The bulls did everything they could do to get the market back into the black for the day, but try as they might, it just wasn’t in the cards. Even with decent industrial productivity and capacity utilization numbers in hand, the S&P 500 could only muster a modest loss of 0.29% on Tuesday. The index closed at 2,342.19.
It could have been worse though … you could have owned Harley-Davidson Inc (NYSE:HOG), Goldman Sachs Group Inc (NYSE:GS) or Cardinal Health Inc (NYSE:CAH). Those three names dished out the most pain today, as measured by the most market cap lost during the session.
Cardinal Health Inc (CAH)
Cardinal Health updated its 2017 guidance today, and the 11.5% pullback from CAH shares says investors are less than pleased with the outlook.
This morning, medical supply and pharmaceutical name Cardinal Health reported it would most likely post a profit at the lower end of previous 2017 earnings-per-share guidance of between $5.35 and $5.50. The company was already pushing its luck, with the analyst consensus of $5.42 per share. The caution just made it easier for CAH owners to assume the worst.
Fanning the bearish flames that burned CAH on Tuesday was an announcement that Cardinal Health would be acquiring the medical supply arm of Medtronic, for $6.1 billion. It’s a good fit with Cardinal’s exiting business lines, but an announcement from Standard & Poor’s that the purchase could prompt a potential downgrade of the company’s credit standing suggests Cardinal Health may be biting off more than it can chew.
Goldman Sachs Group Inc (GS)
While most banking stocks had a great first quarter, the same can’t be said so far for the nation’s top investment banks. Dow component Goldman Sachs Group said on Monday it earned $5.15 per share, falling well short of the $5.31 per share of GS analysts were expecting. Revenue of $8.03 billion also missed expectations of $8.45 billion. The most surprising element of the first-quarter report was the 6% decline in trading revenue. Bank of America Corp (NYSE:BAC) and its peers all saw significant increases in stock and bond trading revenue.
That said, Goldman didn’t do itself any favors to abate the sting of the earnings miss. Expenses were up, chipping away at already-thinning margins.
GS ended the day down 4.7%.
Harley-Davidson Inc (HOG)
Finally, all-American motorcycle maker Harley-Davidson may have exceeded its first-quarter earnings estimates, but it was a dubious honor. Revenue still fell by double-digits on a year-over-year basis, which was enough to send HOG shares to a loss of 4.2% for the session.
Last quarter, Harley-Davidson turned revenue of $1.33 billion into earnings of $1.05 per share. Analysts were only calling for a profit of $1.02 per share, but were also forecasting a top line of $1.37 billion. Worse, both the top and bottom line slumped on a year-over-year basis. The company earned $1.36 per share of HOG on sales of $1.58 billion in the first quarter of the previous year.
Investors may have been counting on an upward revision to 2017’s outlook, which they didn’t get.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.