It wasn’t enough to drag the market back into profitable territory for the day, but the bulls did a pretty good job of closing the bulk of the gap. The S&P 500’s close of 2,347.22 was only 0.09% lower than Wednesday’s close, and well above the intraday low of 2,338.87. A solid housing starts and building permits report may have served as some of the buyers’ inspiration.
Owners of Avon Products, Inc. (NYSE:AVP), Kraft Heinz Co (NASDAQ:KHC) and MGM Resorts International (NYSE:MGM) weren’t able to sidestep the bulk of the bear’s attack though, as these three names were among the day’s worst performers.
Earnings reports did all of the damage.
MGM Resorts International (MGM)
Casino and resort operator MGM Resorts reported its fourth-quarter numbers on Thursday morning, and as far as MGM shareholders were concerned, the company blew it.
For the quarter ending in December, MGM Resorts International earned 4 cents per share on revenue of $2.69 billion. Both figures were an improvement on the year-ago comparisons, but missed estimates for earnings of 20 cents per share of MGM and sales of $2.46 billion. EBITDA also came up shy of expectations.
The company didn’t do nearly as well as it needed to do in the one place it needed a show of strength … Las Vegas. The industry’s equivalent to ‘same-store sales’ was only up 2% in the United States.
MGM shares ended the day down 9.3%.
Kraft Heinz Co (KHC)
MGM Resorts wasn’t the only name to be upended by its fourth-quarter numbers — Kraft Heinz took a hit after reporting its Q4 results. Unlike MGM though, KHC fell 4.2% on Thursday despite topping its earnings and revenue estimates. The prod for the pullback was the steep year-over-year revenue dip.
Last quarter, Kraft Heinz earned an operating profit of 91 cents per share on sales of $6.86 billion. The pros were only calling for a bottom line of 87 cents per share of KHC and revenue of $6.73 billion, but investors were largely counting on a better revenue ‘beat’ that would be closer to the year-ago sales tally of $7.12 billion. Investors are also increasingly worried the pairing of Kraft and Heinz back in 2015 isn’t yielding enough benefits fast enough.
Avon Products, Inc. (AVP)
Last but not least, Avon Products was one of the day’s biggest victims of disappointing fourth-quarter numbers. The cosmetics company earned 1 cent per share on revenue of $1.57 billion, falling short of the expected profit of 9 cents per share of AVP and top line of $1.61 billion. One of the key headwinds holding Avon Products back may simply be a lack of representatives, as the door-to-door, peer-to-peer approach loses its appeal.
The company still feels good about the three-year turnaround plan it took on early last year though, which includes $350 million in cost cuts as well as greater investment in technology. Shareholders don’t seem all that convinced the overhaul is taking hold though, sending AVP 18.6% lower for the day.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.