A busy after-market Tuesday saw both Apple (AAPL - Analyst Report) and Yahoo (YHOO - Analyst Report) report earnings for Q4. While Apple provided a huge beat on both the top and bottom lines, Yahoo followed its modest earnings beat with news of a tax-free spinoff of its Alibaba (BABA - Analyst Report) shares.

Apple soared past expectations with earnings per share of $3.06; the Zacks consensus estimate was $2.60. Revenues of $74.6 billion easily topped the $69.2 billion expected.

The big driver, as it has been since the release of 6 and 6+, was the iPhone: shipments of 74.5 million in the quarter far surpassed expectations of 66.8 million. Mac shipments were exactly in-line with estimates at 5.5 million, while iPads narrowly missed expectations of 21.8 million units shipped by about 400K. Gross margins also beat estimates at 39.9 percent, topping the 38.4 percent consensus.

China was a big growth driver for Apple: business in the world's second-biggest economy was up over 100 percent in the quarter. Guidance for the March quarter, however, was on the light side of expectations at between $52-55 billion. The Zacks consensus was $55.4 billion. Still, this was a big quarterly beat for Apple, and AAPL shares are up 5 percent in after-hours trading.

Yahoo CEO Marissa Mayer seems to have made a decision on what to do with YHOO's $40 billion in holdings of China tech giant Alibaba: spin it off into a newly formed independent investment company. The tax-free spin-off would be its own publicly traded entity, but would make Yahoo itself a much smaller company than it has been in years, largely due to the removal of BABA shares from its revenues.

When Alibaba went public, Yahoo was forced to sell 20 percent of its holdings in the company. The company spent $3 billion in taxes on the move; this latest move frees up a major windfall of capital without being punished by forking over another significant amount in taxes. As a result, we are seeing Yahoo shares trading up nearly 8 percent in after-market trading, with more than 10 million shares moving after the bell.

This also leaves Mayer off the hook with turning around the long-troubled Internet company. Instead of building out Yahoo to help it better compete with the Googles (GOOGL - Analyst Report) of the world, the spin-off of BABA stock allows everyone to move past expectations for significant Yahoo growth.

And — oh yeah — Yahoo also reported earnings for its Q4 and fiscal 2014 after the bell Tuesday. Earnings of 20 cents per share (accounting for stock-based compensation) beat the Zacks Consensus Estimate by a penny, on revenues of $1.2 billion for the quarter — a tad higher than the $1192 million expected. This marks the fifth straight quarter Yahoo has outperformed expectations on the bottom line.

Obviously, however, the BABA stock spin-off is dominating the headlines as well as the heavy stock buying following the regular trading day. Prior to Yahoo's after-market news, shares had been up roughly 26 percent year over year.