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By Jason Stipp and Jeremy Glaser | 01-17-2013 04:00 PM

Unpleasant Surprises

How bad was bad news this week from Apple, Boeing, Bank of America, and others?

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to The Friday Five.

It was surprise, surprise in the market this week, and not always in a good way.

Here with five unpleasant surprises is Morningstar markets editor, Jeremy Glaser.

Jeremy, thanks for joining me.

Jeremy Glaser: Jason, glad to be here.

Stipp: So, what do you have for The Friday Five this week?

Glaser: Well, we are going to talk about Apple, UPS, eBay, Boeing and finally Bank of America.

Stipp: So, Apple had some unpleasant news, or news that was taken unpleasantly by a lot of investors, when they said that they weren't going to ship as many of the screens for the iPhone 5. What are the implications here?

Glaser: Last week there were some news reports in The Wall Street Journal and elsewhere that Apple had slashed its orders for the screens for the iPhone 5 by as much as 50%. And the stock sold off pretty sharply on this news as it was seen as a sign that iPhone demand, particularly in emerging markets, is much weaker than anyone had expected.

But our [Apple] analyst Brian Colello looked at it a little bit differently and said that we just don't know what these order cuts could mean. It could just be that Apple was trying to spread their orders around a bunch of different suppliers, worrying about a bankruptcy, particularly at Sharp, which has been undergoing some very serious financial troubles recently, and that this was more of a normal cut in inventory, that it wasn't just this dire warning that the iPhone business is about to completely explode.

The way that he looks at it, and the way to think about the stock, is that even if iPhone doesn't have the kind of gangbuster growth that it has been having before, at these valuation levels a lot of that could start to get priced in, and you don't need to see huge margin expansion, don't need to see the kind of sales growth we saw in the past in order to support where the shares are today.

And so he still thinks that the stock looks attractive, and when you look at the iPad still having a lot of growth in front of it, potential revenue from new products like the Apple TV and other things that they might introduce, he still sees the story as being pretty compelling.

Stipp: Unpleasant news for UPS in its bid for TNT. What are the details there?

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