A fairly steep drop in consumer confidence this month may have gotten the market started on the wrong foot Tuesday morning, but it didn’t keep the market down. When all was said and done, the S&P 500 finished the day up 0.28%, closing at 2,114.81.
Twitter Inc. (NYSE:TWTR) suffered just before the closing bell, as earnings were leaked early.
Meanwhile, Coach Inc. (NYSE:COH), Corning Incorporated (NYSE:GLW) and Honda Motor Co Ltd (NYSE:HMC) all suffered setbacks for the same reason on Tuesday … a strong U.S. dollar.
Twitter (TWTR)
Twitter stock fell 18% after reporting awful Q1 results were leaked ahead of the official earnings announcement.
Operating earnings of seven cents per share topped estimates for a profit of only three cents per share of TWTR. But, revenue of $436 million came up shy of the expected $456 million. Investors weren’t impressed by the 74% year-over-year growth of the top line.
Honda Motor (HMC)
Despite the strong dollar (and therefore weak yen) setting up a potential flood of vehicle sales to the all-important U.S. consumer market, Honda Motor didn’t post impressive income numbers for its recently-completed quarter. Profits fell 43% on a year-over-year basis for the company in its fiscal Q4.
To be fair, revenue was up for the automaker. But, the same strong dollar that spurred better demand from U.S. buyers also made it more expensive for Honda to buy vehicle components from American suppliers.
Further sapping profits for HMC were the costs associated with recalls. About 20 million Honda Motor vehicles with Takata airbags posed a significant danger to drivers, forcing the company to incur the costs of making necessary repairs. Shares closed nearly 7% lower.
Corning (GLW)
The good news: Corning had a pretty good first quarter, topping estimates and beating year-ago profit numbers. The bad news: Nobody cared, sending GLW down more than a full percentage point.
The specifics: Corning earned 35 cents per share last quarter, versus only 20 cents per share for the same quarter in 2014. Analysts were only looking for a profit of 34 cents per share of GLW. Revenue, however, fell just a bit, to $2.27 billion, although net sales were up 4.5%. The top line still came up short of estimates, though.
Like many other companies, Corning attributed its headwind to the strength of the U.S. dollar, or in this particular case, to the weakness of the euro.
One bright spot … the glass Corning makes for smartphone displays continues to sell well, and that strength is expected to persist at least through the current quarter.
Coach (COH)
Any investor who got into Coach at any point since the middle of 2014 was sharply disappointed today, as a huge chunk of the 30% gain COH had made since last August was wiped away.
The prod for the pullback from the maker of handbags and accessories was weak sales and even weaker earnings for its third fiscal quarter of the year. Same-store sales in North America alone fell 24% on a year-over-year basis, while overall earnings of 36 cents per share of COH was a whopping 47% below the year-ago profit of 68 cents per share.
The company cited the strong U.S. dollar as a core cause for its poor results, but some observers believe there’s more to it than that. Cantor analysts Laura Champine and Jason Smith feel Coach is simply still losing appeal — and market share — relative to its competition.
COH closed more than 6% lower on Tuesday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
