Despite the bullish start to Friday’s trading on the heels of a better-than-expected GDP growth rate for the fourth quarter, the bulls just couldn’t hang on. The S&P 500 finished the day at 1,948.05, down 0.19%. Still, it finished the week measurably higher compared to the prior week’s close.
Holding the market back today more than any other names were Goldcorp Inc. (USA) (NYSE:GG), American Water Works Company Inc. (NYSE:AWK) and Foot Locker, Inc. (NYSE:FL). Here’s what investors need to know about them.
Goldcorp Inc. (USA) (GG)
In the grand scheme of things, it can’t be too surprising that any gold miner struggled last quarter. Despite the fact that gold prices are up 12% year-to-date, they’re still down more than 30% from their late-2012 peak. Nevertheless, gold miner Goldcorp caught GG shareholders off guard last night when it reported a loss that was much bigger than expected and poured salt in the wound by finally cutting its dividend.
Although revenue grew 28% last quarter, reaching $1.07 billion, the loss of 15 cents per share missed estimates for a profit of one cent per share of GG by a country mile. Even stripping out a one-time expense, operating profits per share rolled in at a loss of three cents.
Planning on lower output this year, the mining company lowered its dividend to only two cents per share per quarter this year, down from six cents per share last year.
GG ended the day down nearly 13%.
American Water Works Company Inc. (AWK)
Although no one seems to doubt it has a very bright future, between the earnings miss posted yesterday and an extreme valuation that leaves no room for error, American Water Works Company was downgraded today, sending AWK shares nearly 5% lower.
After topping earnings estimates in seven of its past eight quarters, analysts figured a beat of last quarter’s earnings projection of 57 cents per share was a done deal. Analysts, however, were wrong. The company only earned 55 cents per share, and worse, the top line of $783 million missed expectations for $788.3 million.
Janney Montgomery Scott analyst Michael Gaugler saw it as the perfect prompt for a downgrade of what had become expensive AWK shares. Gaugler now it deems the stock as “neutral” rather than a “buy,” saying:
“The shares have performed well in recent years, riding a wave of higher earnings, expanding P/E multiples, and a tailwind from decreasing 10 Year T-Note yields.”
Foot Locker, Inc. (FL)
Finally, although it was positioned to end the week on a bullish note following the release of last quarter’s earnings this morning, Foot Locker ended up getting upended early on in the session after a lackluster February sales outlook.
In the fourth quarter of 2015, Foot Locker earned $1.16 per share on a top line of $2.01 billion. Both were up compared to year-ago numbers, by 16% and 5%, respectively. Both also topped analyst estimates for a profit of $1.12 per share of FL and revenue of $2 billion.
It wasn’t enough to stave off more than a 4% pullback from FL shares on Friday, however, as the company reported during today’s conference call that February’s same-store sales rate could fall.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
