The 3 Biggest Dow Earnings Shocks Today

A whopping five Dow (INDEX: ^DJI  ) components plus Apple (Nasdaq: AAPL  ) reported earnings today.

Company

Earnings Per Share (Adjusted)

Analyst Expectations

Surprise

McDonald's (NYSE: MCD  ) $1.33 $1.30 2%
Apple $13.87 $10.04 38%
Verizon (NYSE: VZ  ) $0.52 $0.53 (2%)
Travelers (NYSE: TRV  ) $1.48 $1.54 (4%)

Despite beating analysts' earnings estimates with same-store sales growing an incredible 7.5%, McDonald's was the second worst-performing stock in the Dow today. Shares had been nearing a 52-week high, at one point trading for 20 times earnings in January. Investors were expecting a lot out of McDonald's, and even beating analysts apparently wasn't enough to sate their hunger.

Last year it was catastrophe losses plaguing Travelers; this quarter it was underwriting and investment weakness. While analysts had expected earnings to plunge, the 31% decline in net income was worse than expected. And there's more potential bad news for those investments: the IMF is lowering its global growth forecast today, and the likelihood of a Greek default appears to be increasing.

Verizon posted negative earnings due to pension charges. But adjusting for the charge, and in spite of a healthy 1.2 million iPhone subscriber net growth, Verizon came in just below estimates. Paradoxically, as has been the case with smartphone providers in the past, the earnings culprit may have been their operational success; heavy iPhone subsidy costs bit into Verizon's bottom line.

But the biggest earnings shocker of the day was Apple. Sales of iPhones, which now make up the majority of Apple's revenue, continue to skyrocket. Apple sold 37 million iPhones in the fourth quarter, during which it also introduced the iPhone 4S. That helped push revenue up 73% to a record $46.3 billion. Between the spike in sales and a huge boost in margins, Apple was able to once again blow away analysts' earnings estimates.

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Ilan Moscovitz owns shares of Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of McDonald's and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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