With nothing decidedly bullish to latch onto, investors were content to let the market slide lower for a third consecutive day. The S&P 500’s 0.22% dip left it at a close of 2,093.32, which is also back below some of its key short-term moving average lines.
Leading that bearish charge were Shire PLC (NASDAQ:SHPG), Allstate Corp. (NYSE:ALL) and Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH). Here’s where each company went wrong.
Shire PLC (SHPG)
The management crew and board of Irish drugmaker Shire PLC may have good reasons to want competing drug company Baxalta (NYSE:BXLT). But judging from 5.4% plunge SHPG shares dished out on Tuesday, investors aren’t pleased with how they’re going about making the deal happen.
Whereas most of the recent unions with the world of biopharma were negotiated deals, Shire put a hostile bid approach into motion, offering $30 billion for Baxalta. While the inflammatory disease treatment known as Cinryze along with the rest of the Baxalta portfolio may well be worth the price SHPG is offering, the market either thinks it’s too high a price, or that Shire made a mistake that could ultimately cost it more, now that BXLT shareholders have put up their defenses.
Allstate (ALL)
Customers may be in good hands with insurer Allstate, but its investors certainly aren’t. ALL shares plunged more than 10% on Tuesday after the company posted disappointing second-quarter numbers.
When all was said and done, Allstate earned an operating profit of 63 cents per share last quarter on $8.98 billion in revenue. Revenue trounced expectations of $7.91 billion, but analysts were expecting to see a profit of 97 cents per share of ALL stock. The company posted a profit of $1.39 per share in the same quarter of 2014.
The prod for the sharp drop in earnings? More car crashes. CEO Thomas Wilson explained:
“Our second quarter operating income of $262 million was lower than last year, reflecting increased frequency and severity of auto accidents. The increase in auto accidents is broad-based by state, risk class, rating plans and the maturity of the business, and consequently appears to be driven by external factors.”
The insurer said it aims to raise rates to better reflect its actual payout needs.
Norwegian Cruise Line Holdings (NCLH)
Finally, though Norwegian Cruise Line Holdings aced last quarter’s earnings estimates and offered guidance that was right in line with expectations, it just wasn’t enough to distract investors from NCLH falling short of revenue estimates for its second quarter of 2015. The end result was a 4% tumble from NCLH.
The specifics: Per-share earnings of 75 cents for Q2 was better than the profit of 74 cents per share of NCLH analysts were expecting. But those same analysts were looking for a top line of $1.1 billion, and the company only reported revenue of $1.09 billion.
The third quarter’s and full year’s earnings guidance was right in line with estimates, but after a year-to-date rally of 32% for NCLH, expectations of perfection were likely priced in.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
