INSTANT VIEW: Apple, eBay unveil quarterly earnings

LOS ANGELES (Reuters) - Apple Inc and eBay unveiled quarterly earnings on Wednesday, offering a mixed picture amid a broad downturn in the technology industry because of a slowing global economy.

Apple beat expectations with first-quarter earnings and gave an outlook that cheered investors, sending its stock higher.

In contrast, eBay posted lower fourth-quarter earnings and gave a disappointing forecast for the current quarter.

The results cap a tumultuous month for Apple, which is facing increased concern from investors about slumping consumer spending and the company's succession plan with Chief Executive Steve Jobs taking a medical leave of absence until June.

COMMENTARY ON APPLE:

ASHOK KUMAR, ANALYST, COLLINS STEWART

"The trailing quarter is better than expected and the outlook is better than feared, and so it's a relief on multiple fronts.

"The iPod momentum continues although at a slower pace. But given the macro backdrop I think it's the best we can expect.

"On the Mac, revenues are flat, year on year, which is a meaningful deceleration but on a unit basis they still continue to outperform the market.

"But the primary upside continues to be on the margin. I think, relative to the guidance, that continued to generate most of the earnings upside. That should in itself get them some support for the stock.

"I don't think it's a blip but they have been able to maintain margins in the mid 30s as opposed to the low 30s.

"And as long as the price cuts trail the building material decline, gross margins should hold up at these levels. We have excess supply of key components...so the pricing trends will continue to be in Apple's favor.

"They are not going to be able to replace Steve Jobs, I think that's clear, but if they get an operationally oriented CEO, I think the strength of the product pipeline should sustain Apple's financial momentum for the foreseeable future.

"Steve is leaving the company in its best shape in history. Yes, the management changes will create some uncertainty but I think people should focus on the strength of the company's product line and the track records of its execution."

STEPHEN MASSOCCA, MANAGING DIRECTOR, WEDBUSH MORGAN

"The number was significantly better than the Street was looking for and the stock is immediately up 10 percent in the after-hours market.

"It's a blowout number and there might have been a lot of people who were either short the stock or out of the name because of the Steve Jobs news, so it was springloaded here.

"This is a rear-view looking mirror but I think it does tell you to a certain degree that its cutting-edge technology product is still selling well even though the economy is not doing well.

"There are a few companies out there that continue to do well and are not particularly economically sensitive, and Apple is clearly a case of products that consumers are not cutting back on."

SHAW WU, ANALYST, KAUFMAN BROS

The results "look very strong. It looks like they beat both on the bottom line and on the top line and it looks like Macs and iPod in particular beat expectations. It looks like iPhones came in a little light.

"There was a similar fear (about shrinking margins) last quarter. I think one of the things that's really helping them is that the component environment has also been very favorable. The inputs into their products -- processors, memory, flash, panels -- pricing on those products has come down a lot and that enables Apple to maintain their margins even though they are selling a lower-end mix."

The change in leadership "is always going to be a concern and Steve is very important to the company. But we believe that Apple over the past 10 years has built a very deep bench. Steve's thinking and style -- innovation, hard work, making things simple and easy to use -- those things have been ingrained in the culture. Apple has an uncanny ability to attract those kinds of people.

"They could price their products a little more aggressively but as you can see from the results and the guidance, their strategy is not necessarily to be all things to all people but to focus on those markets that make sense for them."

BERNIE MCGINN, CEO, MCGINN INVESTMENT MANAGEMENT

He said that overall revenue and iPod sales looked stronger than expected, even if iPhone sales of 4.4 million were well below analyst expectations for 5.5 million.

"I would think the Street would be relatively comfortable with that after the Steve Jobs melodrama of the last few weeks. It's not a one-man company any more. They'll do fine without Steve jobs," said McGinn, whose company holds about 15,000 shares of Apple in its roughly $70 million under management.

He said that Macintosh sales were right on target while iPod sales were 3.7 million over what the street was looking for while iPhone missed.

"Its not the number they wanted and I'm sure its disappointing but at the end of the day the price of Apple shares really reflects the company getting beat up. That doesn't seem to be the case today."

YAIR REINER, ANALYST, OPPENHEIMER

"It was a great quarter and I think better than most people expected. I would say iPod sales were well ahead of the consensus. Mac sales were strong, iPhone was a little bit softer than I hoped but people were braced for that. This management team has always been conservative in the way it's guided. In that context, the first quarter forecasts are quite encouraging.

COMMENTARY ON eBAY:

YOUSSEF SQUALI, MANAGING DIRECTOR, JEFFERIES & CO

"While they met their guidance, a key metric was weaker than expected, and that is GMV (gross merchandise volume). It declined, both in the US and internationally, more steeply than expected. The lack of visibility is causing them to only guide to Q1, which is not a positive indicator.

JEFFREY LINDSAY, ANALYST, BERNSTEIN RESEARCH

"They missed on revenues and made it up by cutting expenses. So it's a miss on revenues, they met consensus on earnings. The real story is they are guiding down a lot, very pessimistic guidance for 2009.

"The results probably would be viewed as a little bit of a disappointment. The very low guidance will probably cause a bit of concern across the online retail sector. We think Amazon is probably doing much better than eBay, relatively speaking."

MARTIN PYYKKONEN, ANALYST, WUNDERLICH SECURITIES

"It's pretty bleak in terms of outlook -- not surprising

given everything that's going on.

"It's not a bleak, they're going out of business story. It's more of a how can you regenerate any growth, and you have a few things staring you in the face that are preventing that.

"I think the challenge here, and what's going negative for them fundamentally, is that there's just more fixed price revenue. It was 49 percent this quarter, 46 percent last quarter and 42 percent in the year-ago quarter.

"They're looking more and more like just another a fixed price retailer.

"There is just less velocity and less business being closed. Part of it is because there is just too much fixed price revenue. Frankly, eBay is almost an inconvenient way to buy a fixed priced item."

DOUG RILEY, SENIOR PORTFOLIO MANAGER, BOSTON ADVISORS INC

"With eBay, the earnings came in line, but revenue looked a little light. I suspect that to an extent would weigh on the stock. Their outlook going forward is light relative to expectations."

(Reporting by Gina Keating, Lisa Beartlein and Sue Zeidler in Los Angeles, and Karen Jacobs, Leah Schnurr, Sinead Carew and Deepa Seetharaman in New York; Editing by Edwin Chan)