Apple 4Q Earnings

Apple posted earnings of $4.64 per share compared to
expectations of $4.08. This quarter is yet another record
for AAPL and we expect that with holiday season
approaching this will only go up next quarter. Net income
was up 70% year over year with revenue growing 67%.

Apple sold 14.1 million iPhones from July through september beating
analyst estimates of 12 million. CFO Peter Oppenheimer stated "had the
company been able to make more iPhones, that number would have been even
higher". With strong catalysts looking forward such as the new line of
iPods, the iPad and possible Iphone contracts with other service providers.

~Rory

Bank of America Q3

On Tuesday Bank of America reported a net loss of $7.65 billion, or -77 cents per share. This net loss included a non-cash goodwill impairment of $10.4 billion. When excluding this non-reoccurring charge, the company reported a net income of 3.1 billion or 27 cents per share. The impairment charge resulted from the Dobb-Frank Consumer Protection Act that limits the fees a bank can charge for debit and credit card use. The normalized earnings of 27 cents per share beat the street consensus of 16 cents per share.

For the quarter Bank of America strengthened its tier one capital ratios, increased asset management fees from the Merrill Lynch acquisition, and the investment bank remains number two in global investment banking fees. On the other hand, due to financial reform, Bank of America expects to see declines in the Global Card Services segment and in fees collected for overdrafts.

Bank of America’s share price was hit hard even after the positive earnings surprise because of developing news that the company may have to repurchase bad loans that were not serviced properly by Countrywide. The Federal Reserve Bank of New York and Pimco are two the major players who are putting pressure on Bank of America to repurchase the loans. The amounts to be repurchased in unknown right now, but investors fear it could be billions.

Joe Doran

Western Digital Rally

Western Digital Corporation rallied 8.14% today on news that its main rival Seagate Technology has received an offer to go private. Reports claim that this would be the largest LBO of the year if the deal were to go through. There have been no official releases from Western Digital on who made the offer, however Western Digital has confirmed that they have hired Morgan Stanley and Perella Weinberg Partners for financial and legal advice.

This news break has comes at an interesting time for UASBIG, as our Tech/Telecomm analysts have demonstrated hesitation on WDC’s ability to compete with Seagate. This coming weekend will leave time for UASBIG to further evaluate the situation before market open on Monday.

~Chad

Alcoa Reports 3Q Earnings

Alcoa reported 3rd Quarter earnings on Thursday beating analyst estimates for adjusted earnings per share. Income from continuing operations came in at $61 Million or $.06 per share, and revenue increased 15% versus 3Q'09. Adjusted EBITDA was $602 Million with an 11% EBITDA margin. This rise in revenue can be attributed to higher volumes in the aerospace and construction industries. LME aluminum prices still continue to hurt Alcoa's bottom line but cost cutting strategies have helped offset these price effects.

Alcoa still remains extremely healthy in terms of cash flow. FCF remained high at $176 Million, and debt to cap was 270 bp lower at 35.7%. Alcoa also reduced their debt by $491 Million and extended their debt maturity profile.

Looking forward UASBIG expects LME Aluminum prices to rise in accordance with global economic growth. Alcoa is positioned very well to take advantage as the market for Aluminum continues to recover, but can also survive if these prices continue to lag, as evidenced by the past 3 quarters. Our main and only concerns are fears of deflation and stagnant economic growth. Aside from these concerns we still believe that Aloca remains a great position in our portfolio.

-Thomas Boeje

Apple beat earning estimates of $3.11, posting $3.51 per share. Revenues came in at an all time high of $15.7 beating even holiday Quarters and much higher than analyst expectations of $14.74. Revenue and earnings were the highest Apple has seen in the 34 year history of the company. Profit was reported at $3.25 billion, a 78% increase over last year.

Apple has continued to beat estimates and this quarter had a boost from iPhone and iPad sales. The big story looking forward is Apple's recent revenue guidance for the next quarter. Analysts were expecting apple to guide around $17 billion in revenue for Q4. However Apple has raised guidance to $18 billion indicating that revenue will likely come in at the higher end of $19 or $20 billion.

Apple's international expansion is also paying off very nicely. Revenue in Europe was up 66% compared to last year while sales in Asia Pacific are up 160% year over year.

I believe Apple still has a very promising future and give it a hold rating. With the holiday season approaching and a view that they will have other service contracts for the iPhone sometime in the next year the upside is promising. Apple still seems to give consumer's an unparalleled experience with mobile phones and now the iPad. More people fall in love with Apple products daily and I do not think they are at full potential yet.

Rory

Verizon Communication (VZ) Q2

Verizon Communications posted second quarter earnings of $0.58 a share beating analyst expectations by 4.32%. Second quarter highlights for the communications company included 9.8 billion dollars in cashflow from operations up nearly 30%, and 5.5 billion dollars in free cash flow up nearly 77% from 2Q FY2009.

Wireless service has proven to continue to strengthen throughout the quarter. The increase in data subscribers continues to be a driving force behind Verizon's gross profit. Through personal observation, it appears as if Verizon Wireless is restructuring their business plan to make it nearly impossible to not have a data plan which will allow for increased profitability.

Verizon remains to be strong position in our portfolio. The market value of the position has been relatively flat, but we continue to benefit from Verizon's $0.47 dividend. Unless a dire need to free capital arises, I am confident that this position will remain profitable for UASBIG and should remain in the portfolio.

Chad

Gilead Misses 2Q Estimates

Gilead Sciences failed to meet the Street’s 2Q estimates, despite experiencing a 25% growth in profit for the quarter. The company also lowered their sales guidance for the year going forward due to continued distress in the Euro markets.

Net income for the quarter was $709.1 million, up from $569.1 million a year ago. Revenue increased 17% to $1.93 billion, missing the Street consensus of $1.96 billion. Gilead cut their 2010 net sales projection to a range between $7.3 and $7.4 billion, from a range of $7.4 billion to $7.5 billion. The company insists that business fundamentals are as strong as ever, but the current economic situation continues to be a constraint on revenue. Company management also restated their desire to pursue acquisitions or partnerships that can solidify their product pipeline with the wave of patent expirations to come in the near future.

-Dave Siegel