5 Winners and Losers of the Week in Business
The PC -- Loser
It wasn't a good week for the personal computer.
The bad news began on Monday, when industry tracker Gartner reported that worldwide PC shipments fell 5 percent during the final three months of the year. Wasn't this supposed to be the quarter when desktops and laptops bounced back? Wasn't the hype around October's Windows 8 roll-out supposed to be the magical elixir to bring the industry back from the dead?
The week also closed on a sour note. Intel (INTC) reported uninspiring guidance on Thursday night. The microprocessor giant is forecasting softer revenue for the current quarter and fiscal year than what the market was targeting.
Intel had it extra rough: It actually leaked its disappointing earnings report to some tech journalists several minutes before the numbers became public. It was an honest mistake, but it's just one more thing that the PC industry got wrong outside of the chatter over a potential Dell (DELL) buyout.
Satellite Radio -- Winner
It took a lot longer than it should have, but Liberty Media (LMCAD) finally acquired a majority stake in Sirius XM Radio (SIRI).
The company has been vocal about its plans to take a majority stake in the satellite radio provider since early last year, but it wasn't until earlier this month that regulators gave Liberty Media clearance to boost its 49.8 percent stake up to the 50.5 percent position it now enjoys.
Liberty Media's John Malone is a collector of media assets, but he has also acquired control of companies simply to spin them off to shareholders in tax-advantaged transactions.
Apple (AAPL) -- Loser
The world's most valuable technology company got cheaper this week -- it's shares were down by more than 3 percent through the first four trading days of the week -- after a Wall Street Journal report claiming that Apple was cutting its orders for iPhone 5 screens in half this quarter.
Things have gotten so bad for Apple that analysts see the iEverything company posting a decline in quarterly profitability when it reports next week. Wall Street now sees net income of $13.41 a share, well below the $13.87 a share it rang up during the prior year's holiday quarter.
LeapFrog (LF) -- Winner
You don't need to wait until next month's LeapFrog financial report to see that the maker of educational electronics had a hot holiday quarter.
NPD Group's Retail Tracking Service is out with its annual list of the best-selling toys of 2012, and LeapFrog claimed three of the top four spots.The LeapPad Explorer, LeapPad2 tablet, and Explorer licensed software were the big winners.
Who says that traditional playthings are dead?
Chipotle Mexican Grill (CMG) -- Loser
The whole "priced to perfection" argument is flawed. Sometimes a stock with a lofty valuation moves even higher because it posts better than expected results. However, sometimes those same companies tumble when they fall short.
Chipotle isn't cheap. It trades at a hefty 33 times last year's earnings, and a still steep 28 times forward earnings.
The fast-casual dining chain offered preliminary results for the quarter that ended in December, and they're not pretty. Yes, revenue climbing 17 percent on heady expansion and a 3.8 percent spike comparable-store sales was better than expected. But guiding investors to expect 6 percent to 9 percent growth on the bottom line falls well short of the 15 percent spurt that Wall Street was forecasting.
Food costs spiked during the quarter, leading the margin crunch. Wasn't Chipotle so popular that it could pass on these increases to its hungry customers? The long queues that build in its stores around lunchtime suggest that there's some pricing elasticity here.
Motley Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned, except for Liberty Media. The Motley Fool recommends Apple, Chipotle Mexican Grill, Intel, and LeapFrog Enterprises. The Motley Fool owns shares of Apple, Chipotle Mexican Grill, and Intel.