U.S. stocks saw another volatile day, but hung onto gains after IBM's dismal earnings report. Apple crushed on earnings and revenue estimates and sold over 39 million iPhones in the fourth quarter. Jeanne Yurman reports.
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Apple's fiscal fourth quarter results handily beat Wall Street estimates Monday.
The company sold well over 39 million iPhones in the most recent quarter, boosted by its new iPhone 6 and 6 Plus, which shattered records at their launch. Also Apple sold 5.5 million Macs, climbing 21 percent from a year ago.
And the percentage of sales from overseas ticked up to 60 percent of the total with China growing one percent.
These factors helped it to crush analyst targets with revenue of more than $42 billion.
Apple is forecasting as much as $65.5 billion in sales for the current quarter.
Apple shares were moving higher, in after-market trading, ahead of its call with analysts.
The initial numbers may help to calm hand wringers concerned about a drop off in iPad and iPod sales and competition from Android phones.
Earlier in the day Apple launched a new mobile payment system, Apple Pay. It aims to replace cash and traditional credit cards with users making point-of-sale purchases in one swipe. Morningstar's Brian Colello says Apple Pay will be a smart way to keep iPhone users on board.
SOUNDBITE: BRIAN COLELLO, EQUITY ANALYST, MORNINGSTAR (English) SAYING:
"We think its a great product. We think it will gain adoption. We don't see it as a revenue driver even if you look five years out it maybe will add a couple of incremental points to revenue. But it has not moved the needle much on the revenue side. The more important factor is it improves the user experience it creates customer loyalty."
Also headlining earnings news...Chipotle Mexican Grill. Shares of the high flying fast casual chain dipped slightly in after-hours trading even though earnings and revenues sizzled past Wall Street targets. Expectations are high for a company whose stock has soared to nearly $650 a share - a Wall Street darling as it repeatedly turns in double digit earnings growth amid rising food costs and fierce competition.
IBM was a major headwind in early trading for the Dow. Big Blue scrapped its earnings target for next year after its quarterly profit got nearly wiped out. It blamed a slowdown in client spending. Separately, IBM said it's paying Globalfoundries $1.5 billion to take its money-losing chip unit off its hands.
Despite a steep drop in IBM's shares the Dow eked out late day gains. The S&P 500 and the Nasdaq also closed higher.
NCR got hammered. The maker of point-of-sale terminals warned its full year earnings would miss its target. NCR pointed the finger at the weak retail environment and data security concerns.
Here's a tale of two toy makers: Boys' toys turbocharged revenue at Hasbro, and its profit jumped. Compare that to last week's report from rival Mattel, whose profit fell partly owing to Barbie's falling out of favor with girls.
Overseas, IBM had company. Tech shares led the European markets lower after software maker SAP cut its profit outlook for the full year.
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