Stocks drifted most of the day, but fell in the afternoon, despite the fact that the Federal Reserve released a policy statement that seemed to confirm expectations of gradual rate increases. The Dow Jones Industrial Average (^DJI 0.00%) and the S&P 500 (^GSPC -0.72%) closed with moderate losses.
Today's stock market
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Energy stocks were the bright spot today, with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP 1.43%) adding 0.9%. Consumer stocks were the weakest sector; the Consumer Staples Select Sector SPDR ETF (XLP -0.28%) fell 2%.
Apple revenue growth accelerates on strong iPhone X sales
Apple announced fiscal second-quarter results and a massive share buyback last night, leading investors to bid the shares up 4.4% today. Revenue jumped 15.6% to $61.1 billion, Apple's sixth consecutive quarter of accelerating revenue growth. Earnings per share rose 30.3% to $2.75. Analysts were expecting the company to earn $2.68 on sales of $61 billion. The company plans to spend $100 billion buying back shares, and is also increasing its dividend by 16%.
Analysts had been worried about sales of the iPhone X, but Apple said that the top-of-the-line model outsold every other model every week of the quarter. iPhone unit sales grew 3% from last year, but the success of the pricier offerings resulted in a 14% boost in iPhone revenue.
Also helping the top and bottom lines was a 31% increase in services revenue to $9.2 billion. iPad sales jumped 6% and Mac revenue was flat from the quarter last year, but sales of "Other Products," which includes the Apple Watch and AirPods, ballooned 38% to $4 billion. Sales in China grew a strong 21%, a big improvement over the 11% gain last quarter. Gross margin came in at 38.3%, in line with expectations.
The jaw-dropping size of the share buyback, which amounts to about 11% of the company's market capitalization, as well good news about the iPhone X had investors cheering today.
Snap confirms investor fears about its redesign
Shares of Snap plunged 21.9% after the company announced disappointing first-quarter results stemming from the company's redesign of its app. Revenue grew 54% to $230.7 million, compared with analysts' estimate of $244.5 million. Non-GAAP loss per share was $0.17, matching expectations.
The damage from the redesign showed up in user metrics. Daily active user growth slowed to 2% from the quarter before, as the company added only 4 million new users in Q1, less than half the 8.9 million users it added in Q4. Average revenue per user was $1.21, up 34% year over year, but down 21% sequentially.
"Our redesign created some headwinds in our revenue this quarter by disrupting user behavior and creating some apprehension among our advertising partners," said CEO Evan Spiegal in prepared remarks for the conference call.
While there are signs Snapchat continues to be popular with teens, and the company is rethinking the design changes, investors continue to wonder if the latest self-inflicted wounds are further indication that it will be a struggle for Snap to compete effectively with Facebook and Alphabet subsidiary Google for ad dollars.