Apple, Facebook, Caterpillar Earnings

Not much else to discuss this morning other than the slew of earnings reports hitting left and right. Also, it’s bring your child to work day for me and apparently my kid can’t go anywhere without bags of toys, spare clothes, snacks etc. So that’s going on right now…

But here are some takeaways from the reports:

Apple gave weak guidance but they did the thing that everyone wanted them to do: More financial engineering. The buyback goes from $60 billion to $90 billion, the stock will also be splitting 7-for-1 (presumably to calm it down and for eventual inclusion into the price-weighted DJIA). The shares are surging by 9% in the pre-market, essentially the company is adding $45 billion in market cap on news that it’s giving away $90 billion. Alrighty then. No word on whether the crucial iPhone 6 will launch before year-end but they really need it to. Phones are the main business (57% of sales) now that iPad growth has hit a wall.

Philip Elmer-DeWitt collected this Q’s numbers that matter at Fortune:

• Revenues: $45.642 billion, up 4.7% year over year
• Profits: $10.223 billion
• Earnings per share: $11.62, well above consensus
• Gross margin: 39.3% (well above guidance)
• iPhones: 43.719 million units, up 17%, better than expected
• iPads: 16.35 million, -16% (lower than expected)
• Macs: 4.136 million, up 5%
• iPods: 2.761 million, down 51% (as expected)
• iTunes, Software and Services: $4.573 billion, up 11%
• Accessories: $1.419 billion, up 3%
• Revenue guidance for Q3: $36 to $38 billion
• GM guidance: 37%-38%

I don’t have much to say about Facebook except that they have something very special going on right now – business momentum. Not stock momentum (although they have that too) – but a momentum in the lines of business that they’re in. Some of it is skill, some of it luck, and some of it is being in right company at the right time. But it is obvious. Growth is explosive and they look invincible. Google’s got to be getting nervous as far as advertiser mindshare at this point. And remember all the handwringing about “Can Facebook Monetize Mobile?” You tell me:

Facebook said that mobile ads represented 59 percent of its ad revenue in the first quarter, up from 30 percent in the year-ago period. Facebook’s overall revenue grew 72 percent year-on-year to $2.5 billion in the first quarter, above the $2.36 billion expected by analysts. (Reuters)

Finally, let’s talk Caterpillar. It has, perhaps, the highest exposure to global growth (or lack thereof) of all the major reporting stocks this week. It’s in construction, industrial, mining and a host of industries – some of which are thriving and some are terrible. Despite pockets of weakness, CAT killed it this quarter. They beat slightly on revenue and smashed expectations on earnings – by .37 cents per share. The top line beat was important however, even if more subdued than the earnings beat. The company also raised guidance substantially. The higher guidance was mostly from the construction segment.

The CEO said something on the call that I thought has applications for all of us – in business and in investing:

“We understand we don’t control the economy and have instead focused on what we can improve.”

I love that. Have a great day!