Caterpillar Crushes Expecations While Apple Gets Crushed After Hours

Good morning, good lookin'. Here are the three things you need to know on Jan. 28.

Jan 28, 2014 at 6:00AM

Monday wasn't just bad because we had to watch Justin Bieber's god-awful basketball skills. Despite Caterpillar's awesome earnings report, Wall Street suffered, too, as the Dow Jones Industrial Average (DJINDICES:^DJI) dropped 41 points ahead of the big Federal Reserve meeting (even though all you care about are Apple's (NASDAQ:AAPL) earnings). 

1. Apple profits flat vs. last year
What do 51 million iPhones give you? A lackluster quarter of sales. (Only in Cupertino.) The biggest company in the world, Apple, announced fourth-quarter earnings that made investors want to verbally abuse Siri: Revenues climbed 6% to $57 billion, and profits were flat at $13 billion. The shares went tumbling more than 7%.

The smartphone business is tough, with heavyweights Microsoft, Google, Samsung, and Apple all battling it out. Total iPhone sales climbed 7% from last year's fourth quarter, but 51 million is well short of analysts' 57 million expectations. iPhones are the most important thing for Apple. iPod sales were down 52%, as the primitive device continues its decent into obsolescence.

The takeaway is that Apple is a growth company no more. Profits in the fourth quarter (important because of the holiday season) were flat -- flat -- from last year. Investors worry if Apple is out of innovation, while CEO Tim Cook is so busy trying to get Apple's extra cash into the hands of demanding shareholders. Check out the best analysis of Apple's growth problem that Twitter has to offer

2. Caterpillar crushes Wall Street expectations
Caterpillar's (NYSE:CAT) fourth-quarter earnings report was shockingly optimistic. The builder of construction and mining vehicles reported $1 billion profits in the fourth quarter on $13.6 billion of revenues. 

Revenues dropped from last year, but effective cost-cutting managed to somehow boost profits substantially and smash Wall Street's estimates of $830 million in profits. CEO Doug Oberhelman sleeps with an ax in bed, in case an expendable worker tries to break in -- he pledged to keep costs down in 2014.

Positive vibes for emerging markets were coming from the report. The CEO said 2014 economic growth will be strong, countering recent market concerns that growth in China and elsewhere is slipping. In all, Caterpillar demolished the negative mojo the stock's seen the past year, and CAT stock rebounded by a big 6% Monday.
 
3. Cold weather freezes U.S. home sales
When the mercury drops, apparently so does business for real estate brokers. Sales of new homes surprisingly fell 7% in the last month of 2013, as the coldest December in four years kept people at home instead of looking for new places to live.
 
The takeaway is that investors aren't freaking out, because this one bad month won't ruin an awesome year. New home sales jumped more than 16% in 2013 to lead the housing market's best performance since 2008, as low interest rates created by the Federal Reserve's quantitative easing stimulus policy encourage folks to borrow money to buy new digs. Cold, schmold.
  
Tuesday:
  • The two-day Federal Reserve policy meeting begins
  • Fourth-quarter earnings: AT&T, Yahoo!, Ford
MarketSnacks Fact of the Day: Super Bowl ticket prices fell 40% this past week, to reach the lowest price for the championship game in more than a decade.

They said it couldn't be done
David Gardner proves the critics wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Fool contributors Nick Martell and Jack Kramer have no position in any stocks mentioned. The Motley Fool recommends Apple, Ford, Google, and Yahoo! and owns shares of Apple, Ford, Google, and Microsoft. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers