With a better-than-expected ADP payrolls figure rekindling uncertainty about when the next rate-hike might happen, stocks once again spent most of this week’s hump-day on the fence. By the time the closing bell rang, the S&P 500 Index was only up 0.31%, ending the session at 2163.79.
Here’s a closer look at what went wrong for each.
Pfizer Inc. (PFE)
At first glance one could chalk up today’s pullback from Pfizer to the fact that PFE went ex-dividend today. That is to say, the value of the quarterly dividend now payable to yesterday’s shareholders is deducted from the price of PFE stock.
The closer one looks at the math of the dividend though, the less it makes sense. Pfizer will be dishing out 30 cents per share to PFE owners on Sept. 1, but the stock was down 78 cents per share even though the pharmaceutical company posted second-quarter earnings and revenue that both topped expectations.
In simplest terms, PFE is in the hole to the tune of nearly 3% on Wednesday because earnings still dropped in Q2, and the company’s most important drugs like Lyrica and Ibrance didn’t make as much sales progress as shareholders would have liked to seen.
It may be an omen of tepid growth.
Kate Spade & Co (KATE)
Fashion name Kate Spade punished investors on Tuesday, with KATE shares plunging more than 18% after coming up short of profit estimates and then lowering its full-year guidance.
Actually, the results weren’t bad on a year-over-year basis. Profits of eleven cents per share — or net income of $27 million — on revenue of $320 million were both higher than the year-ago quarter. That per-share profit, however, missed estimates of 14 cents per share, underscoring fears many investors of retail stocks have been facing of late.
Fanning the bearish flames that scorched KATE shares on Wednesday was its revised 2016 guidance. Rather than expected profits of 70 to 80 cents per share, the company now anticipates earnings of only between 63 and 70 cents.
Sales are likely to roll in between $1.37 billion and $1.40 billion, versus a prior outlook of between $1.39 billion and $1.41 billion.
Cray Inc. (CRAY)
Last but not least, supercomputing outfit Cray crushed its shareholders on Wednesday with 30% plunge following a Q2 loss that was far bigger than anticipated.
Last quarter, Cray booked a loss of 29 cents per share — down from a profit of 14 cents per share of CRAY a year earlier — on sales of $100.2 million. Analysts were only looking for a loss of 25 cents per share and revenue of $102 million.
The company drove $186.2 million worth of revenue in the same quarter a year earlier.
Cray now expects to generate $650 million in revenue for 2016, down from 2015’s top line of $725 million. Analysts were at one point expecting sales of $795 million this year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.