The daily business briefing: May 2, 2018

1. Apple report eases fears over iPhone sales

Apple reported Tuesday that it sold 52.2 million iPhones in the first quarter of 2018, up from 51 million in the same period last year but just shy of the 53 million analysts expected. The company's sales reached $61 billion, up 16 percent over the same period in 2017. Its profits, boosted by the higher price of the newest iPhone, jumped by 25 percent to $13.8 billion, easing fears that cooling iPhone sales would hurt the bottom line. Apple also promised another $100 billion in stock buybacks, helping to send its shares up by 3.6 percent in after-hours trading.

Reuters

2. Facebook says it will let users opt out of web-data collection

Facebook CEO Mark Zuckerberg announced Tuesday that the social network would soon start letting users opt out of the company's practice of gathering data on their web browsing history. Facebook uses the information to sell targeted ads. Under Facebook's upcoming "clear history" program, users will be able to delete their web data from Facebook servers, or simply tell the company not to collect it at all. Facebook would still gather the information, but anonymously, offering it to companies for analytics purposes but not linking it to an individual user. Facebook has been facing criticism over its policies to protect user privacy following the revelation that data-mining firm Cambridge Analytica, which did work for President Trump's campaign, improperly used user data for political ads.

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Recode

3. Snap shares dive after revenue and user numbers miss expectations

Snap Inc. shares plunged by 16 percent in after-hours trading on Tuesday after the parent of the Snapchat app reported revenue and regular users that fell below Wall Street's expectations. The company said revenue growth would slow in the second quarter, after a first quarter in which its daily active users rose to 191 million. That was 15 percent higher than in the same period last year, but below the expected 194.2 million. The messaging app's closely watched redesign "just didn't make users happy," said eMarketer analyst Debra Aho Williamson. "That's not a good position to be in."

Reuters

4. Fed expected to leave interest rates unchanged

The Federal Reserve is expected to leave interest rates unchanged at the end of a two-day policy meeting on Wednesday. A new report released Tuesday showed that inflation had reached an annual rate of 2 percent, the Fed's target, but the news was not expected to alter the central bank's plan for increasing interest rates, which it held near zero for years to encourage lending and help lift the economy after the Great Recession. Most analysts expect the Fed to raise rates two or three more times this year as the economy continues to strengthen, unemployment remains low, and inflation hovers around 2 percent. Global shares were mixed early Wednesday ahead of the Fed's announcement.

The Associated Press

5. Guitar maker Gibson files for bankruptcy protection

Iconic guitar maker Gibson Brands on Tuesday filed for bankruptcy protection, although it said it had struck a deal with creditors that would let it continue manufacturing musical instruments. Gibson also makes Baldwin pianos, Wurlitzer organs, and other widely recognized brands. The company's sales slipped as popular music was increasingly made with computers, rather than the guitars it made for such music legends as Elvis Presley, Keith Richards, and blues great B.B. King, whose beloved guitar Lucille was his trademark for years. Gibson has 22 percent of the market for electric guitars, and 40 percent for $2,000-plus guitars, including its Les Paul model. The company said its restructuring plan calls for killing its innovations division and focusing on its core instruments.

USA Today