Quantcast

Why Sohu.com, Netflix, and American Express Slumped Today


Major benchmarks extended their recent losses on Monday, thanks in part to a broader pullback in the tech space.

But several individual stocks stood out among today's decliners, including Sohu.com (NASDAQ: SOHU) , Netflix (NASDAQ: NFLX) , and American Express (NYSE: AMX) . Read on to learn why.

Stock market data with red arrow line chart indicating losses

Image source: Getty Images.

Sohu's ad headwinds

Shares of Sohu.com fell 13.4%  after the Chinese internet media specialist announced mixed second-quarter results relative to expectations.

On one hand, Sohu's quarterly revenue climbed 5% year over year to $486 million, falling well short of consensus estimates for $502 million. On the other hand, that translated to an adjusted quarterly loss of $49 million, or $1.27 per share, narrower than average expectations for a loss of $1.49 per share.

CEO Dr. Charles Zhang admitted that revenue was "slightly soft given the continued headwinds against [Sohu's] brand advertising business." But he also credited the company's improved bottom line to "aggressively slashed content costs."

Looking to the third quarter, Sohu expects revenue between $445 million and $470 million, and an adjusted net loss per share between $1.40 and $1.65. Both ranges miss most investors' expectations for a loss of $1.12 per share on revenue of $558 million.

Netflix's new big-box competition

Netflix stock dropped 5.7%  in the wake of a  Wall Street Journal report  (may require subscription) that said Walmart is considering whether to launch its own competing video-streaming service.

Walmart is consulting with cable-industry veteran Mark Greenberg on plans to introduce a streaming service with programming and pricing tiers that would cater to Middle America. Such a move could chip away at Netflix's commanding lead and impressive recent momentum in what many analysts view as a relatively mature domestic market.

To be clear, WSJ also noted that Walmart still hasn't given the project a formal green light. But the global retail juggernaut should make its final decision on whether to proceed by late this summer or early fall.

American Express' shady sales tactics

Finally, shares of American Express lost 2.9% after a Wall Street Journal report  (may require subscription) alleged that the financial services company's foreign-exchange segment has long recruited small business customers with offers for low currency-conversion rates, only to secretly raise those rates without notification later on.

The allegations were brought by both current and former American Express employees, who claim the shady sales tactics were widespread, and largely stemmed from the business unit's "commissions-driven culture."

American Express, for its part, has responded by saying it will conduct a review led by a third party to "determine whether all of [its] standards are being met." But in the meantime, the news is unlikely to do the company any favors in terms of customer rapport.

Offer from The Motley Fool: The 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor , has tripled the S&P 500!*

Tom and David just revealed their ten top stock picks for investors to buy right now.

Click here to get access to the full list!

* Stock Advisor returns as of June 4, 2018.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool recommends Sohu.com. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: AMX , SOHU , NFLX



More from Motley Fool

Subscribe






Motley Fool
Contributor:

Motley Fool

Market News, Investing










Research Brokers before you trade

Want to trade FX?