7 Serious Earnings Disappointments That Just Stung Shareholders
Monday’s trading session was marred by overseas weakness, profit taking and a realization that the Federal Reserve now is likely to target a December interest rate hike. It turns out that some companies just really missed their mark, or that investors wanted a whole lot more, on their earnings reports.
24/7 Wall St. has tracked seven big stock moves to the downside. Included is how each has missed or what the problem was, as well as trading color on each.
CommScope Holding Co. Inc. (NASDAQ: COMM) got dusted despite beating expectations with a $0.53 earnings per share (EPS) figure, versus $0.50 estimates, but that was before a loss after deducting items. The problem was that 1) revenue was down almost 3% to $972.6 million and guidance for the fourth quarter looked lower and light versus expectations. CommScope is a 45.4 billion company by market cap, and that is after an 11% drop to $28.65. Its 52-week trading range is $20.19 to $34.12. Expectations just looked like they might have been too high for the connectivity and infrastructure solutions provider.
EV Energy Partners L.P. (NASDAQ: EVEP) hit a 52-week low after missing on revenues. The master limited partnership (MLP) reported that it expects its distributable cash flow below levels necessary to maintain a $0.50 quarterly distribution. While this sounds bad, the reality is that EV Energy’s yield equivalent going into earnings would have been a 36% distribution. Should its holders have really expected that to be realistic? This MLP was trading down by 26% at $4.04, and it hit a 52-week low with its new year range of $4.02 to $32.98.
Hertz Global Holdings Inc. (NYSE: HTZ) is a report that, well, just hurts. Its $237 million profit was short of expectations of $0.52 per share, or $0.49 per share on the adjusted earnings. Revenue also was a bit disappointing at $2.98 billion. Despite blaming foreign currencies, buying back shares and cost cutting, shares of Hertz were down 12% at $16.55 on over 23 million shares (three times normal) with less than an hour of trading left. Hertz has a 52-week range of $14.85 to $25.72, and the market cap after the drop was $7.6 billion.