After a wobbly start on Friday, stocks finally got some traction. Partially fueled by the acceptance of a revised Greek debt plan and partially fueled by progressive manufacturing data for the United States, the S&P 500 finished Friday with a 0.39% gain, closing at 2,091.54.
It wasn’t a winning day for all stocks, however. Viacom, Inc. (NASDAQ:VIAB), King Digital Entertainment PLC (NYSE:KING) and Aspen Technology, Inc. (NASDAQ:AZPN) lost a good deal of ground. Here’s why.
Viacom (VIAB)
For the better part of this, week it looked like shares of TV show and film-making company Viacom might rebound after last week’s devastating tumble. VIAB lost 20% of its value in just two days last week on the heels of a 10.6% plunge in the company’s third-quarter revenue.
As it turns out, however, the bears weren’t done beating VIAB down just yet. The stock lost another 4.6% today after the market had some more time to think about it, and after the sellers had time to regroup.
Of course, the bears had a little help deciding Viacom still had farther to fall when it learned Bernstein analyst Todd Juenger was concerned that DISH Network Corp. (NASDAQ:DISH) may not renew its contract to offer Viacom-owned cable channels MTV and Nickelodeon.
King Digital Entertainment (KING)
King Digital Entertainment — the maker of popular online games Candy Crush Saga and Candy Crush Soda Saga — saw its shares get crushed themselves today after posting alarming Q2 results.
Although earnings of 49 cents per share topped estimates for a profit of 43 cents per share of KING, revenue of $490 missed estimates of $526 million, and sales were off nearly 16% on a year-over-year basis. Per-share earnings fell 17%.
The reality of seeing those numbers in print may have upset traders more than they realized was possible, given the fact the both the top and line and the bottom line were better than expected. The proverbial nail in the coffin, however, may have been driven in by other metrics. Namely, interest in the three-year-old Candy Crush Saga continues to fade.
KING closed 11% lower today.
Aspen Technology (AZPN)
Last but not least, optimization-software specialist Aspen Technology may have topped its fiscal fourth-quarter earnings estimates, but it wasn’t enough to offset the bearish response to its lowered revenue guidance.
All told, Aspen Technology earned 39 cents per share on revenue of $114.2 million last quarter. Both figures were better than expected. The pros were only modeling a profit of 34 cents per share of AZPN on a top line of $112.1 million. Yet the company also lowered its revenue outlook for the current year, from a range of $470 million and $478 million to a range of $465 million to $473 million. Analysts had been modeling an average top line of $474.9 million for the current year.
Concerned the lowered guidance may stem from problems that could get worse before they get better, the market sent AZPN down a painful 10%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
