Buoyed by enough compelling Q1 earnings reports Wednesday evening and Thursday morning, the bulls found a reason to pour in again. And this time, unlike Monday’s effort, the indices made some important technical progress. The S&P 500’s gain of 0.76% left it at 2355.85 for the day, and above its pivotal 20-day moving average line.
There were some earnings clunkers though, with two of them causing some of the day’s most significant selloffs. Thursday’s list of biggest losers includes TESARO Inc (NASDAQ:TSRO), eBay Inc (NASDAQ:EBAY) and Philip Morris International Inc. (NYSE:PM). Here’s the deal.
Philip Morris International Inc. (PM)
Several big names have posted first-quarter results that were less than thrilling. Add cigarette giant Philip Morris International to the mix. PM shares fell 3.5% following a disappointing Q1 report.
For the quarter ending in March, Philip Morris International earned 98 cents per share on $6.06 billion worth of revenue. Revenue was down from the year-ago tally of $6.08 billion, though profits per share of PM grew versus the comparable-quarter bottom line of 98 cents per share of PM. Analysts were looking for a profit of $1.03 per share and revenue of $6.4 billion.
Still, not everyone is worried about a rough first quarter. Wells Fargo analyst Bonnier Herzog commented:
“While Q1 was a tougher than expected quarter, we believe PM will execute to protect margins from secular combustible cig volume weakness with strong pricing and cost management. Importantly, we expect management’s commentary to focus on continued momentum behind iQOS as the company pivots toward reduced-risk products (RRPs). We expect the stock to react negatively on today’s results and would be buyers on weakness. We maintain our Outperform rating.”
eBay Inc (EBAY)
While PM fell following its earnings and revenue miss, online-auction operator eBay managed to top its earnings estimates. Unfortunately, the beat still wasn’t enough to stave off a selloff.
For its first fiscal quarter of 2017, eBay earned 49 cents per share on sales of $2.21 billion. Although just barely, that was good enough for a beat on both fronts — the pros were only calling for a bottom line of 48 cents per share of EBAY and revenue of $2.21 billion.
Still, EBAY ended the day down 3.9%, largely in response to disappointing guidance for the quarter currently underway. Analysts have been projecting a consensus income estimate of 47 cents per share on sales of $2.32 billion. The company cautioned, however, it was only expecting a profit of between 43 and 45 cents per share, and expecting sales of between $2.28 billion and $2.32 billion.
Tesaro Inc (TSRO)
Last but not least, although shareholders were certainly excited about the prospects for ovarian cancer drug Zejula, shares of its maker Tesaro were hit hard today after a its retail price was unveiled.
Although the price varies with the dose, at the drug’s starting levels, patients would be spending $14,750 per month, or $177,000 per year. Janney analyst Debjit Chattopadhyay pointed out that, on average, the total cost for the typical patient would be closer to $119,000 for a twelve-month regimen. That was of little comfort to TSRO shareholders though, some of which believe the high price will make it difficult to market — insurers may balk.
TSRO ended the day with a loss of 6.1%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.