Apple shares jump after earnings smash estimates

Apple says iPhone sales jumped 128% in its fiscal first quarter; iPad sales r0se 111%. Tech shares mostly bask in the report. The Dow drops 33 before the report as Europe worries investors again. Gold and oil fall.

By Charley Blaine Jan 24, 2012 1:58PM
Charley BlaineUpdated: 5:57 p.m. ET

Apple (AAPL) shares jumped as much as 11% after hours today as the company reported a 118% gain in net income along with a 73% gain in revenue in its first fiscal quarter.

The results, which included sales of of 37 million iPhones and 15.4 iPads, came after the stock market finished down slightly as traders fretted that the negotiations on restructuring Greek debt were coming apart.

Apple reported earnings of $13.87 a share, or $13.06 billion, on revenue of $46.33 billion for the quarter. Analysts had expected $10.08 a share in earnings and revenue of $38.55 billion. The results came after Apple had missed estimates in its fiscal fourth quarter. At 5:47 p.m. ET, Apple shares were up 7.4% to $451.51. The shares had dropped $7 to $420.41 in regular trading.

Wall Street is hoping the results kick-start a market that's seemed lethargic this week after three straight weeks of gains.  Futures trading suggests stocks will open higher on Wednesday.

The Dow Jones industrials ($INDU) finished down 33 points to 12,676. The blue chips had fallen as many as 95 points right after the open. The Standard & Poor's 500 Index ($INX) was off 1 point to 1,315; the index had dropped to as low as 1,306. The Nasdaq Composite Index ($COMPX) was up 2 points to 2,787 after sliding to as low as 2,766. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 3 points to 2,434.

Article continues below.
Apple can heavily influence the market. Its shares represent some 12% of the market capitalization of the Nasdaq-100 index. And component makers for its products include a who's who of tech land, such as Qualcomm (QCOM), Broadcom (BRCM) and others.

Broadcom was up 3.4% after hours to $36.40 after rising 76 cents in regulat trading. Qualcomm had climbed $1.17 after hours to $59.85.

Rivals such as Google (GOOG), whose Android operating system powers many competing devices, and Microsoft (MSFT) were modestly higher after hours. (Microsoft is the publisher of MSN Money.)

Yahoo's results are flat
Investors seemed indifferent to fourth-quarter results from Yahoo (YHOO) after the close. Shares were off 10 cents to $15.59.

Yahoo's net income fell to $296 million from a year ago's $312 million. Earnings per share were unchanged at 24 cents.

Revenue net of payments to partners (known as traffic acquisition costs) was $1.17 billion. That's down from $1.21 billion a year ago. Wall Street had expected 24 cents a share in earnings and revenue of $1.19 billion.

The company said it expects revenue net of traffic acquisition costs of $1.03 billion to $1.11 billion in the first quarter. Shares gained a penny in regular trading to $15.69, and gained another penny after hours.

Europe re-emerges as a problem
European finance ministers pushed bondholders to provide greater debt relief for Greece. That boosted fears the nation may miss a March 20 bond payment. The latest iteration of the Greek debt crisis weighed on stocks in Europe, especially bank stocks. Many U.S. bank stocks were also lower today.

Europe had been fairly quiet this month. Not so today with the Greek problem erupting again.

The European uncertainty also weighed on nonfinancial stocks. McDonald's (MCD) beat Street estimates for fourth-quarter results, but the company warned that currency fluctuations could trim 2012 profits by 16 to 18 cents a share. Shares fell $2.20 to $98.75, the second-worst performer among the 30 Dow stocks.

Adding to the day's stress, the International Monetary Fund trimmed its global growth estimates for the year to 3.3%, but warned the eurozone debt crisis could knock an additional two percentage points off worldwide output if eurozone leaders don't act soon.

The IMF said inaction could push the teetering eurozone headlong into a severe recession where growth contracts by 4% over the next two years.


This evening, President Barack Obama will lay out what he calls a "blueprint" for revitalizing the economy in his third State of the Union address before a joint session of Congress. 

Separately, the Federal Reserve began a two-day policy meeting. Its decisions will be announced at 12:30 p.m. ET Wednesday. Chairman Ben Bernanke will hold a new conference at 2:15 p.m. ET. 


The announcement will also include the Fed's first explicit projections of interest rates, inflation and possibly a target for the unemployment rate.


Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$98.95

$99.58

0.12%

0.12%
(per barrel)











Heating oil (-HO)

$3.0151

$3.0035

3.46%

3.46%
(per gallon)











Natural gas (-NG)

$2.5540

$2.5250

-14.55%

-14.55%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8105

$2.7856

5.76%

5.76%
(per gallon)











Brent crude 

$110.03

$110.58

2.47%

2.47%
(per barrel)











Retail gasoline

$3.3810

$3.3830

3.43%

3.43%
(per gallon; AAA)












Oil, gold and silver drop; dollar moves higher

The dollar was higher today as the uncertainty in Europe took center stage yet again.


That pushed oil prices, gold and silver lower.


Crude oil (-CL) in New York settled down 63 cents to $98.95 a barrel. Brent crude was off 38 cents to $110.20 a barrel.


Gold (-GC), meanwhile, settled down off $13.80 to $1,664.50 an ounce. Silver (-SI) dropped 19 cents to $32.08 an ounce. Copper (-HG), however, was up slightly to $3.80 a pound.


Despite the dollar's gains, the 10-year Treasury yield was at 2.064%, down from 2.067% on Monday. 


A big game of chicken on Greece

Late Monday, eurozone finance ministers rebuffed a deal presented by private owners of Greek debt as a "maximum" offer for the losses they are willing to sustain. The rebuff opened a fresh round of brinkmanship in tortuous negotiations to ease the country’s debt load.


A deal between the Greek government and the banks that hold Greek national bonds is considered to be the key to the stability of the European financial system. Investors fear that if Greece can't pay its debt, it could trigger a panic.

Greece is trying to get its private creditors to swap their Greek government bonds for new ones with half their face value. But the interest rate has been a stumbling block. Greece faces that important bond repayment deadline in March. 


At the same time, the Greek government is under tremendous pressure to find a way to get its economy growing again.


Leaders and laggards

Polycom (PLCM) surged $2.43 to $20.85.  The largest independent maker of videoconference systems reported fourth-quarter earnings excluding some items of 41 cents a share, exceeding the 29-cent average estimate by analysts.

Western Digital (WDC) gained $2.17 to $36.88, fifth-best among S&P 500 stocks. The maker of disk drives and networking products reported second-quarter revenue of $2 billion, surpassing the average analyst estimate of $1.84 billion.

Collective Brands (PSS) rose 95 cents to $15.89. The maker of Saucony and Sperry Top-Sider shoes -- which said in August it was reviewing options to boost shareholder value -- may attract interest from buyout firms and rivals such as Wolverine World Wide when bids are due next week, Bloomberg News said. The company could be worth as much as $27 a share based on the value of its separate businesses, Morningstar said.

EMC (EMC) gained $1.70 to $25.14. The world's biggest maker of storage computers reported a 32% gain in fourth-quarter earnings, helped by demand for its products and software from majority-owned VMware (VMW).

VMware, the biggest maker of software that lets computers run multiple operating systems, jumped $6.66 to $92.66. The company reported sales and profit that topped estimates as corporations bought more programs to make servers more efficient.

Travelers Companies (TRV) slipped $2.29 to $58. It was the worst performer among the 30 Dow stocks. The only insurer among Dow stocks said fourth-quarter profit fell 31% on lower investment income and a smaller benefit from reserves. 


Verizon Communications (VZ) shares were lower after its results missed estimates. Its decline of 61 cents to $37.79 was the third-biggest percentage loss in the Dow. The second-largest U.S. phone company reported a fourth-quarter loss after booking a pension charge and having higher subsidy costs for rising iPhone sales.

Peabody Energy (BTU) dropped 65 cents to $36.86. The biggest U.S. coal producer posted fourth-quarter profit that missed analysts' estimates and said output will be curbed at the Twentymile mine in Colorado.

Zions Bancorporation (ZION) had the biggest loss in the S&P 500, falling $1.40 to $17.15. The Salt Lake City-based bank was cut to "hold" from "buy" at Stifel Nicolaus & Co. after reporting fourth-quarter earnings that missed the average analyst estimate. 


Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0400%  0.040%

300.00%  300.00%
5-year Treasury note 

0.901%  0.911%

8.55%  8.55%
10-year Treasury note

2.064%  2.067%

10.32%  10.32%
30-year Treasury bond

3.157%  3.146%

9.28%  9.28%
Currencies











U.S. Dollar Index

80.026  79.934  -0.62%  -0.62%
British pound

1.5618  1.5571  0.52%  0.52%
(in U.S. $)

          
U.S. $ in pounds

£0.640  £0.642  -0.51%  -0.51%
Euro in dollars

$1.30  $1.30  0.56%  0.56%
(in U.S. $)

          
U.S. $ in euros

€ 0.768  € 0.768  -0.56%  -0.56%
U.S. $ in yen 

77.88  76.98  1.01%   1.01%
U.S. $ in Chinese

6.33  6.32  0.12%  0.12%
yuan

            
Canada dollar

$0.000  $1.008  -100.00%  -100.00%
(in U.S. $)

          
U.S. dollar 

$1.010  $1.008  -1.03%  -1.03%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,664.50

$1,678.30

6.24%

6.24%
(per troy ounce)











Copper (-HG)

$3.808

$3.799

10.81%

10.81%
(per pound)











Silver (-SI)

$31.9750

$32.2700

14.54%

14.54%
(per troy ounce)











Wheat (-ZW)

$6.3350

$6.1975

-2.95%

-2.95%
(per bushel)











Corn (-ZC)

$6.3025

$6.200

-2.51%

-2.51%
(per bushel)











Cotton 

$0.9854

0.9946

7.48%

7.48%
(per pound)











Coffee

$2.2350

2.2255

-2.68%

-2.68%
(per pound)











Crude oil (-CL)

$98.95

$99.58

0.12%

0.12%
(per barrel)










 


95Comments
Jan 24, 2012 4:30PM
avatar

The Federal Reserve is doing QE3 without telling anyone...

 

ABSO-FREEKIN- LUTELY!!!

 

Folks this is scary...this time QE3 is all hush hush...the ONLY reason for ANY sort of 'rally' taking place in the market...lets review:

 

2008 - 1.4 Trillion printed (did not help much if at all)

2010 - 600 Billion more printed (did not help much if at all)

2012 - 488 Billion more printed (is not helping much at all)

 

just continuing down a path of MORE DEBT, MORE DEBT, MORE DEBT!!!

 

the ONLY reason for Wall St pump up...banks getting more funny money!

 

WAKE UP PEOPLE!!

 

 

 

Jan 24, 2012 2:37PM
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Does anyone really believe that the Greek private bond holders will swap their current bonds for a 50% cut in face value with the promise that they will get a higher yield later...??? 

 

I am sure the bond is covered with Credit default Swaps but higher interest rates...Really...???​?

Jan 24, 2012 4:25PM
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It has nothing to do with Greece! The market is going to crash not because of what we are doing today. But because of what we have done for the last 70 years. Google for Are we in Kondratieff Winter to understand why. Don't end up holding stocks when the Greece debt issue is resolved yet the market continues to decline.

Jan 24, 2012 3:02PM
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Leave Greece alone!  What do you mean, Greece is under ---pressure.  No one has the right to "pressure " Greece about anything.  And no one has ever proven to us that the Greece bonds and stocks should or do effect the American stocks.   You know how far Greece is from America?  10,000 miles? The only things causing calamity on the NYSE is our failure to adopt a balanced federal budget, which is now in the red by more than 14 trillion dollars.  Greece has been around for 5,000 years.  America is new on the world scene, by any measurement.  Our Congress is sitting on their buttes with no idea what to do, when even an ordinary housewife knows what should be done to fix our economic problems:  Balance the budget.  Folks, only the "big Boys" ought to be fooling around with the NYSE.  The rest of us should put our money in the bank we deal with.
Jan 24, 2012 2:45PM
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No i don't , but it is just like do you think the speculators and the hedgefunds will ever stop gouging the American people?
Jan 24, 2012 5:36PM
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Isn't it amazing that Greece with a population of approx 5M people can hold the entire world hostage? Let them sink so the rest of us can go about our investments without the roller coaster ride each week. Worst case scenario for them is that many of the Greeks that retired at 52 will have to go get a job when their gravy train comes to a screeching halt!
Jan 24, 2012 4:55PM
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There is a lot of negative economic news and yet the market is only down about 40 points??  Seems like it is being "propped up" to me.  Europe is still a long, long way from any resolution to their debt crisis but then again so are we but apparently this has no ill effect on the market but time will tell....

Jan 24, 2012 5:38PM
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Headline:

 

"The World Sorta Ended Today, But It Was A Pretty Lame End"

 

Better luck tomorrow, D&G'rs.

avatar
The Federal Reserve is doing QE3 without telling anyone. They said they sold $488 billion of bad real estate loans to purchase US T-bills because no one else was buying them. 

The US Fed pumps in cash

If the world's central banks can't pull off a global rescue this time, it won't be because they haven't tried. They've thrown a lot of money -- and I mean a lot of money -- at the global economy.

For the week ended Jan. 18, 2012, the Fed's balance sheet stood at $2.96 trillion. That's up $488 billion from the week ended Jan. 19, 2011. The increase is substantially due to the Fed's purchase of $576 billion in Treasurys. (The Fed bought Treasurys while selling mortgage-backed securities, resulting in the $488 billion net increase.) That's $488 billion in cash created by the Fed and pumped into the $14.7 trillion U.S. economy in the last year.

In my book, $488 billion is a lot of money. But it is less than the Fed's $600 billion in purchases of Treasurys as a result of the second program of quantitative easing, announced in November 2010, or the $1.4 trillion in purchases of mortgage-backed securities and Treasurys in the first quantitative easing, which began in 2008.

Jan 24, 2012 2:49PM
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btw, Gaddafi supporters seized control of the western town of Bani Walid today in a non reported story by any news outlet. I guess sometimes the news is just to darn inconvenient to print.
Jan 24, 2012 7:48PM
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The Wall Street Greed machine rolls on.They all like to paint such a pretty picture of our great economy, but the truth is they do not have a clue how bad things still are for the average American family on Main Street. Gas jumped another 8 cents a gallon in my area overnight and now I am paying $3.75 a gallon and $4.00 a gallon for heating oil and it is only January. After I pay all my bills, I have absolutely nothing left over to put back into the economy and I am sure that I am not alone. How is our economy ever going to come back this way, it is not. Greed is a terrible thing, but it has a way of catching up with people and it will catch up with Greedy Traders on Wall Street also. The sad thing is Greed is like a war and the innocent also become casualties.This economy will once again crash along with Wall Street and they will be to blame.
Jan 24, 2012 8:36PM
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longbeach leave your head where it's at ,if you pull it out the fresh air would probably kill you!!Wink
Jan 24, 2012 2:45PM
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They took a similar haircut on the last bond series and would be stupid, which they are not, to buy new ones at inflated valuation in anticipation of yet another haircut.  So they will balk unless they get a reasonable interest rate that takes inevitable devaluation into account.  Greece is kind of like you or I getting new credit cards at worse rates to get credit to make payments on old cards that are maxed out.  It's all a big shell game at an internationl level to keep moving mountains of debt down the road so some other gen eration  needs to deal with it. This is just as true here as in Europe.  When the market bounces off the lows it can't be in anticipation it is oversold (not based on economics at least) so someone, probubly the Fed, is buying index futures from the sidelines to pump up the indexes and bounce back off the lows. Just a different shell game going on in another smoky room somewhere.
Jan 24, 2012 8:25PM
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Disappointed oh really????

 

"Wall Street is hoping the results kick-start a market that's seemed lethargic this week after three straight weeks of gains.  "

 

how many of these purchases were made on credit cards?

 

if not on credit, how much will other parts of the US economy suffer (restaurants/retaile​rs/etc.) from these buyers who must forego purchases of American goods and services to buy a product that is made almost exclusively overseas??

 

net-net, this is no game breaker for lethargy ..... gnite .... Sleepy  Sleeping half-moon 

Jan 24, 2012 8:22PM
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The ONLY reason sales were a smash for Apple is because everything they sale is an outrageous price. I would be a multimillionaire if I could sell something for outrageous prices too.
Jan 24, 2012 10:29PM
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if you didnt buy it, they wouldn't be 'rich'. however, i am suprised that stock in Ramen Noodles and Vienna Sausages have not gone through the roof :P
Jan 24, 2012 3:13PM
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There is some "New" money floating around the planet now; actually the oldest money of all time - Gold. If India (and possibly China) is/are using Gold as currency instead of USD to trade Oil, could this not start an 'East vs. West' monetary conflict of interests greater than the one we already have?

It would appear that considering the amount of physical Gold required to keep up with the payments, a shortfall would occur should Iran call in the 'notes' if this goes long-term. Considering the US's stake in India with off-shore labor and manufacturing, Iran may be getting their fingers into the US's pockets (and corporations) indirectly but very effectively - sly dogs.  
Jan 24, 2012 5:59PM
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tap01, people like Blaine talk about Greece everytime the Dow takes a downturn, because some don't want the people in this country to know that everything in our own domsestic economy isn't quite so peachy.  It would effect people's confidence in this so-called recovery, and not serve their interests by pointing out what isn't quite so great at home.

 

What's ironic however, is just looking at the size of Greek sovergn debt, and comparing it to US debt, from sovergn, to consumer, and otherwise; we're not exactly the people to be preaching fiscal responsibility.  The US debt outlook, hasn't exactly been that stellar.  I guess it's a see no evil, hear no evil, and keep everyone looking elsewhere (aka Greece).

Jan 24, 2012 8:29PM
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Obviously Longbeach you haven't read Alinsky's book or his numerous other articles about how to con the poor and misinformed in order to get them to do what is wanted. Those are his words, not mine, so you figure it out for yourself or better yet read his book, maybe then your can spout off at the mouth with at least something credible behind your words so somebody might believe what you say, instead of laugh at it.
Jan 24, 2012 3:58PM
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We've had a decent few weeks, not a surprise what is happening down here today. Manipulators finally able to bring us down (so far) Scumbags going nuts trying to drop this market...Oh well, we will see what happens this last hour. Another campaign speech by the Village idiot tonight, nobody down here looking forward to more campaign speeches...Oh well...Sad.
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