Following through on Tuesday’s selling, the bears forced the market to a lower close for a fifth straight day. Spurred by a disappointing ADP payroll growth figure for October and ongoing uncertainty as to when the next rate hike from the Federal Reserve might take shape, the S&P 500 fell 0.65% to a close of 2,097.94.
That was chump-change compared to the losses booked by Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Allergan plc Ordinary Shares (NYSE:AGN) and FleetCor Technologies, Inc. (NYSE:FLT) on Wednesday, however.
Here’s what went wrong for each.
FleetCor Technologies, Inc. (FLT)
Payment middleman FleetCor Technologies may have topped its third-quarter estimates, but shareholders are anything but stoked about the beat.
After Tuesday’s closing bell rang, FleetCor Technologies announced it earned $129.6 million last quarter — or an operating profit of $1.92 per share — on sales of $484.4 million. The top line beat estimates of $482.8 million, as did the bottom line tally. Pros were only looking for earnings of $1.86 per share of FLT.
The 12% plunge FLT shares dished out on Wednesday, however, says the market was disappointed with the company’s full-year outlook. FleetCor says it’s going to earn something between $6.82 and $6.90 per share for 2016, versus analysts’ expectations of $6.86 per share. Revenue is also expected to roll in between $1.81 billion and $1.83 billion, falling short of the $1.85 billion analysts had been collectively forecasting.
Allergan plc Ordinary Shares (AGN)
Drugmaker Allergan made a valiant effort to offset the impact of lackluster Q3 results, but the 5.1% pullback AGN shares suffered on Wednesday says most investors weren’t distracted from the bad news.
Last quarter, the Dublin-based company earned $3.32 per share versus estimates for a profit of $3.57 per share of AGN. Revenue of $3.62 billion also missed analyst forecasts for $3.7 billion. Sales of Alzheimer’s drug Namenda were especially disappointing.
Allergan CEO Brent Saunders tried to take the brunt of the impact off of the company and its stock and put it on his shoulders, and simultaneously announced it was expanding a $10 billion AGN stock buyback program to $15 billion. Allergan also beefed up its quarterly dividend to 70 cents per share beginning next year.
None of it could stave off the selling, however.
Valeant Pharmaceuticals Intl Inc (VRX)
Finally, just one day after the stock jumped 33% on news that it was mulling a sale of its recently acquired Salix division and just two days after it was announced the organization was implicated in a criminal probe, Valeant Pharmaceuticals lost 11.4% of its value today.
The prod? It’s now being sued by former Sprout shareholders … one of the drug companies VRX acquired last year to add its so-called “female Viagra” to the Valeant portfolio. The lawsuit claims that VRX did an inadequate job of marketing the libido pill Addyi, which in turn means those investors did not collect the royalty payments they were led to believe would be paid.
As part of the buyout agreement, Valeant vowed to spend $200 million on marketing and research and development for the drug in 2016 and 2017. It’s not clear if VRX did so, but it is clear that less than $10 million worth of Addyi will be sold this year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
