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Why Ciena Corporation (CIEN), Dollar General Corp. (DG) and Campbell Soup Company (CPB) Are 3 of Today’s Worst Stocks

Following through on Wednesday’s close, which firmly put the broad market back into a bullish gear, stocks are now back within sight and in reach of record highs. The S&P 500 Index finished the day at 2,471.55 up a healthy 0.57%.

Why Ciena Corporation (CIEN), Dollar General Corp. (DG) and Campbell Soup Company (CPB) Are 3 of Today's Worst StocksNot every stock jumped on the bullish bandwagon though. Ciena Corporation (NYSE:CIEN), Dollar General Corp. (NYSE:DG) and Campbell Soup Company (NYSE:CPB) were all decidedly moving in the opposite direction.

Here’s what upended each name.

Campbell Soup Company (CPB)

Soup may be good food, but it certainly didn’t make for a good fiscal Q4 earnings report from Campbell Soup Company. CPB shares tumbled 8.1% on Thursday following an earnings miss and grim sales outlook.

For the quarter ending in July, Campbell Soup Company turned $1.66 billion worth of revenue into an operating profit of 52 cents per share. Problem: Analysts were looking for earnings of 55 cents per share of CPB and sales of $1.69 billion.

Things are likely to get worse before they get better too. The company warned CPB investors in its fourth-quarter press release that it was only expecting to turn a profit of around $3.11 per share for the fiscal year that just got underway. General malaise for the entire food industry was cited as the reason. Pros had been modeling a profit of $3.20 per share of CPB.

Dollar General Corp. (DG)

Campbell Soup wasn’t the only stock to take one on the chin today following an earnings report — Dollar General did it too. Unlike CPB though, DG tanked even after the company topped last quarter’s earnings and sales estimates.

For its second quarter of 2017, Dollar General earned $1.10 per share, up from the year-ago bottom line of $1.08, and just edging out analyst expectations of $1.09. Sales of $5.83 billion were better than projections of only $5.8 billion, and thanks to new store openings, it handily beat a top line of $5.39 billion from the second quarter of 2016. Existing stores held their own though, gaining 2.6% for Q2.

Alas, however, it wasn’t enough. Although they were nothing to complain about in the least, investors were secretly wanting more … and better. Disappointed traders sent DG to a loss of 5.4% today.

Ciena Corporation (CIEN)

Finally, just like Dollar General and Campbell Soup, networking technology outfit Ciena unveiled last quarter’s earnings today, and like DG anyway, CIEN shares fell despite topping sales and profit estimates.

In its third fiscal quarter ending in July, Ciena earned 51 cents per share on revenue of $728.7 million, topping expectations for a profit of 49 cents per share of CIEN and sales of $726.9 million.

The prod for the 11% tumble CIEN suffered on Thursday, however, mostly stems the outlook for the current quarter. Ciena is looking for revenue of between $720 and $750 million for the period ending on October, versus analysts forecasts of $766.7 million. Fanning the bearish flames was this note from Instinet analyst Jeffrey Kvaal, who opined:

“[the new guidance is] at odds with Ciena’s F2Q commentary [when Ciena voiced optimism about its] growing backlog, rising inventory, and book-to-bill greater than 1. We thus assume the fundamental outlook has weakened, at least in the near term, and look forward to more detail on the call.”

Most investors didn’t wait for that detail in the call to make the decision to sell.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. Follow him on Twitter, at @jbrumley.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/why-ciena-corporation-cien-dollar-general-corp-dg-and-campbell-soup-company-cpb-are-3-of-todays-worst-stocks/.

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