Stocks didn’t get the week (nor earnings season) started all that well, with the major indices sinking an average of 0.8% on Monday. Energy stocks led the way, as crude oil hit yet another multi-year low near $46.00 per barrel thanks to today’s 4.3% stumble.
Among the worst of the worst were Tenet Healthcare Corp. (THC), SanDisk Corporation (SNDK) and Tiffany & Co. (TIF), each of which dipped deep into the red ink on Monday because thanks to alarming outlooks.
SanDisk Corporation (SNDK)
SanDisk Corporation shares dropped hard Monday after warning its Q4 numbers won’t be as strong as first presumed.
SanDisk, a maker of flash memory drives used in devices like tablets and smartphones, isn’t apt to post sales of somewhere between $1.8 billion and $1.85 billion for its fourth quarter when it reports those numbers on Jan. 21. Instead, the company only anticipates a top line of $1.73 billion for the quarter completed near the end of last month.
The weaker revenue projection also is likely to lead to slightly thinner margins. Gross margins are now only expected to roll in at 45% for the fourth quarter, versus previous guidance of margins in the 47% to 49% range.
SNDK stock finished the day down nearly 14%.
Tenet Healthcare Corp. (THC)
The good news is, Tenet Healthcare Corp. is going to do as well as it expected to do in 2014. The bad news is, 2015 is going to be disappointing.
For 2015, Tenet Healthcare projects this year’s revenue to roll in somewhere between $17.4 billion and $17.7 billion, and further believes it will be able to post a profit of something between $1.32 and $2.40 per share of THC stock. The problem: The analyst community collectively predicted a top line of $17.4 billion, and earnings of $2.69 per share.
When all was said and done, THC stock fell 9% on the discouraging guidance for the current year.
Tiffany & Co. (TIF)
Tiffany & Co. shares got slammed on Monday, to the tune of 14%, after letting investors know its fourth quarter sales didn’t shine as brilliantly as its jewelry does. All told, revenue for the luxury retailer slumped 1% in the all-important months of November and December. Domestic sales were as disappointing as foreign sales, after disadvantageous exchange rates negated much of the benefit of decent overseas sales growth.
The revenue slump during the busy holiday shopping season also prompted Tiffany & Co. to post a full-year profit outlook that was lower than estimates. Tiffany previously projected a profit between $4.20 and $4.30 per share of TIF stock, but the company now says the likely figure is going to fall somewhere between $4.15 and $4.20. The pros were looking for $4.31.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
