The November trade gap from the prior month was originally reported as $47.75 billion., but that was revised lower to $47.06 billion. 

The full preliminary figure for the trade deficit in 2011 is up 11.6% from 2010 at a level of $558.02 billion.  That is the highest level since 2008.  The deficit with China also hit a new record with an 8% gain to $295.46 billion.

JON C. OGG

As far as earnings, SIRIUS XM made over $71 million for the quarter, or $0.01 EPS.  Sales were up 6.5% at $over $783 million.  Estimates from Thomson Reuters were $0.01 EPS and $785.49 million in revenues.  Revenues were projected to be about $3.3 billion against estimates of almost $3.4 billion.

In short, it was mostly in-line.  SIRIUS XM shares have recovered so much from the lows that it has to beat estimates to keep everyone happy.

The law of large numbers catches up to every company in time.  SIRIUS XM added 542,996 subscribers in the quarter and about 1.7 million in whole year of 2011.  For 2012, that projection is to add 1.3 million, which some price increases may increase churn modestly.

The notion that Sirius XM was started with new coverage at Underweight by Barclays earlier this week is only one more item showing concern.

The positive case: If we are really going to get an explosive auto market later on in 2012, SIRIUS XM stands to win.  Analysts still have a price target consensus of about $2.36 on this stock.  Seeking Alpha has a story titled “Buyback And Takeover Chatter For Sirius; CBS Looks Solid” and that might lure more bulls to tout the stock without even reading the article.

The reality is SIRIUS XM is worth over $8 billion today even after the drop, about 4-times Pandora’s $2.2 billion value.  Pandora is also only expected to report almost $420 million in sales for the year ended January 2013.

With almost 4 billion shares, it is too bad that a reverse stock split would only attract short sellers.  Imagine if SIRIUS XM was able to report earnings of $0.10 ot $0.15 per quarter rather than just a penny each quarter.  It would be a psychological boost.  The short sellers would attack it and the company knows that.  There were already 305 million shares in the short interest as of mid-January and that was the highest short interest reading since last May.

SIRIUS XM is trading down almost 2% at $2.15 against a 52-week range of $1.27 to $2.44.  We have already seen 63 million shares trade hands against an average of 55 million shares a day.  If SIRIUS XM is going to trade down on valuation, perhaps Pandora needs some caution as well unless it can score a massive swing higher in paying subscribers.  Pandora shares are trading down almost 3% at $13.51 versus a post-IPO range of $9.15 to $26.00 and versus a $16.00 IPO price.

As a reminder, investors do have stock options that can be used to hedge this one if they want to stick with it for the long haul.

JON C. OGG

As part of its ongoing strategic review process “and commitment to drive sustainable profitability through its most valuable business lines” the company notes these changes:

• Phase out its dedicated capture devices business in the first half of 2012, comprising digital cameras, pocket video cameras and digital picture frames. Kodak will instead expand its current brand licensing program, and seek licensees in these categories.
• Kodak’s Consumer Business will include online and retail-based photo printing, as well as desktop inkjet printing. 
• Kodak says that it will “continue to honor all related product warranties, and provide technical support and service for its cameras, pocket video cameras and digital picture frames.”  Good luck.
• Kodak expects annual operating savings of more than $100 million, and it will incur a separation benefits charge of about $30 million as it exits these.
• The Commercial Businesses segment includes the Digital and Functional Printing, Enterprise Services and Solutions, and Graphics, Entertainment and Commercial Films units. Kodak’s digital businesses now comprise approximately three-fourths of total revenues.         

The company claims to still have a strong position in the personal imaging market. Unfortunately, this long slow death march doesn’t seem over.  Those OTC shares are still worth $0.44 today and we have no personal expectation of any left over value unless it can monetize those patents beyond the wildest expectations.

JON C. OGG

Change.org reports that 194,426 people have signed the electronic document. A note next to the petition claims that “Apple products are made in factories where conditions are so bad, it’s not uncommon for workers to permanently lose the use of their hands.”

The petition also requests that the Fair Labor Association, which Apple has joined and which monitors suppliers, print a list of Apple suppliers which violate its rules.

Those objecting to Apple’s labor practices do have a problem. The labor activity in China may have an effect on Apple’s brand, but so far, that has not happened. There have been no known protests at Apple retail outlets anywhere in the world. From a practical standpoint, Apple’s manufacturing process can barely keep up with demand when it releases new products.

Let’s just call it a seller’s strike.  You can’t find anyone selling Apple.  In the ten trading sessions since earnings, the days with gains have been on seven of the ten days but the days with losses have been only negligible.

Apple jumped to $446.66 after earnings, up from $420.41 at the close on the day of its earnings.  Now shares have closed up 1% at $468.83 for a new all-time high closing price and Apple’s market cap is now at a staggering $437 billion.

And to think… Apple is trading at only 11-times the implied 2012 earnings estimates.  By now it has more than $100 billion in cash on the books.  One day this run will end, but who knows when…  James Altucher gave a $1,000 Apple call last night on CNBC.  The consensus target is now $562.96 and some analysts see $650 as a target.

This stock is now much larger than Exxon Mobil Corporation (NYSE: XOM) and about its only care about Microsoft Corporation (NASDAQ: MSFT) is now just remembering that there is supposed to be a rivalry.

JON C. OGG

In the fourth quarter, HTC’s revenue fell 2.9% year-over-year. More telling is that revenue dropped 25% from the third quarter to the fourth. Operating profits were worse, down 36% and 23% respectively. First-quarter profits will drop as much as a third from the fourth quarter of 2011, to $2.2 billion.

The first reaction to the news was hard to dispute. Samsung is set to overtake Nokia (NYSE: NOK) as the world’s largest handset company, and smartphones will be the driver of that success. Apple has taken the number three spot in the market. Its position is marked by the fact that it sells no inexpensive handsets. Smartphones are its sole product category, which makes its success all the more impressive. HTC has been marginalized.

HTC management has to ask itself the same question that LG, Motorola (NYSE: MMI), Sony Ericsson and Nokia do. At what point does an investment in the smartphone industry become financially foolish? At what point is it better to take and hold a 5% market share with modest R&D and marketing expenditures. Put another way, at what point is it best to surrender — at least surrender that foolish hope that there is a chance to overtake Samsung, with its colossal balance sheet, and Apple with products that come nowhere close to satisfying customer demand?

HTC was the latest smartphone company to have had a hot hand. Its sales in 2010 and early 2011 were extraordinary. Its smartphones had a number of features that made them competitive to the iPhone. HTC had unlocked the secret of making features of the Google (NASDAQ: GOOG) Android operating system competitive with the Apple OS. But it could not produce a product like the iPhone 4S or Samsung Galaxy S II. It also did not have the marketing muscle to pressure Apple and Samsung in the consumer markets.

HTC’s run is over now. That may not make sense, because it was doing so well a year ago. But Apple and Samsung have grabbed market share that they can hold because of better products and better finances.

Douglas A. McIntyre

Next quarter guidance is $0.91 to $0.97 EPS on $4.6 to $5.0 billion in revenues, while the consensus estimates are $0.89 EPS and $4.49 billion in sales.  For fiscal year 2012, Qualcomm is offering guidance of $3.55 to $3.75 EPS on sales of $18.7 to $19.7 billion; estimates are $3.59 EPS and $18.48 billion in sales. The company sees 146 to 154 million MSM units shipped in the current quarter.

The company ended its latest quarter with a cash arsenal of $22 billion or so if you include the cash equivalents and short-term investments.

Shares closed up 1.25% at $59.56 and the 52-week range is $45.98 to $59.84 and shares are trading up around $62.00 after a near-4% gain in the after-hours. 

Keep in mind that the market cap hit $100 billion today and that will drive the market well over the $100 billion mark if its holds up after the conference call.  Beating earnings estimates and raising guidance is welcomed.

JON C. OGG

We have now seen positive earnings out of ARM Holdings plc (NASDAQ: ARMH) Jim Cramer turned out to be very spot on when it came to his relative value tout in Broadcom Corporation (NASDAQ: BRCM) with its post-earnings reaction being up 7%.

Options traders are braced for a move of up to about $2.00 in either direction based upon the monthly expirations of puts and calls.

With the stock near a year high, the chart does not offer any great reads right now other than that the most recent support was around $57.25 and if the news is really unpleasant then the 50-day moving average is $55.37 and the 200-day moving average is $54.02.

Analysts still lean toward a ‘Buy’ consensus for their official ratings bias.  Thomson Reuters has a consensus target (mean target) of almost $66.00.

We would probably lean twoard waiting another quarter before expecting Qualcomm to boost its dividend, which has been the same for three consecutive quarters and currently offers investors a 1.5% yield.

JON C. OGG

Sony named Kazuo Hirai as president and CEO. He replaces Sir Howard Stringer, who has run the corporation since 2005, and over the past seven years has run it into the ground.

Stringer’s biggest mistake has been to stay in two segments of the consumer electronics industry. The first is the manufacturing and marketing of LCD screens, which is a low-margin business, if not a losing one. The other is that Sony continues to make PCs, although there are a number of other PC makers with much larger market share. And, of course, there is the Apple (NASDAQ: AAPL) Mac.

During Stringer’s tenure, he was slow to get a world-class video game console into the market. PS3 sales have not been a disaster, but Sony has allowed its PS2 sales advantage to wither as Nintendo and Microsoft (NASDAQ: MSFT) have made market share gains. Whether Hirai’s engineers can upgrade the PS3 enough to take substantial market share, particularly from Microsoft, is an open question. Certainly, the process will be hard.

Stinger also made the odd move of taking over the half of the Sony Ericsson smartphone joint venture that Sony did not already own. Sony Ericsson sits in the market well behind the Apple iPhone, Nokia (NYSE: NOK) and a number of Android-powered products from electronics giant Samsung and nimble operators such as HTC. Even Research In Motion (NASDAQ: RIMM) has a better share than Sony Ericsson, which is extraordinary, given the Canadian company’s missteps. Stringer believes that Sony smartphones somehow can be tethered to its content and consumer electronics products. In other words, there is a hidden synergy between Sony’s current businesses and the smartphone company it has taken over in full.

Sony lost its lead in a number of consumer electronics arenas a decade ago. Stringer made the problem worse as Sony’s attempts at innovation failed. Now Hirai has to make Sony a success again, and that is too much to ask of any executive.

Douglas A. McIntyre

Thomson Reuters has estimates of $0.19 EPS and $18.21 billion.  Keep in mind that this is the “money quarter” because of the holidays.  Amazon offers guidance usually and the estimates for the current quarter ahead ar $0.33 EPS on $13.41 billion in sales.  For all of 2012, the consensus target is $1.83 EPS and $65.42 billion in sales.

The big question we have is ultimately on margins, but we are more focused than just that tease.  The Kindles are reportedly sold at losses or razor-thin margins.  It is a “given the razor free and sell them lots of razor blades” model.  With millions of units now sold, we just have to wait and see what comes from Mr. Bezos.  The other issue is the endless costs of mail and packages. For the die-hard customers, Amazon often loses money on its mailing and UPS rates.

Amazon’s chart is at a critical juncture.  The key 200-day moving is higher at $202.30 while the 50-day moving average is lower at $185.81. With shares close to $192.00 today, the 52-week trading range is $160.59 to $246.71.

Analysts still have average price targets which are higher and the consensus mean target from Thomson Reuters is “Buy” oriented with a $233.90 target.

Options traders appear to be braced for a move of $11 to $12.50 ahead of earnings if you use the monthly options prices in puts and calls rather than the weekly expirations. Frankly, it seems as though the options traders may not be pricing in enough of a move because this quarter has the huge Kindle wild card associated with it.

JON C. OGG