Tuesday's optimism over a China trade deal and possibly avoiding a government shutdown carried over to stocks on Wednesday. The Dow Jones Industrial Average (^DJI 0.78%) and the S&P 500 (^GSPC 1.29%) were also helped by moderate inflation data in the Consumer Price Index.
Today's stock market
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Energy stocks were market leaders today, with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP 4.04%) up 2.2%. Utilities fell on rising long-term interest rates; the Utilities Select SPDR ETF (XLU -0.04%) slipped 0.3%.
Activision Blizzard sees a challenging year ahead
Shares of Activision Blizzard have fallen in recent months in the wake of competitive pressure from the likes of Fortnite, but they held up well today, gaining 7% after the company reported fourth-quarter results that beat guidance. Revenue grew 16.5% to $2.38 billion and non-GAAP earnings per share soared 84% to $0.90. Three months ago, the company said to expect earnings of $0.64 on revenue of $2.24 billion.
The company's monthly active users (MAUs) increased 3.2% to 11 million in the quarter, with audience gains in the Activision and King segments offsetting a loss of 2 million MAUs of Blizzard. Despite the decline in users in the quarter, Blizzard still posted 15% growth in revenue year over year and 51% growth in operating income.
Activision Blizzard's outlook for 2019 was lighter than expected, with the company saying it will not improve in-game monetization as quickly as it would like, and it has less new content to release than it should. The forecast was accompanied by news that it will lay off 8% of its workforce while increasing developers on its most successful games by 20%.
Don't expect much profit from Twilio as it invests in expansion
Communications software seller Twilio beat expectations for fourth-quarter revenue growth by a mile but guided to low profits in the near future, and shares fell 7.3%. Revenue of $204.3 million was up 77% from Q4 last year and 21% from last quarter, beating expectations of $185 million. Non-GAAP earnings per share came in at $0.04, about what Wall Street had forecast.
Twilio added 3,133 new active customer accounts in the quarter for a total of 64,286, a 31% increase year over year. The dollar-based net expansion rate, Twilio's metric to measure year-over-year spending by active accounts, was 147%, up from 145% last quarter.
Twilio said there were one-time factors driving up Q4 numbers, including the midterm election and unusual spending by a large customer. That fact and guidance for lower EPS in 2019 as the company invests in top-line growth may have disappointed some investors, but the share price move is but a tiny blip compared with the stock's massive gains in recent months.