Investors endured another day of losses in the stock market on Thursday, with the Dow Jones Industrial Average (DJINDICES: ^DJI) plummeting 1,000 points for the second time this week and the S&P 500 (SNPINDEX: ^GSPC) falling 100 points.
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Today's stock market
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All sectors were in the red, but financials and consumer stocks were hit hardest. The Financial Select Sector SPDR ETF (NYSEMKT: XLF) fell 4.4% and the Consumer Discretionary Select SPDR ETF (NYSEMKT: XLY) dropped 4%.
Two internet stocks bucked the trend after releasing earnings. Twitter (NYSE: TWTR) announced a profitable quarter and Grubhub (NYSE: GRUB) reported strong growth and new partnership.
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Twitter stock rose 12.2% after the company reported its first-ever quarterly profit and beat expectations on both the top and bottom lines. Revenue for Q4 was up 2% to $732 million and the company earned a GAAP profit of $91 million compared with a loss of $167 million last year. Non-GAAP earnings per share came in at $0.19. Analysts were expecting adjusted EPS of $0.14 on sales of $686 million.
Monthly active users of 330 million were up 4% over last year and flat with the previous quarter. Daily active users (DAU) grew 12% over last year. The company attributed its revenue growth to strong engagement growth, improved revenue features, improved return on investment, and better sales execution. All of the revenue growth came from overseas, though. U.S. revenue fell 8% to $406 million, while international revenue grew 17% to $326 million.
"Q4 was a strong finish to the year," said CEO Jack Dorsey in the press release. "We returned to revenue growth, achieved our goal of GAAP profitability, increased our shipping cadence, and reached five consecutive quarters of double digit DAU growth."
Though user growth was not spectacular, the market is focused on whether Twitter can convert that usage into profit. A 75% jump in ad engagements and success with video ad format helped investors believe the profit achieved this quarter is something the company can sustain in 2018.
Grubhub delivers big growth and a new partnership
Online food delivery service Grubhub announced expectations-beating quarterly results and a partnership with Yum! Brands (NYSE: YUM) that got investors excited enough to bid the stock up 27.4% today.
Revenue in the fourth quarter grew 49% to $205 million and non-GAAP EPS increased 68% to $0.37. Wall Street was expecting EPS of $0.31 on sales of $202 million. Active diners increased 77% to 14.5 million and gross food sales were up 39% to $1.1 billion.
Yum! is partnering with Grubhub to bring online ordering for pickup and delivery to its KFC and Taco Bell restaurants in the U.S. As part of the agreement, Yum will buy $200 million in Grubhub stock, a 2.6% stake, and the proceeds will be used to expand the company's delivery network. Grubhub will also expand its board from nine to 10 members, and appoint Pizza Hut U.S. President Artie Starrs to the new seat.
"Over the past two years we have taken incredible strides in expanding the breadth and depth of our restaurant network, growing the number of local restaurants we work with from 40,000 to over 80,000 today," said Grubhub CEO Matt Maloney. "The partnership with Yum! which we announced this morning will accelerate the expansion of our delivery network and amplify our diner acquisition efforts, raising consumer awareness of online ordering and driving more volume for all restaurants across our platform."
The latest results show that Grubhub is scaling its business rapidly, and the deal with one of the giants in the quick-serve industry illustrates how much further the company can go as food delivery increases in popularity. Not that investors needed a lot more encouragement; Grubhub stock gained 91% in 2017.
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