Following though on Thursday’s surge, stocks finished the week on a high note. In fact, the S&P 500 went on to finally hit a record high of 2096.99 before closing. All told, the market gained 2% for the week.
Not every stock was a winner on Friday, however. In fact, some stocks were big losers, including DaVita HealthCare Partners Inc. (NYSE:DVA), ConAgra Foods Inc. (NYSE:CAG) and Zynga Inc. (NASDAQ:ZNGA).
Here’s what happened.
Zynga (ZNGA)
Zynga is proof that when you’re posting regular losses, there’s no margin for error with shareholders.
Last quarter, on an operating basis, Zynga broke even, as expected. Revenue of $192.5 million, however, fell short of the average outlook for $199.8 million. The company poured salt in the wound by offering Q1 revenue guidance of $155 million to $165 million. Analysts had been expecting a top line of $200.1 million for the current quarter.
Between the shortfall, tepid outlook, and a salvo of lowered price targets from the analyst community, ZNGA stock closed nearly 16% lower on Friday.
Several analysts also offered commentaries to explain their lowered price targets, but none were as interesting — or direct — as those from Wedbush Securities’ Michael Pachter. He said:
“We’re looking for them to tell us that they actually have a plan to generate revenue going forward, and that revenue is going to grow…The CEO has been there for a year and a half [and, during that time,] they have not launched anything that has moved the needle…It would be nice if they would tell us what all those people who work there do.”
DaVita HealthCare Partners (DVA)
By most accounts, shares of DaVita HealthCare Partners should be soaring today. The company topped its fourth-quarter bottom-line and top-line estimates by healthy margins. As has been the case far too many times this earnings season, though, the company’s outlook torpedoed DVA stock … to the tune of more than 4%.
The specifics: In the fourth quarter of 2014, DaVita HealthCare Partners earned 96 cents per share of DVA stock versus expectations of only 92 cents. Revenue of $3.33 billion exceeded expectations of only $3.27 billion.
The stumbling block for DaVita HealthCare Partners was its outlook for the current year … the company didn’t raise its previous guidance levels. DaVita still expects to generate operating income of somewhere between $1.75 and $1.90 billion in 2015. That, however, just wasn’t good enough for current shareholders.
ConAgra Foods (CAG)
ConAgra Foods announced that the company’s new CEO would be a veteran defector from a rival company, but not even that was enough to stave off a sizable 4% pullback from ConAgra Foods.
Thursday afternoon, the packaged food company posted a revised earnings outlook for fiscal 2015 (ending in May). ConAgra Foods previously projected a profit of somewhere near or above $2.20 per share, but due to the strong U.S. dollar and higher commodity prices is now only expecting per-share income of somewhere between $2.13 and $2.18. The average analyst profit estimate for 2015 had been $2.26 per share of CAG stock.
It was also announced on Friday that former Hillshire Brands CEO Sean Connelly would be taking over as CEO in April, taking the reins from current chief executive officer Gary Rodkin. Considering Connelly guided Hillshire all the way through to its acquisition by Tyson Foods, Inc. (NYSE:TSN) last year. The market wasn’t impressed.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
