Despite the bearish start to the day and a distinct lack of bullish catalysts, buyers managed to turn a loser into a winner on Thursday. The S&P 500 finished the day at 1993.4, up 0.35%, and further into new multi-week high territory.
It wasn’t a winning day for all stocks, though. The Kroger Co (NYSE:KR), Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Ciena Corporation (NYSE:CIEN) each lost more than their fair share of ground. Here’s what investors need to know about these setbacks.
The Kroger Co (KR)
Kroger may have topped its Q4 earnings estimates, but that was the only good news the grocer had for KR investors on Thursday. Last quarter, The Kroger Co earned 57 cents per share on revenue of $26.17 billion. The bottom line was better than the profit of 54 cents per share of KR analysts were expecting, but the top line fell short of the anticipated $26.19 billion.
The bulk of the 7% setback KR suffered today, however, stemmed from the company’s 2016 outlook. Citing tepid inflation rates, Kroger predicted it would only see sales grow between 2.5%-3.5% this year, versus 5% growth for last year.
Ciena Corporation (CIEN)
Kroger wasn’t the only name to be up-ended by a lackluster outlook on Thursday. Communication technology company Ciena also trumped its own success in the previous quarter with a less-than-thrilling expectation for the current quarter.
Last quarter — its first fiscal quarter of 2016 — Ciena Corporation earned an operating profit of 18 cents per share, handily topping the profit of 14 cents per share of CIEN analysts were collectively expecting. Sales of $573.1 million fell a bit short of the expected $575.2 million, but were close enough to satisfy most investors by virtue of the top line’s 8% improvement.
For the second quarter of 2016 (currently underway), Ciena reported it was expecting revenue of $615 million-$645 million, pushing the limits of the $646.3 million the pros were calling for.
CIEN ended the day down 18%.
Valeant Pharmaceuticals Intl Inc (VRX)
Last, but not least, and for the second time this week, Valeant Pharmaceuticals has earned a spot on the “Worst 3” list.
The key prod for the 4% pullback from VRX on Thursday was news that Vice President Deb Jorn had resigned. Valeant Pharmaceuticals made a point of saying it had not asked Jorn to leave, and that she was leaving for personal reasons. But, the fact that the company felt the need to make such a comment at all was a red flag in investors’ eyes, especially in light of all the publicity/leadership/regulatory issues it’s now facing.
Fanning the bearish flames for Valeant Pharmaceuticals was the likelihood that the company’s core drugs, Jublia and Xifaxan, are both about to face a serious headwind.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
