Apple Gets Nailed on Earnings, but Caterpillar Jumps

The blue chips slipped again, and Apple stumbled after hours, though Caterpillar added a ballast to the Dow today.

Jan 27, 2014 at 10:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks finished down for the third day in a row today, though today's drop was minor compared with Friday's bloodbath on emerging-market worries. The Dow Jones Industrial Average (DJINDICES:^DJI) was the best-performing out of the three major indexes, finishing down 41 points, or 0.3%, while the S&P 500 fell 0.5%, and the Nasdaq closed down just over 1%. In the day's only official economic report, December new-home sales missed expectations, coming at just 414,000 against estimates of 457,000. It was the second straight decline for the category, though some blamed that on unusually cold weather, Lean inventory and rising home prices also seem to indicate that the housing market is still strong.

After hours, Apple (NASDAQ:AAPL) shares tumbled, falling 8% as the iPhone maker disappointed the market in its quarterly report. Though the company saw record sales of iPhones and iPads, it wasn't enough to please the Street as iPhone sales were short of expectations, and its forecast for the current quarter was badly off the mark. Apple says it expects sales of just $43 billion, well below the analyst consensus at $46 billion. Profits were essentially flat, though per-share earnings improved about 5% to $14.50, ahead of estimates at $14.09 a share. Revenue, meanwhile, increased just 6% to $57.6 billion, edging out estimates at $57.5 billion. CEO Tim Cook alluded to plans the company has for new products, but he didn't go into specifics. With its once-unstoppable sales growth now nearly flat, the report makes clear that Apple desperately needs a breakout product to justify sending the stock back up to the $700 level it once occupied.

Elsewhere, Caterpillar (NYSE:CAT) shares were climbing higher, finishing up 6% after a better-than-expected earnings report, a rare feat considering the heavy-equipment maker's recent troubles. Earnings for the fourth quarter came in at $1.54, solidly beating estimates of $1.28, while sales fell 10.4% to $14.4 billion, topping the analyst consensus at $13.6 billion. The report signals that the manufacturer is still facing problems with a slowdown in mining and lower demand, but the problems aren't as bad as feared and a turnaround could be closer than thought. Cost-cutting also helped boost profits, and investors were happy with the board's approval of a new $10 billion share-repurchase plan. Still, Caterpillar's not out of the woods yet, as the company sees mining equipment sales falling to 10% in 2014, though construction-equipment sales should improve 5%.

It's all about the dividends, baby
One of the dirty secrets that few finance professionals will openly admit is that dividend stocks as a group handily outperform their non-dividend-paying brethren. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Fool contributor Jeremy Bowman owns shares of Apple and Caterpillar. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information