It took a while to get the ball rolling today, but once investors had a chance to fully digest just how strong October’s retail sales growth was, they jumped on board. The S&P 500‘s close of 2,180.39 was 0.75% better than Monday’s close, and leaves the index within sight of an all-time high.
The rally didn’t round up every name though. Home Depot Inc (NYSE:HD), Nokia Corp (ADR) (NYSE:NOK) and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) weren’t invited to the bullish party, as each company gave shareholders good reason to be concerned.
Teva Pharmaceutical Industries Ltd (ADR) (TEVA)
Given the biopharma company’s guidance, one wouldn’t be surprised if Teva Pharmaceutical was up today. It wasn’t up though. Despite the encouraging outlook, TEVA stock was off 8.4%.
Teva expects to report a profit of between $1.34 and $1.44 per share for the quarter currently underway, versus average estimates of $1.42 per share. The company also expects to post revenue of between $6.2 billion and $6.5 billion for the fourth quarter.
Analysts expect, on average, a top line of $6.48 billion. All of those numbers are better than the profit of $1.28 per share and revenue of $4.88 billion the company posted in the same quarter a year earlier.
But, those encouraging numbers are tough for TEVA shareholders to trust in light of its third quarter results. The pros were expecting earnings of $1.28 per share and revenue of $5.71 billion. The company topped profit estimates with earnings of $1.31 per share, but the top line fell short, rolling in at only $5.56 billion.
Nokia Corp (ADR) (NOK)
Whereas Teva took on water despite a compelling outlook, Finnish telecom technology company Nokia was hit hard on Tuesday because of a lackluster fourth quarter outlook.
Not in conjunction with any quarterly report, Nokia warned NOK shareholders today that it expects the networking market to shrink on the order of 2% next year. It’s not a massive contraction, but Nokia has already been facing a brisk headwind. Worse, the networking market isn’t going to grow much anytime soon. The company is only expecting roughly 1% annual growth through 2021.
Nokia is cutting costs in the meantime, aiming to save $1.3 billion by year by 2018. The 3.9% plunge NOK shares suffered on Tuesday, though, says the market doesn’t think it’s going to be enough.
Home Depot Inc (HD)
Last but not least, Home Depot earned a spot on the daily “worst three” list much for the same reason TEVA and NOK were hit so hard — the company doesn’t think its near-term future is quite as promising as the market does … or did.
The company easily topped earnings estimates, and left its year-ago profit per share figure in the dust. Better still, the home improvement retailer actually upped its full-year profit guidance from $6.27 per share of HD to $6.31 per share.
The problem is that analysts had projected a profit of $6.33 per share for 2016, suggesting those pros were counting on a more bullish revision. That may have contributed to the 2.5% stumble HD took on Tuesday.
Sales growth seems to be slowing down as well, on pace to roll in at less than the usual 20% growth rate investors have become accustomed to.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
