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Tuesday’s stocks to watch as Apple sets the tone

It's another big day for US corporate earnings with Yahoo, McDonalds and Verizon among many preparing to open their books. But it was Apple that set the tone on Monday. Its shares rallied strongly in afer-hours trading after its fourth-quarter earnings beat analysts’ estimates. The company revealed USD 42.1 billion in revenue and USD 8.5 billion in net income. Brian Colello, Senior Equity Analyst at Morningstar Research provides a detailed overview of the company’s earnings data as well his long-term outlook for the company’s stock.

Colello notes that Apple had a “really great quarter on the product front,” with 39.3 million iPhones sold in the last quarter. Revenue from iPhone sales increased 21 percent, Mac sales were up 18 percent, and App Store sales increased 36% compared with the same quarter last year. Sales of the iPad were down 2.05 million from the same period a year ago, but Tim Cook, Apple’s CEO, addressed this concern in a conference stating that 237 million iPads have been sold in almost 4 years.

The potential growth within emerging markets has Colello believing that there is still long-term value to be gained from the company’s stock. Sales for products like the iPhone 6 and new iPads are expected to grow during Q1, as the holiday shopping season approaches. Apple’s customer’s propensity to own multiple Apple devices has wide-moat for the brand, decreasing the likelihood that consumers will shift to competitors.

02:15 minutes
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