Stock Futures Climb, Apple Leads Nasdaq Higher

New York (July 27)  Stock futures moved higher on Wednesday after Apple (AAPL) cleared low expectations in its recent quarter.

S&P 500 futures rose 0.15%, Dow Jones Industrial Average futures added 0.18%, and Nasdaq futures rose 0.67%.

Apple reported a 15% drop in revenue and 23% decline in per-share earnings in its second quarter as sales of iPhones continued to decline for the second quarter in a row. The number of iPhones sold dropped 15% from the year-ago quarter, but exceeded estimates. The tech giant shocked markets in its previous March-ended quarter after reporting a drop in overall company sales for the first time in 13 years and a fall in iPhone sales for the first time ever.  

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Apple's services segment, which includes iTunes, Apple Music, Apple Pay, was a bright spot with revenue rising 19% to $6 billion.

"We are encouraged by what has the makings of momentum in high-profit, high-growth and highly predictable recurring revenue streams, most prominently the company's Services business, which includes iCloud, data usage, App Store (and associated licensing/royalties), along with Apple Music, Apple Pay and Apple Care, said Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and AAPL research director Jack Mohr. The Action Alerts PLUS portfolio owns Apple.

Apple earned $1.42 a share in its third quarter, 4 cents higher than expected, while revenue of $42.4 billion cleared estimates by $310 million. Shipments of iPhone units reached 40.399 million compared to forecasts of 40 million. iPad shipments also came in stronger than expected.

Source: TheStreet