Friday was a fitting capstone to a week where headlines were dominated by a swath of disappointing quarterly earnings reports, most marked with gloomy forecasts of things to come.
Research In Motion (NASDAQ:RIMM) continued its seemingly year-long descent down the sadness spiral after the bell Thursday with an anticipated poor third-quarter report, unexpectedly low guidance for the fourth quarter and a final bomb: the announcement that the release of its BlackBerry 10 phones would be pushed back to the end of 2012. RIMM shares plummeted 11% on Friday to $13.44 — the stock’s lowest finish of the year and down 75% from the start of 2011.
Third-quarter earnings of $1.27 per share were seven cents better than expected by Wall Street analysts, but the $265 million total still was down 71% from the same period a year ago. Revenues of $5.2 million also slightly missed expectations. RIM’s fourth-quarter revenue guidance was set around $4.6 billion to $4.9 billion, while Wall Street expects $5.2 billion.
The real kicker, however, was that announcement about BlackBerry 10 phones being delayed. Co-CEO Mike Lazaridis said the company had to push back the launch because it’s still waiting for LTE-capable chipsets. Investors took the news poorly because it means RIM must continue to languish with its lackluster BlackBerry 7 OS.
Earlier in the week, other major players saw bad things in their crystal balls. Intel (NASDAQ:INTC) lowered its fourth-quarter revenue estimate from $14.7 billion to $13.7 billion on Monday, with the company citing disruptions from massive flooding in Thailand, which has rocked numerous sectors, including hard-drive makers. Best Buy (NYSE:BBY) was hammered on Tuesday after saying it expected profit margins to fall by about 0.5% across 2012, in addition to announcing 13% drop in fiscal Q3 profit. And First Solar (NASDAQ:FSLR) started a solar-sector avalanche after lowering fiscal year guidance for the third time in 2011.
Here were some of the other big financial headlines of the week:
Gold Breaks 200-Day Moving Average
Gold has been one of 2012’s biggest winners, but this week the yellow metal found itself dragging against a relative bottom. Gold prices cracked the $1,600 point Wednesday, and more important, breached its pivotal 200-day moving average for the first time in almost three years. The major investment trusts took one on the chin this week, with the SPDR Gold Trust (NYSE:GLD) and iShares Gold Trust (NYSE:IAU) shedding almost 7% in the past five days.
The biggest question on the minds of many investors is “Where will gold go next?” While fundamentals actually point to a continued downtrend into the $1,400s, many predict that a continued lack of confidence in financials and the European recovery will produce a rebound sooner than later.
Big Moves in Big Pharma
Pfizer (NYSE:PFE) made a pair of announcements earlier this week specifically designed to enrich its shareholders. The company expanded its share repurchase program by $10 billion — with plans to buy back about $5 billion worth in 2012 — and also announced a 10% boost to its quarterly dividend. Pfizer now will pay out 22 cents per share for a supple 4% dividend yield.
On Thursday, health care device and supply company Covidien (NYSE:COV) announced it would spin off its pharmaceuticals business — this comes off the heels of Abbott Laboratories’ (NYSE:ABT) similar move in October. Not only was the announcement well-received by COV investors, who carried shares up 3.5% Thursday, but also for shareholders in Sanofi (NYSE:SNY), GlaxoSmithKline (NYSE:GSK) and Novartis (NYSE:NVS) — all of which could be breakup candidates.
Three Up for Friday
- Vertex Pharmaceuticals (NASDAQ:VRTX): Up 7.89% ($2.48) to $33.91.
- Adobe (NASDAQ:ADBE): Up 6.58% ($1.74) to $28.20.
- Discover Financial Services (NYSE:DFS): Up 4.85% ($1.12) to $24.19.
Three Down for Friday
- Sears Holdings (NASDAQ:SHLD): Down 8.18% ($4.12) to $46.25.
- Nokia (NYSE:NOK): Down 3.91% (19 cents) to $4.67.
- Accenture (NYSE:ACN): Down 3.35% ($1.88) to $54.25.
As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.