U.S. stocks had a day to forget Thursday as the telecommunications industry led to an overall decline in the market. The S&P 500 fell to 2,091.48 by day’s end, marking a 0.5% dip, while the Dow Jones Industrial Average, suffered a 0.6% loss.
Several companies posted financial results and updated their outlook in after hours, including Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), Starbucks Corporation (NASDAQ:SBUX) and Visa Inc (NYSE:V).
Here’s why all these stocks were in the red after the bell:
Alphabet Inc (GOOG, GOOGL)
Alphabet had an afternoon to forget as the company posted its fiscal first-quarter results.
Adjusted earnings for the tech giant’s most recent period came in at $7.50 per share. The Wall Street estimate called for EPS of $7.97. Alphabet’s quarterly revenue also missed expectations at $20.26 billion, compared to the $20.37 billion average that analysts projected. The losses were led in large part by the “Other Bets,” division, which sank from a $633 million loss in the year-ago period to $802 million in the red.
Currency exchange played a role in the Silicon Valley mammoth’s underwhelming results.
On a more positive note, Alphabet’s business segment exceeded expectations — $166 million in revenue versus analysts’ $140.7 million estimate.
Nonetheless, there were plenty of negative notes, and GOOG and GOOGL shares find themselves off 5% in premarket trading.
Starbucks Corporation (SBUX)
Earnings for Starbucks’ second quarter met analysts’ expectations, but lower-than-expected revenue hurt SBUX stock.
The 39 cents per share that the company posted in its winter months equaled the consensus estimate of 39 cents per share. The coffee chain’s revenue for the quarter totaled $4.99 billion, which fell short of the Wall Street average projection by $40 million.
Some analysts have chalked up the poor results to lousy weather in March.
Starbucks’ future plans to boost global revenue include expansion in China, where the restaurant will open 2,500 restaurants over the next five years.
Friday’s premarket trading shows SBUX stock off 4%, bringing it near both its 50-day and 200-day moving averages.
Visa Inc (V)
Visa’s quarterly report — which covers the period ending in March — was overall positive, but future projections hurt V shares ahead of Thursday’s action.
Its earnings were 71 cents per Class A share for the quarter — 4 cents higher than average Wall Street estimates. Revenue also came in ahead of expectations at $3.63 billion, surpassing analysts’ expectations of $3.6 billion for the quarter.
However, Visa disappointed with its projections for the current quarter. Visa is expecting falling crude oil prices, the recent dominance of the U.S. dollar and a number of other factors to weigh on results.
Global spending is expected to fall short of estimates for the credit card company.
V shares should follow SBUX and GOOGL lower, off about 4% on Friday morning.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.
