Corporate earnings and the broader stock indices had something in common Tuesday — they were both a mixed bag. But the real event was Apple (AAPL) earnings following the bell, which spawned a pretty good response in early after-hours trading.
AAPL shares traded down by more than 1% ahead of the Apple earnings release, but was headed in the other direction after beating Street estimates for its third quarter. Q3 earnings per share of $7.47 beat expectations for $7.32, and revenues improved to $35.3 billion, which edged out the consensus for $35.02 billion. Apple shipped 31.2 million iPhones in the quarter, ahead of the predicted 26 million, and moved 14.6 million iPad units.
The last piece of good news in the Apple earnings report was a forecast for fourth-quarter revenues between $34 billion and $37 billion, which was right on the analyst mark. Apple was up nearly 5% in after-hours trading.
Just a few minutes prior, the Dow Jones Industrial Average managed to show the only gains, rising 0.14% to a new record close at 15567.74. The S&P 500 broke a four-day winning streak, falling 0.19% to 1692.39, and the Nasdaq fell 0.59% to end at 3579.27.
Good earnings news powered the beaten down coal sector, as Peabody Energy (BTU) posted a surprising quarterly profit of 33 cents per share despite a revenue decline. BTU shares rose more than 5% and helped spur the rest of the sector, including Arch Coal (ACI, +4.5%), Cliffs Natural Resources (CLF, +4.1%) and Alpha Natural Resources (ANR, +3.9%).
Solid earnings reports from conglomerate United Technologies (UTX) and defense contractor Lockheed Martin (LMT) sent both stocks ahead, with UTX up more than 3% to lead the Dow and LMT ahead by 2%.
Meanwhile, Monday’s disappointing after-hours report from Netflix (NFLX) was met with a 4% loss. Yahoo (YHOO) found itself in a similar position as Monday’s news of a share buyback from hedge-fund investor Three Point Capital continued to weigh on the shares, down 2%.
In corporate news, Cisco (CSCO) will purchase network security firm Sourcefire (FIRE) for $2.3 billion in cash, or $76 per share — a 29% premium over FIRE’s Monday close. CSCO shares dropped just under 1%
In the regional bank sector, Los Angeles-based commercial finance lender Capital Source (CSE) agreed to merge with PacWest Bancorp (PACW) in a transaction valued at just over $2 billion. Capital Source shares rose more than 21% while PACW shares gained over 7%.
Finally, RadioShack (RSH) tumbled more than 5% after posting larger than anticipated losses despite higher revenue for the second quarter, and amid confirmation it hired bank advisory firm Peter J. Solomon to help formulate a strategy to improve its balance sheet.
A busy earnings week continues Wednesday, with notables Facebook (FB), Visa (V), Caterpillar (CAT) and PepsiCo (PEP) on the docket.
- Mgic Investment (MTG): Up 10.2% (68 cents) to $7.35.
- Wendy’s (WEN): Up 8.2% (55 cents) to $7.23.
- Molycorp (MCP): Up 6% (45 cents) to $7.91.
- Penn National Gaming (PENN): Down 7.4% ($4.00) to $49.98.
- Advanced Micro Devices (AMD): Down 6.2% (24 cents) to $3.66.
- Lorillard (LO): Down 4.5% ($2.07) to $44.08.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long AAPL and YHOO.