Flooding in Thailand — the effects of which have already hit a couple of sector mainstays, including disk-drive maker Western Digital (NYSE:WDC) and Toyota Motor (NYSE:TM) — caught up with Dell (NASDAQ:DELL) on Wednesday.
Dell shares dropped about 3.2% to $15.13 on the day after its mixed third-quarter report Tuesday evening, which beat expectations but also included lower forecasts for the rest of the year because of the massive Thai floods that have hit numerous manufacturers in the country, especially disk-drive makers.
Dell posted earnings of $893 million, or 49 cents per share, up 9% from the year-ago period’s $822 million (42 cents). Adjusted EPS of 54 cents per share beat FactSet analysts’ expectations of 46 cents. However, Dell said it expects full-year revenue growth to be at the bottom of its outlook — a forecast already lowered in August. Dell cited not only the fallout from the natural disaster but also the wavering economy.
Another retailer took one on the chin this week, with teen fashion icon Abercrombie & Fitch (NYSE:ANF) hemorrhaging almost 14% on a lackluster earnings report — and news of a lawsuit filed by MTV show Jersey Shore star Michael Sorrentino, more famously known as “The Situation.”
A&F reported earnings of $50.9 million (57 cents per share) that were almost flat year-over-year and woefully short of analysts’ EPS expectations of 71 cents. Abercrombie & Fitch did report a 7% bump in same-store sales, though sales at its namesake store increased only 4%. The company also will be closing up to 60 stores across the U.S., most of them by year-end.
The $4 million lawsuit filed by “The Situation” comes off the heels of a summer advertising campaign in which A&F lashed out at the controversial reality star. According to the lawsuit, A&F claimed “Sorrentino was not worthy enough to wear Abercrombie clothing or that Sorrentino was so undesirable that wearing Abercrombie clothing would cause ‘damage’ to the defendant.” The suit also alleges Abercrombie used various phrases associated with the reality actor on its clothing, and even claimed to offer Sorrentino money to stop wearing the company’s clothing — claims Sorrentino denies.
ANF shares finished the day at $48.10, their lowest point in almost a year.
Three Up
- NovaGold Resources (AMEX:NG): Up 24.29% ($2.14) to $10.95.
- Micron Technology (NASDAQ:MU): Up 23.44% ($1.28) to $6.74.
- Green Mountain Coffee Roasters (NASDAQ:GMCR): Up 9.85% ($4.69) to $52.30.
Three Down
- Marathon Petroleum (NYSE:MPC): Down 11.74% ($4.34) to $32.64.
- Valero (NYSE:VLO): Down 9.32% ($2.32) to $22.56.
- Morgan Stanley (NYSE:MS): Down 7.97% ($1.27) to $14.66.
As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.
