The market may have logged a fourth straight day of gains following the initial Brexit-prompted pullback, but there’s no denying today’s gain was notably weaker than the prior three had been. The S&P 500‘s close of 2,102.95 was only 0.19% better than Thursday’s close.
And some stocks missed out on the marketwide gain altogether. Micron Technology, Inc. (NASDAQ:MU), Humana Inc (NYSE:HUM) and Williams Companies Inc (NYSE:WMB) each ended the day in the red, though for understandable reasons.
Micron Technology, Inc. (MU)
Micron may have gone on a buying spree in recent quarters, but it doesn’t look like those acquisitions are paying off yet. The company posted disappointing Q3 results on Friday, and offered similarly disappointing Q4 guidance, sending MU shares down a hefty 9%.
Last fiscal quarter, Micron lost eight cents per share on sales of $2.9 billion. The bottom line was better than the expected loss of nine cents per share of MU, but the top line fell short of the projected $2.96 billion.
Either way, revenue fell 25% on a year-over-year basis, and the loss widened from the five-cent loss per share booked in the same quarter a year earlier.
Fanning the bearish flames for MU today was the fourth-quarter outlook. The company now expects to report sales of between $2.9 billion and $3.2 billion, versus an average analyst estimate of $3.2 billion. Micron also expects to swing to a big loss for its fiscal fourth quarter.
Williams Companies Inc (WMB)
There’s dissension in the ranks of Williams Companies following the failed merger with Energy Transfer Equity LP (NYSE:ETE).
It’s a drama that not even a John Grisham novel could have scripted. Two years after committing to it and one year after trying to get out of it, Energy Transfer Equity successfully got out of its contract to unite with peer and rival Williams Companies. The next day, some of Williams’ board moved to remove CEO Alan Armstrong from his post, mostly (though not officially) as punishment for not getting done what have been a lucrative deal.
When it was all said and done though, the majority of the 13-member Board of Directors voted to leave Anderson at the helm. With weirdness clearly on the table going forward, six of thirteen board members — mostly those who wanted Anderson ousted — resigned from the board themselves.
While a clean slate may ultimately be a good thing for the company, the mass exodus is also disruptive, pulling WMB down 5% for the session.
Humana Inc (HUM)
Last but not least, Humana shares dropped more than 3% on Friday, but not because of anything Humana did. Rather, the market took the hint offered by the abandoned merger of Anthem Inc (NYSE:ANTM) and Cigna Corporation (NYSE:CI).
In short, rather than fight an antitrust battle the two companies increasingly think they can’t win, it seems both parties would rather not even bother trying.
Elevation merger analyst Ira Gorsky explains:
“The way that it seems to me is that both Anthem and Cigna are realizing that there is no path to negotiations. There isn’t going to be a negotiated settlement. It’s in their interest to break as quickly as possible and then get some sort of termination fee.”
Inasmuch as Humana would face a similar headwind with any future mergers it may attempt, the prospects for scale-ups just shriveled a bit today for the entire health plan industry.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
