Picking up where they left off on Monday, the bulls stampeded today. The S&P 500’s close of 2084.39 was 1.25% better than Monday’s close, and above a key technical line in the sand. The volume behind the advance, however, was notably anemic.
Either way, a handful of stocks were suspiciously left out of the rally. Among the biggest losers today were Nokia Corp (NYSE:NOK), Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) and SolarCity Corp (NASDAQ:SCTY). Here’s the deal.
Nokia Corp (NOK)
Nokia’s first-quarter numbers — after it united with Alcatel-Lucent (ALU) — were a bit of a letdown, as expenses associated with the pairing rolled in greater than expected and the company warned NOK shareholders that 2016’s numbers may not be as hot as first anticipated.
In its first quarter, Nokia lost 613 million euros on revenue of 5.6 billion euros. Stripping out the costs of the merger, the telecom company managed to eke out a profit of 139 million euros, but that still fell short of the 237-million-euro profit analysts were calling for, on 5.73 billion euros in sales. On a pro forma basis, sales fell 9%.
While the disappointing number forced some shareholders to question the actual upside of the merger, the bulk of the 6% setback NOK shares suffered today may have stemmed from the company’s full-year outlook. Without offering any specifics, CEO Rajeev Suri said the environment remains “challenging” and that 2016 would be a “year of transition.”
Norwegian Cruise Line Holdings Ltd (NCLH)
NOK wasn’t the only stock to be up-ended by disappointing first-quarter numbers and an equally disappointing outlook today. Norwegian Cruise Line Holdings Ltd hit the same wall, sending NCLH shares lower to the tune of 5%.
Last quarter, Norwegian Cruise Line Holdings earned 38 cents per share on $1.08 billion in revenue. The bottom line was in line with analyst estimates, but the timeline misses expectations of $1.1 billion. The real trouble for NCLH shares, however, stemmed from the second-quarter outlook. The cruise line now expects to report a Q2 profit of 80-85 cents, versus analyst estimates of 97 cents per share of NCLH.
SolarCity Corp (SCTY)
Last, but not least, already on the defensive, the Q1 report from SolarCity posted after the close on Monday was even worse than expected.
The $123 million worth of revenue SolarCity reported for its recently-completed first quarter was up 82% on a year-over-year basis, and handily topped the expected $108.4 million. On the flip side, the loss of $2.56 per share was much worse than the year-ago loss of $1.53 per share of SCTY, and well beyond the loss of $2.31 pros had been modeling. Bookings fell 33% in Q1.
The real killer, however, is the distinct possibility that SolarCity is fighting a fiscal battle it can’t win. The company reeled in its installation guidance for 2016 from 1.25 gigawatts to no more than 1.1 gigawatts, and added that projected losses for the current quarter are $2.70-$2.80 per share of SCTY. Analysts had been expecting a loss of $2.13.
“This is a company that I regard in a first-class crisis that acts as if everything is fine… You know I’m an aficionado of conference calls. You may have found the bottom. Yes, [this is] the worst conference call of 2016.”
SCTY ended the session down a jaw-dropping 21%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.