Stocks closed higher on Wednesday after a late rally on news that President Trump has received concessions from the EU to avoid a potential trade war. All told, the Dow Jones Industrial Average (DJINDICES:^DJI) climbed 172 points, or approximately 0.7%, while the S&P 500 (SNPINDEX:^GSPC) gained nearly 1%.
Today's stock market
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Industrial stocks helped prop up the broader indexes today, with the Industrial Select Sector SPDR Fund (NYSEMKT:XLI) climbing 1.5%. On the other hand, financials attempted to drag the market lower, with the Financial Select Sector SPDR Fund (NYSEMKT:XLF) rising a modest 0.2% after spending much of the day in the red.
iRobot's stellar growth
Shares of iRobot soared 17% after the home robotics specialist reported impressive second-quarter results. iRobot's revenue jumped 23.6% year over year, to $226.3 million, while net income rose an even better 37%, to $0.37 per share. Analysts, on average, would have settled for earnings of just $0.18 per share on revenue of $219.7 million.
Even more encouraging, iRobot's strength came on solid growth from each core geography, including 15% growth in the U.S.; 51% in the Europe, Middle East, and Africa region; and a 31% increase in Japan. And while Roomba still accounted for the vast majority of iRobot's revenue after a strong showing during Amazon's annual Prime Day sale, sales of its popular Braava floor-mopping line also skyrocketed 50% year over year.
iRobot further confirmed it's on track for multiple new product launches later this year. After combining those launches with its relative outperformance year to date, iRobot raised its annual guidance to call for 2018 revenue of $1.06 billion to $1.08 billion (a modest $10 million increase from the lower end of its previous range), and earnings of $2.30 to $2.50 per share (up from $2.15 to $2.40 per share before).
AT&T underwhelms investors
AT&T stock sank 4.5% -- an unusual move for the $220 billion telecom giant -- in the wake of the company reporting mixed second-quarter results following its merger with Time Warner.
AT&T's quarterly revenue declined 2.1% year over year to $39 billion, but would have increased 0.2% had it not been for company's adoption of new accounting standards at the start of the year. Either way, revenue fell just short of estimates for $39.4 billion. Meanwhile, net income increased 15% to $0.91 per share, exceeding expectations for $0.85 per share.
AT&T chairman and CEO Randall Stephenson called it an "exciting quarter" given the completion of the Time Warner deal -- a combination he says "created a modern media company built around premium content, 170 million direct-to-customer relationships, advertising technology, and high-speed networks."
Finally, AT&T raised its full-year 2018 outlook to call for earnings at the "high end of the $3.50 range," which is above the $3.40 most investors were modeling. But with its top-line shortfall following its enormous merger, it's no surprise to see the stock dropping today.