Still searching for direction, stocks spent equal amounts of time in the red and in the black today. When all was said and done, however, the S&P 500 finished the day at 2,075.00, down 0.32%.
For some stocks, though, it was anything but a mild day. Apache Corporation (NYSE:APA), Horizon Pharma PLC (NASDAQ:HZNP) and Macy’s, Inc. (NYSE:M) all lost big-time, though for understandable reasons. Here’s what happened.
Macy’s, Inc. (M)
It’s not exactly a big secret that department store chain Macy’s has been struggling of late, posting two consecutive (three, as of today’s news) quarters of falling per-share earnings. But, the extent of the headwind wasn’t fully appreciated by M investors until today, when the stock plunged a jaw-dropping 14%.
Despite the earnings beat, last quarter’s revenue for Macy’s missed analyst estimates of $6.15 billion, rolling in at $5.87 billion instead. Both the top and bottom lines were down from year-ago levels, and same-store sales fell 3.6%.
The killer, however, was the revised full-year earnings outlook. Now the company expects to report a profit of between $4.20 and $4.30 per share of M, versus prior estimates of $4.70 to $4.80 per share.
M shares are now down more than 40% since July’s peak, underscoring how quickly doubts about the company’s future have grown.
Apache Corporation (APA)
Just for the record, Wednesday was miserable for the entire energy sector, with oil prices falling about 3%. Apache Corporation shares led the bearish charge, however, with APA giving up more than 7% of its value for reasons in addition to crude oil’s pullback.
Long story made short, Anadarko Petroleum Corporation (NYSE:APC) was interested in acquiring Apache as part of an effort to share costs within an energy sector that desperately needs some consolidation. Apache, however, didn’t like the offer per-share APA made, and told the suitor so.
They were likely expecting a raised offer as part of a game of hard-to-get, but Anadarko simply withdrew the offer altogether, somewhat blindsiding APA owners.
Horizon Pharma PLC (HZNP)
Last but not least, Horizon Pharma fell 20% today after it was dealt an indirect blow from pharmacy benefits manager Express Scripts Holding Company (NASDAQ:ESRX).
That blow? Express Scripts no longer has a formal relationship with Linden Care Pharmacy, which provided volume-based price breaks to the former and customer flow to the latter. It matters to Horizon Pharma and HZNP investors simply because Linden Care Pharmacy is a major distributor of Horizon Pharma drugs, and in some cases the only provider … an arrangement that lends itself to the possible price-gouging that has widely come under fire of late.
Though not specifically referenced by Express Scripts Holding when telling the market of its decision, there’s little doubt that the recent saga of Valeant Pharmaceuticals Intl. Inc. (NYSE:VRX) and its too-close ties with pharmacy company Philidor had a great deal to do with the severing of the relationship between Express Scripts Holding Company and Linden Care Pharmacy.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
