Biz Break: Apple Pay helps bring some shine back to Apple

Top Of The Order:  

The Sun Shines On Cupertino: Who knows? It might be only for one day. Things could change tomorrow. But, for Wednesday, Apple was back in that place where it has spent so many years, right on top, being the, uh, Apple of everyone’s eye. A better-than-expected earnings report will do that. By the end of the day, Apple’s shares had risen 6.6 percent, to close at their highest point in three months: $103.03.

Services were a big factor in Apple’s results, as the unit brought in $5.98 billion in revenue, a 19 percent gain from a year ago. Apple Pay is one of those services helping to give Apple a new area of growth, and apparently succeeding even more than Chief Executive Tim Cook thought it would.

As he was discussing Apple’s results late Tuesday, Cook said that, according to retailers, Apple Pay handles 75 percent of all so-called “contactless” payments in the U.S. Since Apple gets a cut of all the payments run through Apple Pay, the service is providing Apple with a source of easy revenue, and earnings.

With Apple Pay gaining more usage — Cook said Apple is adding a million new users every week — services are becoming a bigger part of Apple’s future. Now, if the company can get the iPhone headed back in the right direction…

Middle Innings:

Is The Eighth Time The Charm?: What do you think would happen to you if you ignored a summons to show up before the Internal Revenue Service to answer questions about your taxes? Well, you might get a letter serving you with a second invitation to come down to the local IRS office and talk about why you claimed “Fluffy T. Cat” as a dependent.

But what if you got summons No. 7 and you still didn’t answer the call of the IRS? Yeah, an audit might be the least of your worries.

Well, that’s what Facebook did. The company got seven different summons from the IRS, which wants to examine the social-media company’s records about one of its offshore tax strategies involving global rights of intangible assets that aren’t in the U.S. or Canada that were transferred to Ireland. And Facebook ignored every one of them, including one asking the company to show up June 29 at an IRS office in San Jose.

There’s no word, yet, about if the IRS is planning on hitting up Facebook Chief Financial Officer David Wehmer with another summons. If it is, it might want to make sure he isn’t hiding under his desk.

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks did Wednesday…

Movin’ On Up: In addition to Apple, gains came from Netsuite, Cavium, Sanmina, InvenSense and Intersil.

In The Red: Twitter shares fell more than 14 percent to close at $15.77 after a disappointing quarterly report. Other decliners included Nanometrics, Juniper Networks, Linear Technology and NeoPhotonics.

The tech-focused Nasdaq Composite Index rose 0.6 percent to 5,139.

The blue chip Dow Jones Industrial Average ended the day off by 1.6 points at 18,472.

And the broad-based Standard & Poor’s 500 Index shed just 2.6 points to close at 2,166.

Quote Of The Day: “He’s fun to play with.” — Golden State Warriors forward Klay Thompson, speaking about his new teammate, Kevin Durant. Thompson, Durant and fellow Warrior Draymond Green helped Team USA beat China, 107-57, in an exhibition game at Oracle Arena Tuesday night.

Sign up for the 60-Second Business Break newsletter at www.siliconvalley.com.

Photo: Apple Pay is promoted on signs placed at the cash register of Whole Foods in Columbus Circle on Oct. 20, 2014 in New York. (Bryan Thomas/Getty Images)

 

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