Please ensure Javascript is enabled for purposes of website accessibility

Why Domino's Pizza, Carbon Black, and NetEase Slumped Today

By Dan Caplinger – Updated Apr 22, 2019 at 10:49AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Some poor earnings results sent stocks lower.

The stock market gave up ground on Thursday, with the Dow Jones Industrial Average falling triple digits and other major market benchmarks following suit with declines of close to 0.5%. Investors seemed inclined to take their foot off the gas after the strong start to the year, as fears about possible deterioration in economic strength and the geopolitical climate weighed on sentiment. Bad news from some high-profile companies also hurt the overall market. Domino's Pizza (DPZ -0.89%), Carbon Black (CBLK), and NetEase (NTES 0.89%) were among the worst performers. Here's why they did so poorly.

Check out the latest NetEase, Carbon BlackDomino's earnings call transcripts.

Domino's gets burned

Shares of Domino's Pizza fell 9% after the restaurant chain reported tepid results for the fourth quarter of 2018. Same-store sales growth in the U.S. market was higher by 5.6%, but international comps climbed only 2.4%, and both figures fell short of what many investors were hoping to see. Shareholders also weren't satisfied with Domino's 25% rise in adjusted EPS, and even an 18% hike in the pizza chain's dividend to $0.65 per share wasn't enough to create any enthusiasm. Despite the decline, CEO Ritch Allison stayed optimistic about Domino's future, and shareholders could see a rapid rebound if the company's ongoing expansion plans go well.

Inside of Domino's store with counter, heat lamps, logo, and display materials.

Image source: Domino's.

Carbon Black sees a key departure

Cybersecurity specialist Carbon Black saw its shares plunge 24% after the company reported its fourth-quarter financial results and announced an executive departure. Carbon Black's results seemed reasonably strong on their face, with sales climbing 27% on a 32% rise in recurring revenue compared to the year-earlier period, and customer growth was also encouraging. However, the company said that CFO Mark Sullivan will resign in early March, and its guidance for 2019 indicated slowing growth prospects for the coming year. Wall Street analysts responded with ratings and price-target cuts, and that could bode poorly for the company's efforts to move further toward cloud-centered offerings.

NetEase loses a round

Finally, shares of NetEase sank 6%. The Chinese video game specialist reported a 36% rise in revenue in its fiscal third quarter, helping to boost adjusted net income by 26%. However, despite strength in its online gaming segment, weaker results in e-commerce, advertising services, and the innovative businesses division held back NetEase's overall results. Moreover, more companies are fighting to win video game market share both within China and in international markets. Overall, that spells bigger challenges for NetEase ahead, and shareholders seem uncertain whether the company's up to the task after a tough year for the stock.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NetEase. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NetEase, Inc. Stock Quote
NetEase, Inc.
$78.24 (0.89%) $0.69
Domino's Pizza, Inc. Stock Quote
Domino's Pizza, Inc.
$327.07 (-0.89%) $-2.92
Carbon Black Stock Quote
Carbon Black

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.