Apple's Stunner Overshadows the Big Dow Earnings Day

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Today was one of only two days this earnings season when five Dow Jones Industrial Average (INDEX: ^DJI) companies reported. But it was Apple that stole the show after hours with a gangbusters earnings report.

First, let's get to the Dow companies that all reported before market open:

Company

Reported Earnings (Adjusted)

Analyst Estimates

Today's Price Change
DuPont (NYS: DD) $0.35$0.330.1%
Johnson & Johnson (NYS: JNJ) $1.13$1.090%
Verizon (NYS: VZ) $0.52$0.53(1.6%)
McDonald's$1.33$1.30(2.2%)
Travelers (NYS: TRV) $1.48$1.54(3.8%)

Despite beating estimates, DuPont and Johnson & Johnson were pretty much flat. DuPont saw some volume weakness in its non-food-based divisions. Meanwhile, when you count one-time items, J&J posted an $0.08 loss (versus a positive $1.13 adjusted figure). The big so-called one-time items were $0.44 in product liability-related expenses and $0.37 in litigation-related expenses as J&J has been dealing with quality-control issues and allegations of questionable practices.

McDonald's also beat estimates, yet it was the Dow's second-biggest loser for the day. Its quarter was strong, with same-store sales up a ridiculous 7.5%, including 7.3% in the minefield that is Europe. But its shares (and expectations) have been riding so high that even that wasn't enough for the market.   

The Dow's other biggest losers were fellow reporters Travelers and Verizon. Travelers missed earnings, with its net income down 31% because of underwriting weakness and declining investment income. Meanwhile, Verizon's GAAP earnings came in negative because of pension charges (adjusted earnings were $0.52, but GAAP earnings were -$0.71). Operationally, Verizon grew its wireless business (co-owned with Vodafone) by 1.2 million net new subscribers, but at the cost of heavy subsidies to Apple for carrying its iPhone.

Which brings us to the news dominating the evening reports. Apple blew away expectations, posting record sales of $46.3 billion and record net profit of $13.1 billion (or $13.87 per share). Analysts were expecting just $10.08 per share. Its gross margin jumped more than 600 basis points to a mind-blowing 44.7% (remember, Apple's a hardware company, not a software company). To read all the details, check out its succinct earnings release).

And if you're excited about the prospects of the mobile space that Apple is dominating (selling 37 million iPhones last quarter alone!), read our brand-new free report: "The Next Trillion-Dollar Revolution."

At the time this article was published Anand Chokkaveluowns shares of Vodafone, Johnson & Johnson, Apple, and McDonald's. The Motley Fool owns shares of Johnson & Johnson and Apple.Motley Fool newsletter serviceshave recommended buying shares of Johnson & Johnson, Vodafone Group, Apple, and McDonald's, creating a bull call spread position in Apple, and creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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