For the second day in a row, U.S. stocks stalled after inching to new highs on Tuesday. When all was said and done, the S&P 500 ended the session at 2097.45, down 0.11% on another feeble-volume day.
Lethargy would have been preferable to the losses some names suffered on Thursday, however. Host Hotels and Resorts Inc. (NYSE:HST), SolarCity Corp. (NASDAQ:SCTY) and Dana Holding Corporation (NYSE:DAN) were among the worst of the worst today thanks to troubling quarterly numbers and/or troubling outlooks.
Though investors and analysts are split as to whether the details really matter or not, there’s no denying that SolarCity shares were down nearly 6% on Thursday thanks to disappointing quarterly numbers. Last quarter, solar panel and solar panel installation company SolarCity swung to a loss of four cents per share, versus a profit of 28 cents per share of SCTY stock in the same quarter a year earlier.
Still, revenue grew 52% to $71.8 million in the fourth quarter, and total installations (as measured by megawatts) were up 70% on a year-over-year basis. That’s why some analysts like Goldman Sachs’ Brian Lee aren’t deterred. Lee explains:
“Demand is not an issue…and neither is financing. For the third straight quarter, SolarCity posted 200MW+ of bookings, with 1Q15 quarter cited to be tracking toward a new record and implying an annualized run rate that is at the low end of 2015 MW guide, despite still being early into 2015. Just as importantly, funding capacity increased over 4X qoq (incl. loans) with the bulk of financing needs to achieve 2015 volume targets now in hand.”
Goldman Sachs still has a “buy” rating on SCTY stock, but the investment bank did lower its price target from $88 to $85 per share.
Host Hotels and Resorts (HST)
The good news: Host Hotels and Resorts topped its fourth-quarter earnings estimates. The bad news: Revenue fell short of expectations, and the hotel chain warned shareholders that its operating income in 2015 may roll in at levels lower than analysts had been expecting.
The specifics: In Q4 of 2014, Host Hotels and Resorts earned an operating profit (what it calls funds from operations, or FFO) of 40 cents per share, beating analyst estimates for a profit of 38 cents per share of HST stock. Revenue of $1.32 million for the quarter, however, was a tad less than the year-ago top line and a little shy of the analyst-expected total of $1.35 million.
The core of the reason HST stock tanked to the tune of 7%, however, stemmed from its current-year outlook. The company now foresees FFO of somewhere between $1.52 and $1.55 per share, shy of the earnings estimate of $1.64 analysts had collectively been expecting.
Dana Holding Corporation (DAN)
An exceedingly strong U.S. dollar has made yet another multinational company a victim. This time, it’s auto parts maker Dana Holding Corporation feeling the pain.
Last quarter’s numbers were adequate. The company reported that it had earned an operating profit of 53 cents per share of DAN stock, versus estimates of 48 cents. Revenue of $1.58 billion was slightly shy of the expected level of $1.62 billion.
The core of the reason DAN stock tumbled more than 3% on Thursday had little to do with last quarter’s results, however. The market is far more concerned with the warning Dana Holding Corporation issued with its full-year numbers. After negative currency exchange rates sapped last quarter’s revenue by more than $100 million, the company lowered its full-year 2015 profit outlook to a range of $2.05 to $2.15 per share. Analysts had been looking for a profit of $2.10 to $2.20 per share for the current year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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