The stock market closed Thursday with minimal changes, with the Dow actually finishing exactly flat on the session, suggesting a quiet day on Wall Street. Yet, nothing could be further from the truth, as dozens of companies reported their earnings results and sent stocks higher or lower by large margins. Among the winners on the day were Apple (AAPL +0.39%), D.R. Horton (DHI +1.58%), and VASCO Data Security International (VDSI +1.43%), all of which scored major gains thanks to positive news on the earnings front.
Apple jumped more than 8% as the tech giant released impressive quarterly results, as well as announcing a number of stock and capital-related initiatives. iPad sales were lower than investors had wanted to see, but iPhone sales topped estimates by about 5.25 million, with Apple selling 43.7 million iPhones during the quarter, helping to expand gross margins. Apple also said it would add $30 billion to its stock buyback, raise its dividend by 8%, and do a seven-for-one stock split. By having boosted the amount of capital it returns to shareholders, Apple's cash balance actually fell from the previous quarter. The combination of solid results and shareholder-value-enhancing moves showed that Apple has been responsive to criticism from activist investors; yet, the one thing still missing is a concrete vision of what new products will lead Apple into the future.
D.R. Horton also climbed 8% as the homebuilder saw net new sales orders climb almost 9% from the year-ago quarter. CEO Don Horton said that conditions in the housing market are still good, reassuring investors who had grown concerned at some of the recent housing-related economic data that had suggested a possible slowdown. D.R. Horton also announced that it would give prospective homebuyers some new low-cost options, citing the underserved entry-level segment in its decision to unveil its Express Homes concept targeted at first-time homebuyers. Average sales prices rose 10%, to $278,900, and with low interest rates persisting despite the stock market's gentle rise, D.R. Horton and other homebuilders could continue to see strength going forward.
VASCO Data Security gained 13% as the provider of security software and services announced favorable earnings. Sales rose 9.7%, easily outpacing investors' expectations for roughly 3% revenue growth, and earnings per share came in more than double what analysts had projected on a 465 jump in net income from continuing operations. Interestingly, while retailers and other companies wrestle with security breaches like the Heartbleed virus, VASCO has an opportunity to capitalize on businesses investing more capital toward protecting their IT security. If VASCO can convert on that opportunity, then today's gains could be just the tip of the iceberg.
