Wednesday’s bullish response to an encouraging stance from the Fed was already out of gas by Thursday, as stocks struggled just to hold the ground they gained then. By the time the closing bell rang, the S&P 500 was down 0.05%, ending session at 2,089.41.
Goldcorp Inc. (NYSE:GG), Twitter Inc. (NYSE:TWTR) and NXP Semiconductors NV (NASDAQ:NXPI), though, didn’t even come close to dishing out any gains today. Here’s what went wrong.
Goldcorp Inc. (GG)
If you thought Thursday was rough for gold prices, take a look at what happened to gold miners. Their stocks were outright crushed, lead by industry icon Goldcorp.
Gold futures tumbled 2.5% today despite the U.S. dollar’s pullback, leaving the precious metal near a closing price of $1,146 per ounce. In that their profitability is impacted (in a leveraged way) by the price of gold, gold miners as a group fell 4.7%. Goldcorp was the ringleader, with GG shares losing 10% of their value.
Fanning the bearish flames for GG, however, was a surprisingly disappointing third quarter report from Goldcorp posted Thursday morning. Although revenue of $1.1 billion was a tad better than the anticipated figure of $1.05 billion, the loss of four cents per share of GG blindsided investors, whowere looking for a profit of four cents per share.
Twitter Inc (TWTR)
It’s no longer “news,” in that the warning was unveiled on Tuesday. But, the market is still digesting the fourth-quarter figures projected by Twitter … and it doesn’t like the taste.
As was noted on Tuesday, Twitter is now looking for a top line of between $695 million and $710 million for Q4, coming up well short of the $741 million analysts were expecting for TWTR. The 6% slide from TWTR today, though, may stem from the still-unfurling realization that Twitter may never actually be able to grow and thrive beyond what it is right now.
Ben Thompson, author of the Stratechery newsletter, may have summed up the core of the impasse best by saying of the warning:
“This…is really bad. Not only did the Twitter product stagnate for years, it seems that the company built the wrong sort of ads business [network ads] as well. … I suspect the company quickly gave up and renewed its focus on direct sales-driven brand marketing. However, when it comes to Twitter’s long-term sustainability, giving up isn’t really an option: I wouldn’t be surprised if Twitter is plunging back in to a heavy focus on direct response ads and it willing to take the revenue hit that will come as they figure the format out.”
NXP Semiconductors NV (NXPI)
Goldcorp and Twitter weren’t the only names to get bitten by the earnings bug on Thursday. NXP Semiconductors also took a huge hit after reporting mixed Q3 results and offering up lackluster guidance on Wednesday evening.
Earnings were more than satisfactory. NXP Semiconductors earned $1.57 per share versus estimates for a profit of only $1.49 per share of NXPI. Sales of $1.52 billion, however, fell just a bit short of the $1.5 billion analysts were looking for.
It was the fourth-quarter outlook that likely drove the bulk of the 20% plunge NXPI suffered today. The company now expects Q4 revenue to be down by a “low to upper-teens percentage,” where analysts had been calling for at least modest growth.
The demise of NXP Semiconductors also took down Freescale Semiconductor Ltd (NYSE:FSL), as NXP Semiconductors is waiting on regulatory approval to acquire Freescale in a deal that will be funded by a fair amount of NXPI stock.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
