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

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

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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.

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Stocks Mentioned

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

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