Stocks may have started the day in the black, but against a backdrop of the initial Q1 GDP growth pace of 0.7% and an oddly tepid response to what were solid earnings reports from some of the market’s key names, those traders couldn’t remain as bullish. By the time the closing bell rang, the S&P 500 was off 0.19% for the day, ending the week at 2,384.2.
Leading the tepidly bearish charge were Athenahealth, Inc (NASDAQ:ATHN), Intel Corporation (NASDAQ:INTC) and Synchrony Financial (NYSE:SYF), all of which were sent lower in response to lackluster earnings news.
Synchrony Financial (SYF)
Synchrony Financial, the former financing arm of General Electric Company (NYSE:GE) that was spun off in 2015, was probably wishing its results were still buried with its former parent company’s numbers after they were posted early on Friday morning. SYF shares didn’t like what they heard, sending the stock to a loss of 15.9% for the day.
The bearish response is understandable. For the quarter ending in March, Synchrony was expected to report earnings of 74 cents per share on revenue of $3.54 billion. Instead, the company reported a profit of 61 cents per share of SYF and a top line of $3.91 billion. Although the top line was better than expected, the earnings miss was not only wide, but the bottom line withered — a lot — compared to the year-ago profit figure.
The bulk of the shortfall stemmed from a $403 million loan-loss provision Synchrony Financial was forced to factor in. SYF shareholders weren’t sympathetic though.
Intel Corporation (INTC)
Synchrony Financial wasn’t the only name to get beaten up … well, down on Friday following a mixed first-quarter earnings report. Technology giant Intel also hit a headwind following the release of its fiscal Q1 numbers, though not as harsh as the one SYF bumped into.
Last quarter, Intel earned 66 cents per share versus expectations for a profit of only 65 cents. Revenue of $14.8 billion, however, came up just a little shy of estimates for a top line of $14.81 billion.
The big letdown came from the company’s data center arm. Though its Data Center Group’s business was up 6% year-over-year, that was still short of the company’s target. It matters simply because that division is the centerpiece of the company’s growth plans.
INTC ended the session down 3.4%.
Athenahealth, Inc (ATHN)
Last but not least, medical billing and management IT names athenahealth struggled with lower reimbursement rates as well as fewer reimbursable doctor visits last quarter, taking a bite out of the top and bottom line.
For its first quarter of 2017, athenahealth earned an operating profit of 32 cents per share, missing estimates of 46 cents per share. Sales of $285.4 million missed the outlook for revenue of $296.6 million.
The core of ATHN stock’s 19.3% setback today, however, was in response to the YOY decline in earnings for the first quarter, and an alarming contraction for its full-year outlook. The company now expects to only earn between $36 million and $46 million for 2017, down from previous guidance for a full-year profit of between $61 million and $81 million.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.