Stocks got a bullish jump this morning in response to a surprisingly strong January payroll-growth reading from ADP, but the effort fizzled fairly early, and Janet Yellen didn’t exactly offer any clarity as to when the next rate-hike may happen (it didn’t happen today). By the time the closing bell rang, the S&P 500 ended the session at 2,279.55, up a scant 0.03%.
It could have been worse though, and for owners of Pitney Bowes Inc. (NYSE:PBI), Sprint Corp (NYSE:S) and Automatic Data Processing (NASDAQ:ADP), it was worse. Here’s why these three names ended the day more in the red than most other losing stocks.
Automatic Data Processing (ADP)
The good news is, payroll processor Automatic Data Processing topped its second fiscal quarter estimates. The bad news is, the company reeled in its 2017 outlook. Investors were more concerned about the lowered guidance, sending ADP lower to the tune of 5.7% on Wednesday.
For the quarter ending in December, Automatic Data Processing earned 87 cents per share on sales of $2.99 billion. The bottom line and top line were both up on a year-over-year basis, and it was considerably better than the profit of 81 cents per share of ADP analysts were expecting.
Revenue fell short of the expected top line of $3.02 billion though, and worse, ADP cautioned investors it would only produce sales growth of 6% this year, versus prior sales growth guidance of between 7% and 8%.
Sprint Corp (S)
The knee-jerk reaction to yesterday morning’s earnings report from Sprint was a bullish one. The more time traders had to think about it though, the less they liked what they heard. Tuesday’s intraday rollback followed through today, sending S to a loss of 2.4%.
By most accounts, its fiscal third quarter was a victory. The addition of 405,000 postpaid subscribers topped expectations, and the loss of 12 cents per share was a decided improvement on the loss of 21 cents per share of S reported for the same quarter a year earlier. Its full-year outlook was raised too.
On a GAAP basis though, investors can’t get past the fact that the adjusted free cash flow was a negative $646 million last quarter, and seems to be worsening. The 200% gain over the course of the prior twelve months indicates the market is looking for more — and better — from the turnaround effort by now.
Pitney Bowes Inc. (PBI)
Finally, office equipment maker Pitney Bowes fell short of its fourth-quarter earnings estimates, and revenue fell rather than grew on a year-over-year basis.
For the quarter ending in December, Pitney Bowes earned 53 cents per share on revenue of $887.1 million. Income missed estimates of 58 cents per share of PBI, and the top line was down 5.3% versus the same quarter a year earlier. Sales fell in all but one product category. Worse, Pitney Bowes lowered its 2017 earnings guidance from a range of $1.80 to $1.95 to a range of $1.70 to $1.85. Analysts were calling for 2017 earnings of $1.84 per share of PBI.
PBI ended the day down 17.5%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.