursday, May 4, 2017 INSIGHT S&P 500 tech index edges toward $5 trillion while Apple steals spot- light While some investors have been TOP NEWS waiting for Apple's market capitaliza- • Viacom's profit plunges 60 tion to reach $1 trillion, those looking Viacom Inc, the owner of MTV, Comedy Central and Nickelodeon, reported a for big round numbers might be bet- 60 percent decline in quarterly profit on Thursday, hurt by higher programming ter off looking to the S&P 500 tech- costs and as domestic advertising sales continue to fall. nology index as a whole, which is • Dunkin' Donuts posts flat U.S. comparable sales in 1st-qtr approaching the $5 trillion mark. Dunkin' Brands Group Inc said sales at established Dunkin' Donuts stores in The S&P 500 technology index, the United States were little changed in the first quarter, hurt by a decline in which includes Apple Inc, will hit $5 store traffic. billion in about two months if its • HSBC posts surprise capital boost but rules out dividend hike, buy- growth of 16 percent so far in 2017 backs continues at the same pace. HSBC Holdings Plc reported a better than expected first-quarter profit and Apple is already the world's most capital position on Thursday, benefiting from an improved performance from valuable publicly traded company, its core operations and the return of cash from its U.S. unit. and its weight within the S&P 500 in • Chesapeake posts quarterly profit versus year-ago loss recent decades has been rivaled Chesapeake Energy Corp posted a quarterly profit, compared with a year-ago only by Exxon Mobil and Microsoft. loss, when the U.S. natural gas producer took charges to write down the value The iPhone maker's market capitali- of some oil and gas assets. zation recently reached a record • Occidental reports bigger quarterly profit on oil price rise $774 billion after increasing 27 per- Occidental Petroleum Corp reported a 50 percent rise in quarterly profit, cent so far in 2017. If Apple contin- helped by the rise in oil prices. ues to grow at that rate, its market capitalization will hit $1 trillion in Oc- tober. BEFORE THE BELL "Investors see the big numbers, the A day after the Federal Reserve held interest rates unchanged, U.S. stock hoopla surrounding hitting one of index futures rose as focus shifted towards the non-farm payrolls report due these arbitrary levels, said Kim For- on Friday. CBS, Marathon Oil and Activision Blizzard are some of the major rest, senior equity research analyst companies scheduled to report quarterly results later in the day. On the eco- at Fort Pitt Capital Group in Pitts- nomic front, investors will look forward to trade balance figures, claims for un- burgh. Hitting those milestones often employment benefits, and the Labor Department’s productivity data. Europe- attracts more investors, she added. an shares rose following a flurry of well-received quarterly results and Asian Apple accounted for as much as 4.9 shares closed mixed. Gold fell as the dollar rose to a two-week high. Oil fell percent of the S&P 500 in Septem- after data showed a lower-than-expected decline in U.S. inventories. ber 2012, but its share of the index has since slipped to 3.8 percent. In comparison, Exxon Mobil account- ed for 5.3 percent of the S&P 500 in December 2008, while Microsoft briefly accounted for 4.9 percent of the index in 2000. Apple recently accounted for 15.1 STOCKS TO WATCH percent of the S&P 500 technology index, down from a peak of 21.8 per- Results cent in 2012. • American International Group Inc (AIG). The insurers reported better-than- The technology index recently traded expected first-quarter operating profit on Wednesday, helped by investment at 17.4 times expected earnings, returns and cost cuts. AIG reported operating earnings of $1.37 billion, or down a little from a month ago but $1.36 per share, compared with $765 million, or 64 cents per share, in the otherwise near highs not seen since year-ago quarter. That easily beat Wall Street's average estimate of $1.08 per 2008, according to Thomson Reu- share. MORNING NEWS CALL - U.S. EDITION May 4, 2017 • AmerisourceBergen Corp (ABC). The drug wholesaler profit fell 32 percent, ters Datastream. as operating expenses rose. Net income fell to $411.5 million, or $1.86 per Shares of Apple edged down 0.3 share, in the second quarter ended March 31, from $603.5 million, or $2.68 percent on Wednesday after the per share, a year earlier. Revenue rose 4 percent to $37.15 billion. The drug company reported its March-quarter wholesaler profit fell 32 percent, as operating expenses rose. Net income fell results on Tuesday and said sales of to $411.5 million, or $1.86 per share, in the second quarter ended March 31, iPhones fell, surprising investors. from $603.5 million, or $2.68 per share, a year earlier. Revenue rose 4 percent Still, at least four analysts raised to $37.15 billion. their share price target for Apple. • Chesapeake Energy Corp (CHK). The company posted a quarterly profit, While global smartphone sales have compared with a year-ago loss, when the U.S. natural gas producer took lost steam in recent years, investors charges to write down the value of some oil and gas assets. Net profit availa- remain optimistic that Apple will ble to shareholders of $75 million, or 8 cents per share, in the first quarter end- mark the 10th anniversary of the iPh- ed March 31, compared with a loss of $1.11 billion, or $1.66 per share, a year one with new models that give a ma- earlier. Total revenue rose 41 percent to $2.75 billion in the quarter. jor boost to sales. • Dunkin' Brands Group Inc (DNKN). The company said sales at established The median analyst 12-month price Dunkin' Donuts stores in the United States were little changed in the first quar- target for Apple on Wednesday was ter, hurt by a decline in store traffic. The company said net income rose to $160. Hitting that target implies a 9 $47.5 million, or 51 cents per share, in the first quarter ended April 1, from percent rise from current levels, $37.2 million, or 40 cents per share, a year earlier. Excluding items, the com- which would put Apple's market capi- pany earned 48 cents per share, in line with the average analyst estimate. talization at $836 billion, excluding Dunkin' Brands' Revenue increased slightly to $190.7 million, missing analysts' the effect of potential stock buy- expectation of $192.2 million. backs. • Facebook Inc (FB). The online social network reported surging quarterly Still, analyst price targets are a poor profit and revenue on Wednesday, helped by its fast-growing mobile ad busi- predictor of stock performance, and ness, but its shares dipped from a record high in after-hours trading as inves- a stock's past performance often tors showed some nervousness about future earnings. Facebook said quarter- says little about what it will do in the ly profit in the first three months of 2017 rose 76.6 percent year-over year to future. $3.06 billion and total revenue went up 49 percent to $8.03 billion. Analysts on In February, Warren Buffett told average had expected monthly active users of 1.91 billion, according to finan- CNBC that Apple was likely to hit a cial data and analytics firm FactSet. Net income attributable to Facebook $1 trillion market value before his shareholders rose to $3.06 billion, or $1.04 per share, in the first quarter from own holding company, Berkshire $1.73 billion, or 60 cents per share, a year earlier. Hathaway, which has a market value • Fitbit Inc (FIT). The wearable device maker reported quarterly revenue of $410 billion after its stock rose 2 above its own forecast, and said launches planned for this year were on track, percent so far in 2017. sending the company's shares up 7.2 percent in after-market trading on Steep stock gains driven by opti- Wednesday. Fitbit's revenue fell about 41 percent to $298.9 million in the lat- mism about upcoming iPhones are est quarter. Analysts on average had estimated revenue of $280.8 million. The unlikely to continue at the same company posted a net loss of $60.1 million, or 27 cents per share, compared pace, said Shebly Seyrafi, analyst at with a profit of $11 million, or 5 cents per share, a year earlier. Excluding FBN Securities. But he recommends items, the company posted a loss of 15 cents per share, smaller than analysts' the stock and even increased his average estimate of an 18 cents loss. own price target to $160 from $155 • Herbalife Ltd (HLF). After years of discord with a prominent hedge-fund following Apple's quarterly report. manager, a federal investigation and bad publicity, the company Chief Execu- "It's a value play that should be tive Officer Michael Johnson is taking a victory lap. At the Milken Institute bought at current levels," Seyrafi Global Conference this week, Johnson touted the wares of his nutritional sup- said. plement maker, offering free shakes and protein bars to billionaires, and paint- ed Herbalife not as a company that narrowly avoided being classified a pyra- --- By Rodrigo Campos and Noel mid scheme, but as part of the solution to an obesity epidemic.