Please ensure Javascript is enabled for purposes of website accessibility

Stock Market News: Twitter Gets More User Love; Yum! Is Less Appetizing

By Dan Caplinger - Updated Feb 6, 2020 at 12:19PM

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

Stocks opened higher again on Thursday morning.

The stock market generally continued to gain ground on Thursday morning, buoyed by new optimism in trade relations between the U.S. and China. Chinese officials announced that they would reduce the additional tariffs that the nation imposed on U.S. imports in September, cutting incremental rates on items like oil, soybeans, and meat by half. As of 10:15 a.m. EST today, the Dow Jones Industrial Average (^DJI 0.45%) had given up early gains and was down 8 points to 29,283. But the S&P 500 (^GSPC 0.40%) rose 5 points to 3,339, and the Nasdaq Composite (^IXIC 0.00%) picked up 25 points to 9,534.

Investors continued to see results from major U.S. companies, but they tended to present a mixed picture of the overall business environment. Social media giant Twitter (TWTR 0.54%) saw encouraging results that sent its stock sharply higher, but for Yum! Brands (YUM 0.07%), the latest quarterly numbers left most shareholders hungry for more.

Twitter's all atwitter

Shares of Twitter jumped 16% after the microblogging specialist released its latest results for the fourth quarter. The numbers closed what Twitter said was a great year for the company.

Blue bird logo against a white background.

Image source: Twitter.

User metrics certainly seemed to confirm that idea. Average monetizable daily active users climbed by 26 million from year-ago levels to 152 million, and that was up by 7 million in just the past three months. That helped to lift revenue for the quarter by 11%, taking it above the $1 billion mark. Although fourth-quarter net income declined year over year, investors nevertheless seemed willing to accept the bottom-line result without punishing the stock.

Twitter is setting a number of strategic objectives, including efforts to boost development, healthy public conversation, and revenue durability. The social media company expects to boost its workforce by 20% this year, add new data center capacity, and make other internal investments.

Twitter did a good job of exceeding the expectations it set in its previous guidance, and that has many investors talking positively about the stock. The share price still hasn't caught up to where it traded last summer, but today's move eases the fears that have plagued Twitter for the past several months.

A yucky day for Yum!

Shares of Yum! Brands were down 3% Thursday morning, as market participants digested its latest quarterly results. The restaurant chain saw good performance from several of its concepts, but one area of weakness weighed on overall results.

At first glance, fourth-quarter results for Yum! seemed positive. Adjusted earnings of $1 per share jumped almost 150% from year-ago levels, and worldwide system sales rose 10% when you exclude foreign currency impacts. But many investors had expected even stronger gains in net income.

There were also signs of uneven performance. Same-restaurant sales at KFC were up 3%, while Taco Bell enjoyed 4% growth in comps. But Pizza Hut took a 2% hit. Moreover, the operating-profit numbers among the three divisions looked similarly inconsistent, with Pizza Hut seeing its segment bottom line fall even as KFC and Taco Bell enjoyed solid gains.

Yum! still has a lot going for it, and even with Pizza Hut struggling, many see a lot of potential for the chain. As chicken gains in popularity and bolsters KFC's prospects, Yum! could get some help as it continues to navigate its strategic transformation and puts its new ideas for future growth to the test.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. 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

Yum! Brands, Inc. Stock Quote
Yum! Brands, Inc.
YUM
$118.24 (0.07%) $0.08
Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$44.50 (0.54%) $0.24
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,912.44 (0.45%) $151.39
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,297.14 (0.40%) $16.99
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$13,047.19 (0.00%) $0.00

*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
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

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.