Why Metlife Inc (MET), Nokia Corp (ADR) (NOK) and Tripadvisor Inc (TRIP) Are 3 of Today’s Worst Stocks

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It was another lethargic session for stocks on Thursday, with the market not supplying a lopsided dose of bullish or bearish earnings reports. Besides, most traders are now content just to sit tight until Friday morning’s employment report from the Bureau of Labor Statistics. The S&P 500‘s close of 2164.25 on Thursday was up a mere 0.02% from Wednesday’s last trade.

Why Metlife Inc (MET), Nokia Corp (ADR) (NOK) and Tripadvisor Inc (TRIP) Are 3 of Today's Worst StocksNot every stock was on the fence today, though. Metlife Inc (NYSE:MET), Nokia Corp (ADR) (NYSE:NOK) and Tripadvisor Inc (NASDAQ:TRIP) were all pretty well hammered following alarming Q2 announcements.

Here’s what traders need to know.

Metlife Inc (MET)

Insurer Metlife didn’t just miss its Q2 estimates. It poured salt in a gaping wound by announcing huge costs cuts that send up serious red flags.

Last quarter, Metlife earned an operating profit of 83 cents per share on revenue of $15.24 billion. The top line was down 2%, while the bottom line was down versus the year-ago profit of $1.56 per share of MET. Worse, income fell short of analyst estimates for earnings of $1.35 per share, and revenue of $17.26 billion.

Lower interest rates and weaker underwriting business were a key problem in the company’s second quarter.

The crux of the near-9% setback MET suffered on Thursday, however, stemmed from the cost-savings measure the insurer will implement. It aims to reduce $1 billion in annual costs by 2019, starting with job cuts. The move may boost the bottom line, though it may also crimp Metlife’s capacity to do business as it would like to.

Nokia Corp (ADR) (NOK)

Nokia may have met its earnings estimates for last quarter, and even touted a bigger-than-expected cost-savings from its merger with Alcatel. The market wasn’t impressed, however, sending NOK shares down 3.3%.

In its second fiscal quarter, the Finnish company posted an operating profit of 4 cents on revenue of $6.3 billion. Per-share earnings were in line with estimates, but the top line came up short of the expected $6.6 billion. Its mobile networks business was a particular sore spot for the quarter in question, and operating income was down almost 50%.

Nevertheless, Nokia sees the Alcatel deal bearing more fruit than first expected. Initially looking for €900 million in annual cost-savings opportunities, now the company believes it can save €1.2 billion per year by 2018.

Tripadvisor Inc (TRIP)

Last but not least, MET wasn’t the only stock to be tripped up by disappointing second-quarter results today. Travel-booking website Tripadvisor also saw its shares fall 8.5% in the wake of its Q2 earnings miss.

Last quarter, the company earned 38 cents per share on $391 million worth of revenue. Problem: The market was expecting a profit of 42 cents per share of TRIP and sales of $402.8 million. Earnings and sales also both fell on a year-over-year basis.

CFO Ernst Teunissen commented on the numbers:

“Our second quarter financial results reflect the reduced revenue growth and lower profit margin from significant investments we are making in pursuit of our key initiatives. While recent events cloud our near-term visibility, 2016 remains an important year as we navigate our way towards sustainable growth and profitability.”

Oppenheimer analyst Jed Kelly isn’t as optimistic though, noting:

“TRIP shares continue to show resiliency, but we believe the potential of increasing marketing investments to drive traffic and change user behavior could test the bulls’ patience.”

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/08/metlife-inc-met-nokia-corp-nok-tripadvisor-inc-trip-three-todays-worst-stocks/.

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