With the Federal Reserve acknowledging the economy was less than great in the first quarter, and considering some horrifyingly bearish reactions to a handful of earnings reports, it’s a miracle the S&P 500 only lost 0.13% of its value on Wednesday. In fact, the close of 2,388.13 still leaves the index well above its most critical technical floors.
Not every stock escaped the bears’ clutches on Wednesday though. Twilio Inc (NYSE:TWLO), Sprint Corp (NYSE:S) and Akamai Technologies, Inc. (NASDAQ:AKAM) were each crushed in the wake of disappointing earnings and equally disappointing outlooks.
Akamai Technologies, Inc. (AKAM)
The good news is, Akamai Technologies topped its first-quarter sales and earnings estimates. The bad news is, the cloud and app service provider served up guidance for the current quarter that was nothing less than terrifying.
For its first fiscal quarter ending in March, Akamai turned $609.2 million worth of revenue into an operating profit of 69 cents per share. Analysts were only calling for earnings of 67 cents per share of AKAM and sales of $604.9 million.
That wasn’t enough to soothe shareholders though, who were spooked by the Q2 outlook. Akamai is anticipating sales of between $597 million and $609 million, translating into earnings of between 59 and 51 cents per share. Analysts were modeling a profit of 65 cents per share, on average and sales of $623 million.
AKAM ended the day with a loss of 15.5%.
Sprint Corp (S)
Akamai wasn’t the only name to be upended by an earnings report on Wednesday. Wireless carrier Sprint served up its fiscal fourth-quarter numbers this morning, and though the initial response wasn’t bad, it didn’t take long for the bearish train to get rolling.
The numbers, with just a quick glance, weren’t bad. Though the loss of seven cents per share of S fell short of the expected loss of 4 cents, revenue of $8.5 billion was much stronger than the forecasted $7.93 billion. The figures topped off a year that saw revenue for the first time in three years. All told, Sprint added 930,000 postpaid subscribers in fiscal 2016, easily outpacing the subscriber growth mustered by the industry’s bigger names.
So why the 14.3% setback for S stock today? The earnings miss didn’t help, but perhaps investors are most concerned about the fact that a merger isn’t as close or as likely as had been recently suspected.
Twilio Inc (TWLO)
Finally, if you thought AKAM and S shareholders had it rough on Wednesday, you haven’t seen anything yet. Shares of cloud-based communications specialist Twilio fell a stunning 26.3% after the company issued revised Q2 guidance.
Last quarter, Twilio lost 4 cents per share versus analyst estimates for a loss of 6 cents per share of TWLO. And, revenue of $87.4 million topped expectations of only $83.6 million. The beats were made irrelevant, though, after the company also whittled down its full-year profitability outlook. Twilio is now anticipating a loss of between 27 and 30 cents per share of TWLO, versus analyst estimates of 16 cents. The company’s revenue outlook is also less than analysts had modeled.
The crux of the reason Twilio isn’t going to fare as well as initially hoped stems from the fact that ride-hailing service Uber — one of Twilio’s biggest customers — is going to be using the communications platform less and less going forward.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.