A heavy dose of earnings news from last night and this morning didn’t take an immediate toll on stocks, but when push came to shove as the closing bell approached, the bears were doing most of the shoving. The S&P 500 closed at 2133.04 on Thursday, down 0.3% and moving within reach of a key support level around 2120.
Third-quarter reports just brutalized these names.
Nokia Corp (ADR) (NOK)
The earnings bug bit Finnish telecom-technology name Nokia on Thursday, sending NOK shares lower to the tune of 8.3%.
For its recently completed third quarter, Nokia booked a loss of $136 million, down steeply from a profit of $165.7 million in the same quarter a year earlier. On a per-share basis, that translated into a loss of 2 cents per share. Adjusted for one-time costs, the company earned 5 cents per share, in line with expectations. Revenue of $6.57 billion also barely topped estimates.
Nevertheless, NOK shareholders were spooked by the 7% decline in year-over-year sales, perhaps expecting signs that the worst for the company was in the past.
National-Oilwell Varco, Inc. (NOV)
Although the 43% rally in oil prices since February’s low has proven beneficial to most energy stocks’ results, that rebound has yet to help National-Oilwell Varco enough to satisfy shareholders.
The company, which designs and builds oil field equipment, lost 34 cents per share of NOV on an operating basis. Analysts were looking for a loss of 28 cents per share. Revenue of $1.65 billion also missed estimates for a top line of $1.69 billion. Even more alarming to NOV shareholders … revenue was down 50% on a year-over-year basis.
NOV closed 7.8% lower on Thursday.
Groupon Inc (GRPN)
Last but not least, Groupon gave itself a shot at a bullish response to its third-quarter numbers, but an unpopular decision to acquire LivingSocial made it easy for GRPN shareholders to see the glass as half-empty. The market punished the company by sending Groupon 22% lower.
Last quarter, GRPN reported an operating loss of 1 cent per share, topping estimates for a 2-cent loss. Sales of $720.5 million also rolled in better than the anticipated top line of $710.5 million. That was only a 1% improvement in sales, however, and gross billings fell, calling into question the optimism CEO Rich Williams was exuding just a few months ago.
Fanning the bearish flames was news that Groupon would be acquiring rival deals website LivingSocial for an undisclosed amount. Although the deal could add to the top line, LivingSocial is struggling itself. Investors may be concerned Groupon is buying into a money pit that could turn headwinds into full-blown hurdles for the suitor.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.