Boeing Co. (NYSE:BA), Biogen Idec Inc. (NASDAQ:BIIB), and Discover Financial Services (NYSE:DFS) led the way down as the stock market broke a three-session winning streak on Wednesday. Major indices retreated on relatively light volume, and oil prices resumed their recent freefall — a trend that Wall Street would normally applaud.
Investors, however, were more focused on earnings season today. That leads us to Boeing Co., Biogen Idec Inc. and DFS stock.
Although no major index lost much more than 1%, shares of each lost far more than that as they went on to finish as three of today’s worst performers.
Boeing Co. – NYSE:BA
Sometimes Wall Street can be darn hard to please. BA stock shed 4.5% on Wednesday after announcing what most investors would consider to be an exceptional quarter. The aerospace titan beat both earnings and revenue expectations in the third quarter, and Boeing CEO Jim McNerney publicly flirted with the idea of a juiced-up BA stock buyback program.
So what gives?
Boeing’s margins were the major point of concern today, and the main reason BA stock got left in the gutter. Operating margins fell 40 basis points from 11.6% to 11.2% as the Chicago-based industrial giant saw the lower-margin 787 and 747-8 models make up a greater portion of its product mix.
Biogen Idec Inc. – NASDAQ:BIIB
Shares of biotech powerhouse Biogen Idec also took a beating Wednesday, slumping 5.4% on the heels of its own earnings report. But, like Boeing, BIIB stock didn’t fall because of its third-quarter results, which in and of themselves were rather impressive.
Instead, BIIB tumbled after CEO George Scangos revealed to analysts that a patient using Biogen Idec’s multiple sclerosis treatment Tecfidera died. The patient had used Tecfidera for more than 4 years, and after one year of treatment he had developed a white blood cell-deficiency. BIIB stock faces a legitimate threat from the Food and Drug Administration, which could revisit the approval of Tecfidera — a product the FDA once before pulled from shelves back in 2005.
Discover Financial Services – NYSE:DFS
Finally, credit card provider Discover Financial Services saw its stock shed 5.2% today after — you guessed it — reporting third-quarter results. In our third and final case of today’s counterintuitive Wall Street reactions, DFS stock lost ground despite actually beating earnings expectations.
Although net income rose 8.6% in the period, there are two potential obstacles facing DFS stock. The most immediate concern is the specter of rising expenses, which seems like a very real possibility after announcing it may take a $185 million fourth-quarter charge related to changes in its rewards programs.
Longer-term, DFS is also the last remaining credit card provider that hasn’t yet partnered with the Apple (AAPL) Pay service, which may either be a wise move or a strategy Discover will lament if Apple pay becomes pervasive.
As of this writing John Divine held shares of AAPL stock. You can follow him on Twitter at @divinebizkid.
