The Street continues to mull the consequences of an explosion Friday at Foxconn, a manufacturing partner to Apple (AAPL), among others.

A report late yesterday by market research firm iSuppli’s Dale Ford suggests the incident may result in 500,000 lost iPad 2 units per month, based on the firm’s analysis of the production capacity of that facility.

As I wrote yesterday, most analysts have pointed out the vast majority of iPad 2 units are produced for Apple at Foxconn’s Shenzhen facility, not the Chengdu plant where the incident took place. Chengdu accounts for about 20% of iPad 2 production, he estimates.

Some estimates for a 2.8 million-unit hit to production are “too pessimistic,” writes Ford: “The impact of this disaster will only last for the short term, given that there are more than 10 factories in the Foxconn Chengdu plant, and because the explosion occurred on the third floor of one of the buildings.”

Kevin Dede with Brigantine Advisors this morning reiterated a Buy recommendation on Apple, writing that while “investors are right to be concerned,” the stock already prices in near-term risks. The fact that Apple was able to bounce back from the March disaster in Japan shows how “fixable and nimble” the company can be in the face of supply-chain issues.

Surprising to us was Apple’s source supply management capability and its finding alternative sources for roughly 100 components to meet requirements for the production of 18.6M iPhones. On the heels of that veritable miracle, we are hesitant to second guess the company’s June outlook that might otherwise appear bullish in the face of the current sourcing and manufacturing predicament.

Apple shares this morning are down $2.25, or 0.8%, at $332.15.

Article courtesy of Tech Trader Daily

The Street continues to mull the consequences of an explosion Friday at Foxconn, a manufacturing partner to Apple (AAPL), among others.

A report late yesterday by market research firm iSuppli’s Dale Ford suggests the incident may result in 500,000 lost iPad 2 units per month, based on the firm’s analysis of the production capacity of that facility.

As I wrote yesterday, most analysts have pointed out the vast majority of iPad 2 units are produced for Apple at Foxconn’s Shenzhen facility, not the Chengdu plant where the incident took place. Chengdu accounts for about 20% of iPad 2 production, he estimates.

Some estimates for a 2.8 million-unit hit to production are “too pessimistic,” writes Ford: “The impact of this disaster will only last for the short term, given that there are more than 10 factories in the Foxconn Chengdu plant, and because the explosion occurred on the third floor of one of the buildings.”

Kevin Dede with Brigantine Advisors this morning reiterated a Buy recommendation on Apple, writing that while “investors are right to be concerned,” the stock already prices in near-term risks. The fact that Apple was able to bounce back from the March disaster in Japan shows how “fixable and nimble” the company can be in the face of supply-chain issues.

Surprising to us was Apple’s source supply management capability and its finding alternative sources for roughly 100 components to meet requirements for the production of 18.6M iPhones. On the heels of that veritable miracle, we are hesitant to second guess the company’s June outlook that might otherwise appear bullish in the face of the current sourcing and manufacturing predicament.

Apple shares this morning are down $2.25, or 0.8%, at $332.15.

Article courtesy of Tech Trader Daily

$$$ Spain and Italy Turn Against Greece Over Reform Efforts (NYT)

$$$ Dominique Strauss-Kahn told the New York hotel maid, “Don’t you know who I am! Don’t you know who I am?” while pinning her down during the alleged sexual assault, law enforcement sources close to the investigation told FoxNews.com…“Please stop. I need my job, I can’t lose my job, don’t do this. I will lose my job. Please, please stop! Please stop!” she told Strauss-Kahn, according to law enforcement sources. Strauss-Kahn allegedly responded: “No, baby. Don’t worry, you’re not going to lose your job. Please, baby, don’t worry,” Strauss-Kahn responded, according to investigators. (Fox)

$$$ Belgium’s Debt Outlook Revised to Negative by Fitch on Political Stalemate (Bloomberg)

$$$ ‘Fear Gauge‘ Tops 20 for First Time in Two Months (WSJ)

$$$ How An Inquiry Of Goldman Might Play Out (Dealbook)

$$$ LinkedIn site has security vulnerabilities-expert (Reuters via Easy Street/Heidi Moore)

$$$ David Stockman: “The real problem is the de facto policy of both parties is default. When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts. When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well.” (YouTube)

$$$ AIG Underwriters Signal Deal May Price at Close to $30 (CNBC)

$$$ Walker: US Worse Off Financially Than Euro Nations (CNBC)

$$$ Greece to start selling domestic assets to ease debts (BBC)

$$$ More banks targeted in US probe (FT)

$$$ Carlyle Returns Record $6.4 Billion in First Quarter on Strong Dealmaking (Bloomberg)

$$$ Former Fed Monetary Chief Madigan Hired by Barclays Capital (Bloomberg)

$$$ Steven Cohen wants a five-year-old stock manipulation lawsuit filed by Canadian insurer Fairfax Financial Holdings to go away. (Reuters/Unstructured Finance)

$$$ Hintz Says Smith Barney Is ‘Checkmated’ by Krawcheck, McCann (Bloomberg)

$$$ China’s Buffett plays the long game (FT)

$$$ Senate Banking chair Tim Johnson discusses hedge funds [AR]

$$$ IBM passes Microsoft’s market cap after 15 years (Reuters)

$$$ Lady Gaga Breaks Amazon (MarketBeat)

$$$ Barack Obama’s car, nicknamed ‘the beast‘, gets stuck (BBC)

Article courtesy of Dealbreaker

$$$ Spain and Italy Turn Against Greece Over Reform Efforts (NYT)

$$$ Dominique Strauss-Kahn told the New York hotel maid, “Don’t you know who I am! Don’t you know who I am?” while pinning her down during the alleged sexual assault, law enforcement sources close to the investigation told FoxNews.com…“Please stop. I need my job, I can’t lose my job, don’t do this. I will lose my job. Please, please stop! Please stop!” she told Strauss-Kahn, according to law enforcement sources. Strauss-Kahn allegedly responded: “No, baby. Don’t worry, you’re not going to lose your job. Please, baby, don’t worry,” Strauss-Kahn responded, according to investigators. (Fox)

$$$ Belgium’s Debt Outlook Revised to Negative by Fitch on Political Stalemate (Bloomberg)

$$$ ‘Fear Gauge‘ Tops 20 for First Time in Two Months (WSJ)

$$$ How An Inquiry Of Goldman Might Play Out (Dealbook)

$$$ LinkedIn site has security vulnerabilities-expert (Reuters via Easy Street/Heidi Moore)

$$$ David Stockman: “The real problem is the de facto policy of both parties is default. When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts. When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well.” (YouTube)

$$$ AIG Underwriters Signal Deal May Price at Close to $30 (CNBC)

$$$ Walker: US Worse Off Financially Than Euro Nations (CNBC)

$$$ Greece to start selling domestic assets to ease debts (BBC)

$$$ More banks targeted in US probe (FT)

$$$ Carlyle Returns Record $6.4 Billion in First Quarter on Strong Dealmaking (Bloomberg)

$$$ Former Fed Monetary Chief Madigan Hired by Barclays Capital (Bloomberg)

$$$ Steven Cohen wants a five-year-old stock manipulation lawsuit filed by Canadian insurer Fairfax Financial Holdings to go away. (Reuters/Unstructured Finance)

$$$ Hintz Says Smith Barney Is ‘Checkmated’ by Krawcheck, McCann (Bloomberg)

$$$ China’s Buffett plays the long game (FT)

$$$ Senate Banking chair Tim Johnson discusses hedge funds [AR]

$$$ IBM passes Microsoft’s market cap after 15 years (Reuters)

$$$ Lady Gaga Breaks Amazon (MarketBeat)

$$$ Barack Obama’s car, nicknamed ‘the beast‘, gets stuck (BBC)

Article courtesy of Dealbreaker

Following a revision in Sony’s (SNE) fully-year results this morning and drop in the stock, Macquarie Equities Research analyst Jeff Loff this afternoon writes that the stock has “overcompensated” for the disappointment, and that there’s 5% upside in the shares.

However, he maintains a Neutral rating on the shares, writing that he’s waiting for a cut in Street estimates for the current fiscal year ending next March, and looking to gain greater confidence in how the company may do in 2013.

Loff notes a 23% decline in Sony’s stock since the earthquake and tsunami in Japan, and a loss of $8.1 billion in market capitalization, the stock has an “undemanding” valuation of 2.8 times projected 2013 Ebitda, and trades at just 0.7 times book value, again using 2013 estimates.

Loff thinks the total cost to Sony of the break-in to its online entertainment systems will probably be about 117 billion yen, using as a model for his estimate the 2006 break-in suffered by TJ Max (TJX). Of that, 75 billion yen is expected to be the amount for lost video game revenue due to the system outage sparked by the break-in.

Sony may end up taking a charge for the break-in costs in the June quarter, he thinks.

Loff cut his 2012 revenue and operating profit estimates to 7 trillion yen and 204 billion yen, from a prior 7.1 trillion and 237 billion, based on an expectation of 10% lower video game hardware and software sales than he previously estimated, though that might be too conservative, he concedes.

Sony shares today are down 32 cents, or 1%, at $26.73, having recouped much of its losses today.

Article courtesy of Tech Trader Daily

In case you missed it, The Wall Street Journal had a couple pieces on the gadget wars this morning: A report by Stuart Weinberg says that Research in Motion (RIMM) is on track to sell half a million units of the PlayBook tablet computer in the quarter ending this month, a feat Weinberg calls, “A respectable entrance into the competitive tablet market.”

(I should note BoyGeniusReport’s Jonathan Geller on Friday wrote that the PlayBook’s sales have “fallen far short of expectations,” citing an anonymous source at “a major big box retailer.”)

Also in today’s Journal, Justin Scheck and Ben Worthen chronicle Dell’s (DELL) failed bid to offer consumer electronics, having “pulled the plug” on initiatives such as a music player and an online music store. “Apple-like success hasn’t followed” Dell’s purchase of Zing, a software maker that was supposed to kick-start Dell’s music efforts, the authors write.

The sidebar to that piece is an autopsy of the failure of Dell’s first tablet computer, the $500 “Streak” that was roundly panned when it appeared last year. Scheck and Worthen write that anonymous sources expect Dell may delay a 10-inch version of the Streak, expected this summer, until later in the year because of necessary bug fixes.

Article courtesy of Tech Trader Daily

Shares of Autodesk (ADSK) are up 15 cents at $44.54 after the company this afternoon reported fiscal Q1 revenue and earnings ahead of estimates, forecast the current quarter’s EPS a bit on the light side, but also projected full-year revenue slightly above estimates.

Q1 revenue rose 11%, year over year, to $528 million, yielding EPS of 40 cents. Analysts had been expecting $523 million and 37 cents.

The company’s sales in the Americas rose 13%, year over year, while Asia-Pac was up 15%, and 11% excluding currency effects. Europe, the Middle East and Africa revenue was up 8%, but would have been a 10% increase excluding currency effects.

For the current quarter, the company sees revenue of $530 million to $545 million. which is better than the $528 million the Street has been looking for. EPS is expected in a range of 37 cents to 41 cents, below the average 40-cent estimate.

For the full year, Autodesk sees revenue of $2.19 billion, better than the consensus $2.17 billion.

Article courtesy of Tech Trader Daily

Shares of electric car maker Tesla (TSLA) are up $1.60, or 6%, at $27.95, a combination of a positive note today from Pacific Crest’s Erik Olbeter, and also word that the U.S. Department of Energy said it will cooperate with Tesla and other firms to accelerate the development of energy-efficient vehicles.

Pacific Crest’s Olbeter started the stock at Outperform and a $38 price target, writing that it is “well positioned to be a highly profitable, niche luxury car company.”

Everything, he writes, rests on a successful introduction of Tesla’s “Model S” and “Model X” cars, beginning in mid-2012.

“Tesla’s primary advantage, and part of the reason they are considered an innovator in this nascent market, is its proprietary battery and powertrain system,” writes Olbeter. The choice of a familiar form factor for the battery — it’s about the size of a AA battery — means the company should have much lower development costs than it would otherwise, on the order of $400 million to develop the Model S, he thinks.

The Model S, which may cost $60,000 to $90,000, depending on subsidies, “is very appealing and the price is within the range of luxury ICE competitors,” writes Olbeter. He expects it may become, “the new ‘green status symbol‘ in places like Northern California and elsewhere.” Question is, even if venture capitalists buy ‘em, will the broader public. The question is not how well the initial 20,000 units of the Model S do next year, but what comes after, whether, as he puts it, “the executives in Shanghai, Beijing and Vancouver, B.C., be driving them.”

The financial performance of the company for the next five quarters, until the Model S comes out, is irrelevant, he writes, because only then will the Street get a good handle on what Tesla may be able to sell in high volume.

As for the DOE announcement, it said the Department will form something called “U.S. Drive,” combined what had been “FreedomCAR” and “Fuel Partnership” programs in one, in order to “bring together top technical experts,” and identify “critical R&D needs.”

Article courtesy of Tech Trader Daily

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Shares of Intel (INTC) are up 38 cents, or 1.6%, at $23.93 following yesterday’s upbeat investor day meeting, during which CEO Paul Otellini and his team laid out for analysts how the company can profit from “cloud” computing and the smartphone and tablet wars.

As I noted yesterday, Intel made the case that mobile devices require more and more server resources, a plus for Intel given its healthy business in selling server microprocessors. The company also presented a time-line for its “Atom” mobile chips that suggested that future versions of the chips will not lag the company’s desktop chips by the typical two-year time frame, which might help Intel to close the gap at some point with chips from ARM Holdings (ARMH).

Today, Street research reflects those encouraged by Intel’s move, and those for whom it just wasn’t enough:

Bullish!

Glen Yeung, Citigroup: Reiterates a Buy rating and a $27 target price. He notes the company’s full-year revenue forecast included a model for $1.9 billion of software and services revenue, which is more than the $1.74 billion he’s been modeling. He also notes gross margin is expected to be at the upper end of Intel’s targeted range of 55% to 65%. As regards Intel’s Atom chip, the roadmap is on a fast track, but the 32-nanometer version of the chip, code-named “Saltwell,” will still lag 28-nanometer chips by ARM, he argues. But the 32-nanometer part at least, “puts Intel within striking range of making headway in the smartphone market, and allows them to pilot a design with partners. The 22-nanometer “Silvermount” chip, coming in 2013, “will benefit from Intel’s tri-gate technology, where the greatest performance gains occur in low power settings.”

Uche Orjii, UBS Investment Research: Reiterates a Buy rating and a $28.50 price target. Among the things he came away with was that ARM may have a hard time breaking into the PC market, given lack of legacy compatibility for applications; Intel will use its 22-nanometer Atom chips for a server line at some point; Intel’s “software ecosystem can well support porting of native ARM apps.”

Christopher Danely, JP Morgan: Reiterates an Overweight rating and a $25 price target. He writes that the PC markeontinue to be the driver for most of Intel’s revenue. He doesn’t buy Intel’s forecast, however, that PC growth in units can rise to a rate of 14%, year over year. “The PC market has been benefitting from emerging market growth for many years.” He sees more of a long-term growth rate of 11%, he writes. Danely “loves the higher dividend,” which Intel intends to increase from a 33% payout ratio as a measure of free cash flow to 40%. “We expect Intel’s dividend to remain above 3% going forward, well above the average yield of 1.8% for our semi universe.”

N. Quinn Bolton, Needham & Co.: Reiterates a Buy rating and a $26 price target. The company “is seeing strong growth across all businesses, is investing to lead across all segments of computing and continues to return exceptional value to shareholders,” he writes. “We come away from the analyst day encouraged that the company is taking all the right steps to maintain its manufacturing lead and to become a player outside traditional computing form factors. As the growth of mobile connected devices and embedded computing explodes, Intel will present an excellent value proposition to its customers.”

Tristan Gerra, R.W. Baird & Co.: Reiterates an Outperform rating and a $29 price target. The “Medfield” Atom processors suggest the company’s got the goods to compete with ARM. “Medfield’s benchmark tests highlight a very
competitive power envelope with ARM-based architectures.” He concludes, “Intel’s strong fundamentals, core manufacturing strength, flawless execution of late, and end-market diversification (notably ultra-mobile) next year warrant multiple expansion, in our view.”

Bearish!

Alex Gauna, JMP Securities: Reiterates a Market Perform rating and a $27.50 target price, describing the event as “well executed but uneventful.” The company did a good job of showing “commitment” to pursuing the advantages it has in process technology. However, its pursuit of the smartphone and tablet markets look “as disjointed as ever.”

Christopher Caso, Susquehanna Investment Group: Reiterates a Neutral rating and a $21 price target. “We left the INTC analyst day with a view that INTC clearly understands the market shifts that are underway in the PC and mobile markets, and it is actively taking steps to position the company to maintain a leadership position, particularly in low power, where it is currently behind. However, our concern is not that INTC will not outperform the competition, but rather that the playing field is becoming more level, which will make it difficult for INTC to enjoy its current pricing and margin premium, even if it does maintain a performance advantage.”

Stacy Rasgon, Sanford Bernstein: Maintains a Market Perform rating and a $24 price target. The company’s financial targets imply revenue growth exceeding 15% per year through 2013, he writes, which is “aggressive” compared to his own estimates and the consensus. Rasgon questions the logic Intel applied to emerging markets, in which more and more people are earning the money they need to buy the PC in a shorter amount of time, which, the company argues, portends continued PC growth in those markets. “However, we are unsure whether or not prior relationships (observed in developed markets) will continue to hold to such a degree, as a multitude of different form factors (e.g. tablets and, potentially more importantly, smartphones) exist today (and did not when PC penetration was inflecting in current developed markets a decade or so ago).”

Article courtesy of Tech Trader Daily