Stocks ended a five-session win streak on Wednesday, with the number of advancing issues about equal with declining ones. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) posted small losses.
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The communications services sector pulled back, and the Communication Services Select SPDR ETF (NYSEMKT:XLC) fell 2.2%. Semiconductor stocks had a bit of a comeback, though, with the iShares PHLX Semiconductor ETF (NASDAQ:SOXX) gaining 2.7%.
Disney starts the year on a positive note
Walt Disney reported fiscal first-quarter results that soundly beat expectations as it embarks on a year that will see monumental changes for the House of Mouse. Revenue was essentially flat at $15.3 billion, and adjusted earnings per share fell 2.6% from Q1 last year to $1.84. Analysts were expecting the company to earn $1.55 per share on revenue of $15.2 billion. Shares declined 1.1%.
The media networks segment had revenue growth and operating income growth of 7%, as the worst seems to be over for ESPN, which had higher affiliate and advertising revenue, but increased programming costs. Growth at domestic theme parks offset some weakness at Shanghai Disney, with that segment growing revenue by 5% and operating income by 10%, but revenue from the studio segment fell 27%.
Disney is investing in its streaming capability, with ESPN+ doubling paid subscribers in five months to 2 million, while work is underway to launch Disney+ later this year. The company is also hard at work preparing for the integration of Twenty-First Century Fox when the deal closes, which could be in the first half of this year.
GM cruises higher on strong truck sales
Shares of General Motors rose 1.6% after the company reported higher-than-expected profit in the fourth quarter, as domestic truck sales helped offset weakness in China. Revenue increased 1.8% to $38.4 billion, beating expectations of $36.5 billion. Adjusted earnings per share fell 13.3% to $1.43, which was well ahead of the analyst consensus of $1.22.
GM North America grew sales by 3.7% and profit by 5.7%, helped by strong pricing for GM's newly launched full-size pickup trucks. The company characterized the China market as "softening," however, and GM International had a sales decline of 12.9% and generated a loss of $48 million. Overall, earnings before interest and taxes for GM fell 8.3% from the period a year ago.
Adjusted automotive free cash flow for 2018 was $4.4 billion, above earlier guidance of $4 billion. GM is navigating a transformation, cutting back production in the U.S. and bolstering investment in new technologies.