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NEW YORK (
) -- "When you're dealing with earnings, it's all about the expectations," Jim Cramer told the viewers of his
TV show Thursday, as he outlined the pecking order for how some high flying tech stocks fared after they reported their quarterly results, and what to expect in the future.
At the top of the heap was
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS. Cramer said Apple shares ran up ahead of the quarter, as expectations soared, and then sold off, even after delivering blowout results.
In the case of
, the company also beat expectations, but shares had not run up prior to the results, so the stock was bid up after the announcement. The same pattern was repeated in
Then there was
, where the expectations were too great, and the company only met expectations. Shares of F5 were slashed by 31 points after the company reported on inline results.
Turning to the earnings misses, Cramer said
reported numbers nowhere near expectations, and was subsequently slaughtered. A similar pattern was seen in
, another Action Alerts PLUS name. In these cases, Cramer said there were low expectations, as the markets see these businesses in secular decline. Even with decent earnings, no one cares, said Cramer.
Finally, there was
, a company that's transforming itself from a maker of PC style DRAM memory into a maker of the flash memory used in tablets and smartphones. In this case, Cramer said there were no expectations, meaning that Micron can pleasantly surprise investors as business improves.
More Growth Ahead
In the "Executive Decision" segment, Cramer sat down with David Aldrich, president and CEO of
, a smartphone component maker that's up 600% since Cramer first got behind the stock on Dec. 12, 2008.
Aldrich said the market is still in the early stages of major upgrade cycles, with smartphones only accounting for 20% of all phones sold, but predicted to reach 50% by 2014, and tablets, a category that didn't exist a year ago, now growing between 70% and 80%.
Skyworks currently does business with all of the cell phone manufacturers, said Aldrich, with the company's chips excelling in 3G, 4G and wifi connectivity for just about every mobile device imaginable. He said Skyworks components use less power, are more reliable and best of all, come in the smallest of form factors.
When asked about the company's quarterly results, which were strong during a period that's historically been weak for the company, Aldrich said that the growth of smartphones and tablets has far exceeded the traditional seasonality of older 2G feature phones.
Skyworks has also been able to increase the dollar amount of its products that goes into each phone sold, which has bolstered the company's gross margins and bottom line.
Finally, when asked why the market doesn't seem to realize Skyworks' strong position, Aldrich said that in the old model, cell phone component makers were seen as low cost commodities. But in the new, smartphone world, Skyworks' components are highly integrated and specialized thanks to years of research and development, which has now allowed the company to gain a lot of market share.
Continuing his "Eye on Energy" series, Cramer put the oil refiners into his "Sell Block", telling viewers they should avoid this tough business. He said stocks like
have both had big runs since September thanks to increased utilization rates, but that trend can't last forever.
Cramer explained that as the price of crude rises, it becomes harder and harder for refiners to maintain their margins. As prices head still higher, demand falls as driving habits change. That leaves little growth for this beleaguered group.
Cramer said the only refiner he will recommend is
, a company which also operates 4,800 gas stations and convenience stores in the Northeast and Midwest. Cramer last recommended Sunoco on April 12, 2010 and since then shares have risen 34%, but Cramer said the growth at Sunoco is not done.
Sunoco has been cutting costs and raising cash, while also selling some of its refineries which has left its two remaining refineries in Pennsylvania running in the "sweet spot" for profits at 94% of capacity. The company also has a 33% stake in Sunoco Logistic Partners and a chemical business to boot.
Like so many companies in the oil patch, Cramer said Sunoco's parts are worth more than the whole, which leaves many opportunities for the company to create further value for its shareholders.
Waiting for Auto Recovery
Cramer spoke with Charles Bunch, CEO of
, a company that just delivered a three cents a share earnings beat on revenues that increased 8.4%. Shares of PPG are up 79% since Cramer first recommended it in June of 2009.
Bunch said PPG had an excellent quarter, delivering record sales and earnings despite many of the company's end markets not yet returning to their pre-recession levels. He said as industries like autos continue to ramp higher, PPG will be able to leverage their cost cutting and supply chain efforts to deliver spectacular results.
When asked about Asia, Bunch said the Asian countries have export-led economies, but are now showing strength domestically as well. In the case of China, Bunch said that country is now the largest auto market in the world and PPG is there to supply its coating needs.
Turning to the company's $2 billion in cash, Bunch said PPG remains committed to its dividend and stock buyback programs, but is mainly interested in finding acquisitions to further grow its business.
Bunch also noted that PPG is talking with natural gas suppliers about locking in its fuel costs at very low prices and possible even using the gas that lies under its own properties in the Marcellus shale region of the country.
Cramer continued his recommendation of PPG.
Cramer was bullish on
He was bearish on
Housing on the Mend
In his "No Huddle Offense" segment, Cramer commented about the housing market. He said with December existing home sales up sharply, continuing a six-month uptrend, it's clear that the negative pundits who predicted a collapse in the sector after the federal tax credit expired were dead wrong.
Cramer said these good numbers can't be denied, and with the average selling price of a home up 0.3% in 2010, the first gain in four years, Cramer said those who kept investors out of the housing market over the past six months owe us an apology.
"There's no accountability," said Cramer, but it's clear that the housing market is on the mend.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Apple, Intel.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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