Wednesday was a light news day, leading to pretty unremarkable day for the market. When all was said and done, the NASDAQ Composite made a tiny bit of bullish progress, while the S&P 500 basically broke even for the day with a close of 2068.53, thanks to an afternoon recovery.
That’s not to say every stock was untouched, though. AOL, Inc. (NYSE:AOL), Penske Automotive Group, Inc. (NYSE:PAG) and Aramark (NYSE:ARMK) all performed particularly bearishly today thanks to ugly earnings results and outlooks.
In the words of outspoken stock guru Jim Cramer, the fourth quarter results for web company AOL weren’t “just terrible” — they were “ridiculously bad.”
AOL managed to beat earnings estimates of 72 cents per share by posting a profit of 92 cents per share of AOL stock. Revenue of $710 million, however, was shy of the expected $721 million. Both figures were better than the year-ago revenue of $679 million and profit of 64 cents per share. Traders just couldn’t look past the revenue miss, though.
The death blow may have been the 2015 plan AOL announced along with its fourth-quarter earnings numbers. AOL reported that it’s looking to restructure itself this year, putting more focus on automated ad sales and less on human interactions … a maneuver that is expected to drive a sizable decline in display ad revenue for the first half of 2015.
Displeased investors sent AOL stock lower by more than 10% on the news.
Penske Automotive Group (PAG)
Apparently a 21% improvement in year-over-year income still wasn’t good enough for shareholders of Penske Automotive Group.
PAG stock fell more than 7% on Wednesday despite the company’s record-breaking results achieved in the fourth quarter of 2014. Penske Automotive Group posted a per-share profit of 79 cents for the final quarter of 2014, versus a year-ago bottom line of 68 cents per share. Problem: Analysts were expecting a profit of 80 cents per share of PAG stock.
Revenue of $4.41 billion in the fourth quarter of 2014 beat estimates of $4.37 billion, and just trounced the year-ago revenue figure of $3.86 billion. But, the market couldn’t get past the earnings shortfall.
Last quarter, catering and uniform company Aramark fell short of Wall Street’s expectations. The company converted $3.7 billion worth of revenue into an adjusted per-share profit of 47 cents. Analysts, however, were looking for a top line of $3.84 billion and a bottom line of 49 cents per share of ARMK stock.
The latest quarter’s numbers also looked worse than the numbers achieved in the final quarter of 2013. Aramark posted a profit of 52 cents per share then, on $3.76 billion in revenue,
Things aren’t expected to get significantly better any time soon either. A strong U.S. dollar is crimping overseas sales.
All told, ARMK stock tumbled more than 3% today.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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