Despite a handful of less-than-encouraging earnings reports on Tuesday against a backdrop of slowing real estate price-growth, the market managed to work its way deeper into record-high territory. The S&P 500 ended the day up 0.29%, at 2,477.08, with energy stocks leading the way thanks to the 3.2% gain in oil prices.
A handful of names were pointed in the other direction though, in spades. Among the worst of the worst were Domino’s Pizza, Inc. (NYSE:DPZ), Interpublic Group of Companies Inc (NYSE:IPG) and Seagate Technology PLC (NASDAQ:STX), all down in response to earnings news.
Here’s what investors needs to know about each.
Seagate Technology PLC (STX)
Computer-tech company Seagate Technology didn’t just miss its fiscal fourth-quarter estimates. It missed them by a country mile, sending STX shares to a painful loss of 16.5% for the day.
For the quarter ending June, Seagate Technology turned revenue of $2.41 billion in a per-share profit of 65 cents. Problem: Analysts were expecting earnings of 98 cents and sales of $2.56 billion. The earnings figure was down slightly from year-ago levels, but worse, underscores some very uncomfortable volatility — mostly to the downside — of the company’s profitability in recent quarterly reports.
“Although the near-term dynamics of technology shifts present demand variations for the storage industry from time to time, we continue to see growing storage demand in the long-run driven by the proliferation of data growth from new technologies, emerging industries, and growing businesses.”
Of course, he can afford to be optimistic, as he’s about to be replaced by COO Dave Mosley.
Interpublic Group of Companies Inc (IPG)
STX wasn’t the only stock to get hit hard after an earnings shortfall. Interpublic Group of Companies botched its second-quarter numbers as well, and IPG owners paid a dear price for the miss.
In its second fiscal quarter, advertising outfit Interpublic Group turned a profit of 24 cents per share, down from the bottom line of 38 cents per share of IPG a year earlier, and falling short of the 34 cents analysts were calling for. Revenue fell from $1.92 billion in Q2 of 2016 to $1.88 billion this time around, versus estimates of $1.95 billion.
In all fairness, reaching record highs on Monday after a gain of more than 8% for the year, Interpublic Group of Companies shares made for an easy profit-taking target no matter what. Still, the 13.3% setback they suffered today speaks volumes about the market’s view of the company’s Q2 performance and prospects.
Domino’s Pizza, Inc. (DPZ)
Last but not least, unlike Interpublic Group and Seagate Technology, Domino’s Pizza topped its Q2 estimates. Just like IPG and STX though, DPZ shares fell anyway, giving up 10.1% thanks to disappointing international performance.
Last quarter, Domino’s Pizza earned $1.32 per share, well up from the prior Q2 profit of 98 cents per share, and topping the FactSet consensus of $1.23. Sales of $628.6 million were also well up on a year-over-year basis, and handily beat estimates of only $610.0 million.
The sore spot was its overseas business. Although international same-store sales grew a healthy 2.6%, the pros were looking for a 5% improvement. Non-U.S. markets are a key component of the company’s growth plan, and although the company said the weakness on that front can be fixed, investors aren’t taking any chances with the frothy stock.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
