A modestly bullish start to the new trading week didn’t end that way. After having some time to digest an alarmingly disappointing PMI reading for February — a sub-50 reading that suggests a contraction in the sector — traders sent stocks into the red for the day. The S&P 500‘s close of 1,932.23 was 0.81% lower than Friday’s close.
Endo International plc (ENDP)
Just judging from the headlines, one would expect Endo International to be up on Monday … or at least not down. The biopharma company topped its fourth-quarter earnings estimates, and revenues were in line with expectations.
One would be wrong, however. ENDP was down a whopping 21% today, on some unrelated news.
Last quarter, Endo International earned $1.36 per share on revenue of $1.07 billion. The bottom line was better than the anticipated income of $1.27 per share of ENDP, and sales rolled in as expected.
The good news was overshadowed by news that the company will be closing down its women’s health division next month after failing to find a buyer for the business.
The impact an outright closure will have on the value of ENDP shares is not yet clear, but it won’t be cheap.
Valeant Pharmaceuticals Intl Inc (VRX)
As if Valeant Pharmaceuticals wasn’t already in big trouble, the bearish flames scorching VRX shares were fanned further today for a trio of reasons.
First and not foremost, CEO Mike Pearson — who had been taking time off since late December for medical reasons — has returned to work as of today. A small faction of shareholders and observers were hypothetically wondering if VRX would be better off without his return.
One of Pearson’s first acts back at the helm raised the second red flag: He postponed the release of fourth-quarter earnings results, and withdrew the guidance previously offered for 2016.
Adding insult to injury, the company warned VRX shareholders that peer and competitor Allergan plc (AGN) was challenging Valeant Pharmaceuticals’ patent for irritable bowel drug Xifaxan.
VRX finished the session down more than 18%.
Southwestern Energy Company (SWN)
Last but not least, Southwestern Energy shares lost more than 9% of their value today, extending an 87% selloff that began back in early 2014, shortly before crude oil prices did the same.
The bulk of today’s selloff from SWN was the result of a downgrade by Raymond James. The brokerage firm now rates Southwestern Energy an “underperform,” following the downgrade of SWN to an “underperform” by Jefferies on Friday following the release of the energy company’s fourth-quarter results.
Southwestern topped estimates for a loss of four cents per share by “only” losing two cents per share, but revenue of $687 million fell well short of the expected $782 million for Q4. The company also served up a pretty disappointing operation outlook with its fourth-quarter results.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.