Stocks seesawed Thursday as investors focused on earnings reports. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) were little changed, but advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange.
Today's stock market
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Semiconductor stocks soared after some encouraging earnings reports and transportation shares got a lift from airline earnings. The iShares PHLX Semiconductor ETF (NASDAQ:SOXX) jumped 5.8% and the SPDR S&P Transportation ETF (NYSEMKT:XTN) rose 1%.
Merger uncertainties, drug approval delay tarnish Bristol-Myers Squibb's quarter
Bristol-Myers Squibb reported growth in the fourth quarter, but investors were more focused on news of a setback in lung cancer and fresh insight into the company's pending acquisition of Celgene, and shares slipped 1.9%.
Revenue increased 9.6% to $5.97 billion, about what analysts expected. The company saw 33% and 43% gains in sales of cancer drugs Opdivo and Yervoy, respectively, and a 25% sales increase for blood anticoagulant Eliquis. Non-GAAP earnings per share grew 38% to $0.94, beating expectations for $0.85. Guidance for 2019 revenue growth of "mid-single digits" was a bit shy of the 7% Wall Street was expecting.
Bristol also announced a withdrawal of a biologics license application to the FDA for Opdivo and Yervoy in first-line advanced non-small cell lung cancer, pending results of further trial data. The setback follows other disappointments by Bristol in the hotly contested lung cancer market.
The conference call was mostly devoted to the company's case for the Celgene acquisition, with Bristol executives emphasizing the cash-generation capability and strong pipeline of the combined company. Bristol also expects to continue dividend increases and to grow pro forma EPS by about 60% from 2019 to 2025.
Texas Instruments beats on profit
Texas Instruments beat profit expectations for the fourth quarter, and despite a forecast of a semiconductor slowdown that could last 12 months, its results and an outlook that wasn't as bad as it could have been lifted shares 6.9%. Revenue fell 0.8% to $3.72 billion, below the $3.75 billion analysts were expecting. Earnings per share of $1.27 beat expectations by $0.03. Cash flow from operations was up 11% to $2.15 billion.
Looking forward, Texas Instruments guided to first-quarter revenue of $3.34 billion to $3.62 billion and EPS between $1.03 and $1.21, both below the analyst consensus. That forecast could have caused the stock to drop, but investors parsing comments in the conference call evidently found some encouragement. Meanwhile, the company continues to generate huge cash flow, which it's returning to shareholders.