Another sharp tumble in the value of the U.S. dollar sent most everything else up sharply higher today, including oil, gold, and stocks. The S&P 500 jumped 0.9% to close at 2,108.13, while crude gained nearly 2% to finish the day at $46.43 per barrel. The nice gain for the week also snapped a three-week losing streak for stocks.
Not every ticker was jumping for joy on Friday, however. Tiffany & Co. (NYSE:TIF), AK Steel Holding Corporation (NYSE:AKS) and Theravance Inc (NASDAQ:THRX) all dipped into the red ink… two of them for the same reason.
Tiffany & Co. (TIF)
The brakes the Federal Reserve finally applied to an overheating U.S. dollar was too little and too late to salvage the current quarter for Tiffany & Co. The jeweler reported it expects earnings for the quarter ending in April to shrink 30% on a year-over-year basis.
It’s an unusual sign of weakness from the usually-strong retailer, but not one that’s difficult to believe in light of its fourth-quarter results. Although the company met earnings estimates of $1.51 per share of TIF stock and improved sales by 3% when discounting the impact of adverse exchange rates, total sales actually fell 1% in the fourth quarter thanks to an abnormally strong U.S. dollar.
Tiffany & Co. only expects the second quarter of the current fiscal year to be marginally easier than the first.
TIF finished the day down 4%.
Theravance (THRX)
An FDA advisory panel basically liked the Breo Ellipta once-daily asthma treatment and inhaler made by Theravance and GlaxoSmithKline plc (ADR) (NYSE:GSK).
They just didn’t like it for as many asthma sufferers as and Theravance were hoping.
The Food and Drug Administration’s advisory panel recommended the FDA approve the Breo Ellipta for asthma patients over the age of 18. The same panel, however, did not see enough medical benefit in the device for asthma sufferers between the age of 12 and 17.
THRX shares fell more than 5% on the news. Although both companies were hoping for wider approved usage, Theravance had much more at stake with the inhaler than GlaxoSmithKline did.
AK Steel Holding Corporation (AKS)
TIF wasn’t the only stock sent back-pedaling today thanks to a painfully strong U.S. dollar. Shares of AK Steel Holding fell more than 3% as well, following the company’s Q1 guidance announcement this morning.
As of the latest look, the steel company expects to report a loss of between 23 and 28 cents per share of AKS, reflecting a 14% decline total shipments made in the final quarter of last year.
The strong dollar is making it cheaper for U.S. steel buyers to import it from China rather than buy it from domestic providers. Simultaneously, the strong dollar makes it more expensive for foreign buyers to purchase steel from AK Steel Holding. It’s not a new problem, per se — AKS shares are down more than 60% since September’s peak, reflecting a massive run-up in the value of the greenback. But, with no end in sight, steelmakers are becoming understandably restless.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
