The daily business briefing: July 28, 2016

Strong sales boost Facebook's stock, the Fed holds interest rates unchanged, and more

The Facebook logo on mugs
(Image credit: Sean Gallup/Getty Images)

1. Facebook ad sales beat expectations

Facebook shares jumped by as much as eight percent in after-hours trading on Wednesday after the social media giant reported ad sales that smashed Wall Street expectations. Second quarter revenue increased by 59 percent to $6.44 billion, up from $4.04 billion in the same period last year. Analysts had forecast just $6 billion. One factor driving the gains was an increase in Facebook ads sold for high prices. Profits hit 71 cents a share, up from an expected 57 cents, and just 25 cents a share reported a year ago.

Forbes

2. The Fed holds interest rates steady as outlook brightens

Federal Reserve policy makers left interest rates unchanged, as expected, at the conclusion of a two-day meeting on Wednesday. The Fed said, however, that looming economic risks had faded, suggesting the U.S. central bank could be open to a slow resumption of interest rate hikes from near zero in coming months. The Fed hit the brakes earlier this year as oil prices and stocks plummeted, then put off resuming the hikes after a terrible May jobs report and the U.K.'s June vote to exit the European Union.

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Reuters

3. Samsung's profits rise on strong Galaxy sales

South Korea's Samsung on Wednesday reported its biggest quarterly profit in two years on strong sales of its Galaxy S7 smartphone, with net income rising by a slightly better-than-expected 2 percent to $5.2 billion. Galaxy sales benefited from a lack of new gadgets from rivals, helping to offset lower income from sales of other Samsung products, such as semiconductors and display panels. Samsung, the world's largest smartphone maker, forecast continued "solid" performance on strong lucrative high-end smartphone displays.

The Associated Press

4. Ford sales decline despite incentives

Ford's second-quarter auto sales dropped by nine percent compared to a year earlier, the company reported Thursday. Bob Shanks, Ford chief financial officer, said a recent boom in car and truck sales appears to be cooling down despite industry incentives. Ford earned 52 cents a share, falling short of expectations of analysts surveyed by Thomson Reuters, who forecast 60 cents a share. Ford shares fell by more than six percent in pre-market trading.

Detroit Free Press

5. Shell says weak oil prices hurt quarterly profits

Royal Dutch Shell on Thursday reported that its quarterly profits had dropped by 72 percent due to weak oil prices. Shell's net income fell $1.1 billion short of analysts' expectations. Shell shares dropped by more than three percent Thursday after the announcement, the worst day in two months for the energy giant's stock. Two Shell rivals — BP and Statoil — also reported quarterly results that disappointed Wall Street this week due to cost reductions that fell short of expectations.

Reuters

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Harold Maass

Harold Maass is a contributing editor at TheWeek.com. He has been writing for The Week since the 2001 launch of the U.S. print edition. Harold has worked for a variety of news outlets, including The Miami Herald, Fox News, and ABC News. For several years, he wrote a daily round-up of financial news for The Week and Yahoo Finance. He lives in North Carolina with his wife and two sons.