AAPL : Q1/2012 Massive numbers and History of the $400B barrier

Apple does it again: Surprised Wall Street yesterday, when AAPL presented a jump of more than 100% increase in profit and revenue line is equally impressive - as part of its financial fourth quarter of 2011. In light of the results, the company's stock was sent to an 8% rise in late trading on Wall Street - as it reaches a new all-time peak.

"Into 2012, I expect the strengthening of the iPhone, iPod - Touch and the iPad. Apple has more possibilities to exploit opportunities, including opening new retail stores and the expansion of additional channels", refers to Henry Sosnto, an analyst at Gabelli & Co for optimism in the report.  "I'd say AAPL have more opportunities in emerging markets, and is still very far from exhausting all the tasks which it can expand," he added. What to do with the money?

And  what enthusiasm? Apple reported a 73% jump in revenues to -46.33 billion, and net income of 13.1 billion (or 13.87 dollars per share) - a jump of more than 100% over same quarter last year.

The company introduces more cash flow of approximately -97.6 billion, which many on Wall Street wondering whether the company will use a distribution of a dividend or repurchase (buy-back) of some of its shares. Apple's CFO, Peter Oppenheimer, declined to address the issue directly to the conference call with analysts after the release of reports.

"While many believe that Apple will repurchase extensive, we estimate that less thought," notes Michael Ioshikami, CEO of YCMNET. "More likely Apple will pay grant one - time, rather than continuing dividend to shareholders."

As for individual sales of its flagship products, Apple surprised yesterday when he reported a 128% increase in sales of iPhones (about 37 million units total). Despite the strength in sales, many wonder if the company has nowhere to go - after such a successful quarter.

"Beautiful things will happen to Apple later this year too," says Michael Blackie, an analyst at Canaccord Genuity. "The company is still expanding geographically and trying to market the iPhone 4 in China, and only started selling it in January. This means that it will be reflected in its results in March next."

Those are good news, let us check what we can learn from the history of  companies reached $400B barrier:

Microsoft (MSFT) was the largest public corporation in 2000, with market cap of $586B. Today Microsoft is worth $250B.

General Electric (GE) replaced Microsoft as the largest public corporation, with market cap of $477B. Today the company is worth $202B.

Intel (INTC) market cap reached $424B in 2000 compared to $134B today.

APPLE (AAPL) market cap today $420B, the stock increased in value over 300% in the last three years.

Is it sustainable?

I don't know.

P.S: Apple is a Great Company but I expressed some of  my doubts in the past.

2012: Great forecast for Alcatel Lucent (ALU), Cisco (CSCO) , Juniper Networks (JNPR), Siemens (SI) , Ericsson ( ERIC)

Lightwave magazine published today,  Optical industry trends for 2012.

Explosive Bandwidth Growth will continue in 2012 at least on 2011 rate, as both wired and wireless networks were  stretched  as consumers continued to adopt intensive bandwidth consuming  technologies at fast pace.

The Lightwave article is in a good agreement with our article from October 25, 2011 regarding Broadband Equipment Market Grow by 40% till 2015.

                 Optical supply chain for telecommunications becomes more on-demand supply chain model, with widespread adoption of vendor managed inventory (VMI) methods or other demand-pull systems.The main challenge for carriers and network equipment manufacturers (NEMs) has not been the recent growth in bandwidth demand itself, but the fact that the growth has come in fits and spurts – making forecasting unpredictable at best. As a result, many in the optics industry have begun to adopt an on-demand supply chain model, with widespread adoption of vendor managed inventory (VMI) methods or other demand-pull systems. 

                  Carriers become aware of self-aware networks

Many consumers are not willing to pay more for services, even though they use more bandwidth every year. As a result, carriers must operate their networks more efficiently. One of the best ways to accomplish this goal is to more proactively manage bandwidth provisioning in the optical domain. This is why “self-aware” networks gained the attention of most operators in 2011 and why they represent a major evolution in transport network design. In these new networks, optical wavelength connections will be dynamically created, re-routed, or removed according to local network bandwidth needs. Self-aware capabilities will drastically reduce overall network operating costs for the carrier.While self-aware networks were still in development in 2011, first deployments could start in late 2012 or early 2013. Operators now know what a self-aware network looks like, what it can do, and what it will cost. This coming year will see operators deciding how to best integrate the technology into their next-generation networks and selecting their preferred equipment for full commercial deployment in 2013. 

        40G reaches mainstream, with 100G close behind

In 2011, 40G deployments continued at a rapid pace with strong demand from China and EMEA. The main driver in China was the need for greater overall Internet speeds, while EMEA’s demand was driven by rising sales of tablets and smartphones. A lot of NEMs are talking about 100G, but 40G is now being deployed all over the world and will continue to play an important role in networks once 100G is readily available. The short-distance market has been figured out and could see initial deployments in late 2012. But the long-haul market is still unclear. 

              Tunable networks now the norm

The entire industry is seeking components that are smaller in size, consume less power, and provide improved functionality, while simultaneously supporting the continued aggressive price reduction trends in the telecommunications equipment market. With this in mind, it is no wonder that the tunable XFP transceiver saw rapid deployment in 2011. At this point, the tunable XFP has all but replaced the 300-pin transponder, and we will see continued growth for the tunable XFP throughout 2012.

Ciena Corp. (NASDAQ: CIEN) strengthens its positions in UK Telecom Market.

In addition to the wins in BT and AAPT in Carrier Ethernet platforms Tenders

Ciena Corp. (NASDAQ: CIEN) says that Ethernet aggregator Vaioni has selected equipment from its Carrier Ethernet portfolio to bring enhanced Ethernet service offerings to enterprises, carriers, and cloud providers. Vaioni is an independent provider of next-generation Ethernet services, VPLS, and private WAN services across the UK

Ciena’s Carrier Ethernet Service Delivery (CESD) portfolio has been rolled out across Vaioni’s UK network infrastructure, enabling the operator to extend the reach of its core network connectivity in its home market, deliver a full suite of next-generation Ethernet services, and maximize service availability while reducing the cost and complexity of turning up new services

After a detailed analysis and evaluation, Vaioni has chosen to standardize on Ciena’s Carrier Ethernet Service Delivery portfolio for all network infrastructure equipment across its UK network, Ciena asserts. The deployment of Ciena CESD equipment is now complete - including a 100% swap of old equipment.

Vaioni selected Ciena’s 3916, 3920, and 3930 Service Delivery Switches, as well as its 5150 Service Aggregation Switch, to build a next-generation Ethernet access and aggregation architecture capable of delivering a full suite of Ethernet services (E-Line, E-LAN, E-Tree) to the wholesale carrier and enterprise markets.

The 3916 and 3920 platforms serve as customer demarcation devices, ensuring quality of service (QoS) required to correctly handle multiple customer applications.

Ciena’s 3930 and 5150 platforms are being used to deploy 10-Gbps fiber-optic rings in key metro areas across the UK. The platforms use G.8032 Ethernet Ring Protection Switching to maximize service availability on the network. 

Ciena compliance to G.8032 is a big advantage over competitors.

Shall Greece design a new drachma?

On Friday, December 9, 17 countries of the euro zone formally agreed to run only minimal budget deficits in the future and gave the European Court of Justice the right to strike down national laws that could lead to governments overspending.

“We have a very good result,” said the president of the European Parliament, Jerzy Buzek.

Europe might be on sounder fiscal footing after Friday's historic pact for more coordination among nations. The markets had big hopes on the results: CAC40 and EUR Stoxx 50 were colored green.

Good for the future, but the drastic steps did little, however, to bring down the sky-high bond yields plaguing some European nations now.

Europe has two problems—the weak economy and the financial phenomenon.The financial problem can be fixed in the shorter term. The other one isn't going to be. Even Europe solves its financial crisis and avoids a breakup; it still has to deal with its economic doldrums. Across the Continent, nations are cutting their budgets, which could weigh on growth.

What of the embattled euro itself? It is likely to stay under pressure because even the so-called solutions to the fiscal disaster are negative for the currency. Austerity measures, for instance, will likely cause the euro-zone economy to slow, which is typically bearish for a currency. And if the ECB steps in to buy bonds, that could cause the euro to drop as well.

I like Greece, see my notes from our last October visit to Crete , in current EUR situation it is the time for Greece to design beautiful new drachma banknotes.  

Watch Friday, December the 9th

We are in a very interesting week for the markets.

Commodities will be the stars of the week

IMHO gold is a better long term bet than silver.

The advantage of Gold and Silver are that they are unprintable.

Companies are upping Gold Forecasts:

- JP Morgan

- I Know First

- Goldman Sachs
- Jim Cramer

At high level of negativity that surrounds the current investing and trading environment, the stock market could not continue  to hold up  despite continued bad news out of Europe, weakening economic data in Asia,and decent but not great news in US.

Good news for Ciena Corporation (NASDAQ: CIEN) and EZchip Semiconductor Ltd. ( Public, NASDAQ: EZCH )

In recent days it was announced that  UK BT and Australia AAPT selected Ciena for Carrier Ethernet services build-out.
It is in a good agreement with analysts estimations that though overall Telco Capex to be soft, the carrier Ethernet Equipment market is expected to be an area of strength as carries increasingly use Ethernet gear to cope with soaring Internet traffic instead of more costly legacy technology.
The UN's Broadband Commission for Digital Development set target for Broadband Equipment Market to grow by 40%.
I wrote about it on October 25:
http://stockpicks247.blogspot.com/2011/10/good-news-for-alu-csco-jnpr-si-eric.html
Ciena (NASDAQ: CIEN) as equipment maker and EZchip Semiconductor Ltd. ( Public, NASDAQ: EZCH ) chip maker are in the same boat, that depends heavily on carrier Ethernet demand.

Ciena Corporation  (NASDAQ: CIEN) is a provider of communications networking equipment, software and services that support the transport, switching, aggregation and management of voice, video and data traffic. The Company’s packet-optical transport, packet-optical switching and carrier Ethernet service delivery products are used, individually or as part of an integrated solution, in networks operated by communications service providers, cable operators, governments and enterprises globally. Its communications networking products, through their embedded software and its network management software suites enable network operators to deliver enterprise communication services. The Company operates in four segments: packet-optical transport, packet-optical switching, carrier Ethernet Service delivery, and software and services. On March 19, 2010, the Company acquired optical networking and Carrier Ethernet assets of Nortel’s Metro Ethernet Networks business (MEN Business).

BT Group PLC (LSE: BT.A) is getting ready for the 100-Gbps era and beyond, judging from the news that it’s picked Ciena Corp. (NASDAQ: CIEN) to supply packet-optical transport equipment for its core 21st Century Network (21CN).

By deploying products from across Ciena's transport and switching portfolio, including 6500 and 4200 platforms, BT can take advantage of Ciena's multi-layer, multi-domain management suite – OneControl. The unified management system will be integrated into BT's existing operations support systems, offering service lifecycle control and monitoring for the entire network. 

Ciena has been a strategic supplier to BT since 2003. The company provides high-capacity transmission and switching equipment, which serves as the foundation for much of BT's existing network infrastructure .

BT to increase core network capacity at 21CN

Now BT plans to install intelligent optical transmission infrastructure based on Ciena’s 6500 packet-optical platform equipped with WaveLogic coherent optical processors. Ciena’s coherent technology supports 10G and 40G/100G wavelengths working side by side.

AAPT selects Ciena for Carrier Ethernet services buildout

Australian carrier AAPT has picked Ciena Corp. (NASDAQ: CIEN) to upgrade its nationwide fiber-optic network with next-generation Carrier Ethernet service delivery capabilities.

The upgrade will help AAPT to meet growing demand from businesses across Australia for high-quality Ethernet business services, providing reliable Ethernet private line and wide area LAN services to retail service providers. It will allow AAPT’s customers to deliver high-bandwidth, low-latency applications such as streaming video, cloud networking, business-to-business commerce, wireless backhaul, and wholesale connectivity.

With construction of Australia’s National Broadband Network (NBN) underway, AAPT says the upgraded network will address both pent-up demand for ultrafast broadband services, and position AAPT as a competitive supplier in Ethernet business services when the NBN becomes generally available.

The network will be built on Ciena’s 5410 and 5150 service aggregation switches, augmenting AAPT’s existing IP/MPLS core network. The new Carrier Ethernet network will deliver transport-class Ethernet services that far exceed the quality-of-service associated with traditional Ethernet while improving the service flexibility and speed-to-market delivered via traditional TDM networks.

“AAPT is focused on meeting our customer demands and expectations for the highest-quality Ethernet services in the Australian market. With this network build, we’re able to meet those goals and even offer customers strict Service Level Agreements, while maintaining low network operations costs. With a network scalable to the terabit-level, we can virtually meet any future demand for high-performance applications that may be enabled in the era of NBN,” said David Yuile, CEO, AAPT.

Switzerland to shut down nuclear power by 2034

Today more than 40% of  Switzerland energy comes from nuclear power plants.
The vote in upper parliament chamber to shut down the nuclear power plants, followed a June decision by the lower chamber of parliament to back an exit from nuclear energy recommended by the government, which had earlier frozen plans for a new construction programme after the explosions and meltdowns at the Fukushima Daiichi nuclear power plant.

Green Cross International's president Mikhail Gorbachev, welcomed Switzerland's decision.

"I applaud Switzerland for taking this brave step towards ending its reliance on nuclear energy,"  said Michael Gorbachev, in a statement.

I wrote about similar Germany and Japan decisions to phase out nuclear energy in this blog.