Stocks moved mostly sideways Tuesday as the market looked forward to major technology company earnings and awaited news on trade negotiations with China. The Dow Jones Industrial Average (DJINDICES:^DJI) managed a gain, but the S&P 500 (SNPINDEX:^GSPC) lost some ground.
Today's stock market
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Tech stocks were a drag on the market, with the Technology Select Sector SPDR ETF (NYSEMKT:XLK) losing 1.1%. Gold continued its rally of recent weeks, and the VanEck Vectors Gold Miners ETF (NYSEMKT:GDX) jumped 2.4%.
Cancer drugs help Pfizer's results
Shares of Pfizer rose 3.1% after the drugmaker beat estimates for fourth-quarter results but gave muted guidance for the upcoming year. Revenue grew 2% on a reported basis and 5% in constant currency to $14 billion. Adjusted earnings per share jumped 3.2% to $0.64. Analysts were expecting EPS of $0.63 on sales of $13.91 billion. Pfizer expects essentially flat revenue in 2019 and full-year EPS of $2.82-$2.92, compared with the consensus estimate of $3.04.
Pfizer is experiencing a number of crosswinds that are producing mixed results, but newly launched drugs are fueling growth. The company's forward-looking innovative health division grew 10% operationally, boosted by a 30% revenue jump in oncology, while essential health, which includes legacy products, had a revenue decline of 3%.
Results in 2019 will be affected by unfavorable currency movements and a low-single-digit decline in worldwide drug prices. But Pfizer is also looking forward to benefits from its consumer healthcare merger with GlaxoSmithKline and up to five new FDA approvals in the year.
Verizon's top-line growth disappoints
Verizon turned in mixed results for the fourth quarter, beating on profit expectations but missing revenue projections despite strong subscriber additions, and the stock fell 3.3%. Revenue grew 1% to $34.3 billion while retail postpaid connections increased 2.3% after the company posted 1.2 million net additions in the quarter. The top line was also held back by Verizon Media, with revenue at the struggling unit falling 5.8% to $2.1 billion. Adjusted earnings per share grew 30% to $1.12, beating the analyst consensus of $1.09.
The company saw average revenue per retail postpaid account (ARPA) slip 0.5% from the period last year, but in the conference call, CFO Matt Ellis said temporary factors were to blame and that APRA should improve in 2019, as should service revenue.
Verizon is restructuring and investing in 5G technology, upgrading its network, and rolling out its 5G Home router product. Analysts on the call tried to pump Verizon executives for clues to the timing of the 5G rollout, but CEO Hans Vestberg would only say, "We're deploying as fast as we can."