Stocks opened higher Wednesday but fell during the session, apparently due once again to trade concerns. The Dow Jones Industrial Average (^DJI 0.67%) and the S&P 500 (^GSPC 0.87%) had modest losses.
Today's stock market
| Index | Percentage Change | Point Change |
|---|---|---|
| Dow | (0.32%) | (81.37) |
| S&P 500 | (0.10%) | (2.93) |
Data source: Yahoo! Finance.
Technology shares led the market, with the Vanguard Information Technology ETF (VGT 1.37%) advancing 1.2%. Crude oil prices moved lower, dragging down the energy sector; the Energy Select Sector SPDR ETF (XLE 0.65%) fell 1.4%.
As for individual stocks, Apple (AAPL 0.51%) closed at a record high after wowing investors with results from its latest quarter, and Pandora Media (P) soared on higher paid subscriptions.
Image source: Getty Images.
Apple jumps on strong iPhone sales and services growth
Shares of Apple hit all-time highs, breaking through the $200 level and closing up 5.9%, after the tech titan announced fiscal third-quarter results powered by sales of high-priced iPhones and the growth of its services business. Sales grew 17% to $53.3 billion and earnings per share soared 40% to $2.67. Analysts were expecting EPS of $2.18 on sales of $52.3 billion.
Unit sales of iPhones rose 0.7% in the quarter, but iPhone revenue was up 20% to $29.9 billion, thanks to an average selling price of $724 compared with $606 in the period a year earlier. iPad and Mac sales each fell 5%, but services revenue boomed 31% to $9.55 billion and now amounts to 18% of total revenue. The company's Other Products segment, which includes the Apple Watch, grew sales by 37% to $3.74 billion.
"We're thrilled to report Apple's best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth," said CEO Tim Cook. "Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline."
Looking forward, Apple guided to Q4 revenue between $60 billion and $62 billion, which is above the analyst consensus. Given the strength of Apple's business heading into rumored iPhone model launches in the fall and the holiday season, it's no wonder the market capitalization of the company flirted with the $1 trillion level today.
Pandora grows paid subscribers
Shares of Pandora soared 14.7% after the music-streaming specialist reported revenue that beat expectations due to an increase of paid subscribers. Revenue of $384.8 million exceeded the analyst consensus forecast of $373 million, and was up 12% excluding discontinued operations. Non-GAAP net loss per share was $0.15, which was $0.01 less than expected.
Advertising revenue declined 2.6% to $271 million, but subscription revenue increased 65% to $114 million. Pandora added 351,000 new paid subscribers in the quarter for a total of 6 million, a 23% increase from the period a year earlier. The number of active listeners fell by 1.2% from the previous quarter to 71.4 million and the total listening hours increased 2.6% sequentially to 5.09 billion. Gross margin was 33%, down from 37% in the period last year.
Investors were most impressed with Pandora's ability to grow its paid membership base, but it's also investing heavily in the ad-supported side of its business. This quarter the company closed on its AdsWizz acquisition and launched its audio programmatic platform. Revenue per ad impression improved to $68.75 from $66.15 a year ago and $55.52 last quarter.
Pandora faces stiff competition from the likes of Apple and newly public Spotify, but results announced today indicate that it's making progress on its turnaround.
