The market did its best to undo as much of Thursday’s damage as it could, but with ongoing political turmoil and a few too many ugly responses to Friday’s earnings reports, it just wasn’t in the cards. The S&P 500 Index ended the session at 2,425.55, down 0.18%%.
Foot Locker, Inc. (NYSE:FL), Deere & Company (NYSE:DE) and Infosys Ltd ADR (NYSE:INFY) were chief among the reasons the market could never get off the ground, with these three names all losing lots of ground on Friday.
Here’s the deal.
Infosys Ltd ADR (INFY)
Truth be told, it’s probably been a long time in the coming. But, Infosys were still surprised to learn this morning that CEO Vishal Sikka would be stepping down, forcing INFY shares to a loss of 7.1% on the last trading day of the week.
Sikka said his decision was driven by a “constant drumbeat” of distractions, including new and unfavorable H1-B visa rules, last weekend’s events in Charlottesville and President Trump in general.
There’s little doubt to INFY shareholders, however, that the overarching reason for Sikka’s resignation was rooted in what had become an ugly and relentless public feud with the company’s founder Narayana Murthy. Murthy accused Sikka of poor corporate leadership, setting off a war of words ever since.
Deere & Company (DE)
The good news is, farming machinery maker Deere & Company topped its fiscal third-quarter estimates, and even raised its profit guidance for the full year. The bad news is, the only thing DE shareholders focused on was coming up short of the third quarter’s revenue estimate.
For the quarter ending in July, Deere & Company — you may also know it as John Deere — turned $6.83 billion worth of sales into a profit of $1.97 per share. Both figures easily improved on the year-ago top line of $6.72 billion and profit of $1.55 per share of DE stock, and last quarter’s bottom line was better than the $1.93 per share analysts had collectively modeled. Traders just couldn’t get past the fact that Deere didn’t meet or exceed its revenue outlook of $6.88 billion. Not even upping its 2017 sales growth outlook from 9% to 10% could help buoy the stock.
The crux of the 5.4% setback DE shares suffered on Friday, though, was likely the downgrade that followed. Baird analyst Mircea Dobre cut his rating on the stock from “Outperform” to “Neutral,” explaining:
“We thought 3Q would mark the last big operating beat quarter of FY17 before focus fully shifted to FY18 …this proved not to be the case.”
Foot Locker, Inc. (FL)
Last but not least, though Nike Inc (NYSE:NKE) and Under Armour Inc (NYSE:UAA) may have technically dished out a great volume of pain by virtue of their larger size and wider ownership, they were both only deep in the red today in sympathy to athletic apparently industry peer Foot Locker, which saw its stock plunge a stunning 27.9% today after posting horrible Q2 numbers.
Last quarter, the company drove revenue of $1.7 billion, coming up short of the $1.8 billion analysts were expecting. Even more troubling is how earnings fell from 94 cents per share in Q2 of 2016 to only 62 cents per share of FL this time around; analysts had been calling a per-share profit of 90 cents. Scariest of all, however, was the same-store sales lull of 6%, versus the 1% drop the pros had modeled.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. Follow him on Twitter, at @jbrumley.