Initially stunned by disappointing job growth numbers for April, stocks started Friday's trading session in the red. As traders had more time to mull things over though, they decided stocks had already been beaten down enough for the week. By the time the closing bell rang, the S&P 500 was at 2057.14, up 0.32%.
Here's what went wrong with each.
FireEye Inc (FEYE)
Cybersecurity outfit FireEye saw its stock dropped a whopping 19% on Friday after the company reported lackluster first-quarter results Thursday evening, and fanned the bearish flames by announcing its chief manager was stepping down.
Last quarter, FireEye lost 47 cents per share on revenue of $168 million. The loss was a bit less than the 50 cents per share analysts had modeled, but the top line rolled in under the projected $171.7 million.
Looking ahead, though the expected full-year net-loss of between $1.20 and $1.27 per share of FEYE was basically in line with estimates; the revenue outlook of between $780 million and $810 million was notably less than expectations for a top line of $828 million.
CEO David DeWalt will be stepping down from his post in mid-June , creating a new transitional disruption for the already-struggling company.
Square Inc (SQ)
Credit card payment processor Square may have reported a 51% improvement in revenue last quarter, but it still wasn't good enough to satisfy shareholders.
For its first fiscal quarter of 2016, Jack Dorsey-led Square lost 29 cents per share on $146 million in adjusted revenue. Both were well up from year-ago comparisons, and the top line easily beat analyst estimates of $136 million. The loss, though, was considerably larger than the loss of 6 cents per share of SQ the pros were counting on.
While the market for a simple, mobile phone-based payment middleman exists, multiple observers felt last quarter's loss indicates expenses will be habitually high, just to keep the company running. As Wedbush Securities explained as it was downgrading SQ shares from a Neutral rating to an Underperform: "We believe that Square is rapidly growing a business that may never reach peer (or guided) profitability."
SQ closed down almost 22% today.
Valeant Pharmaceuticals Intl Inc (VRX)
Last but not least, the bad news for VRX officially came yesterday afternoon. But, in that the news didn't have time to propagate until Thursday evening and Friday morning, the toll wasn't taken on Valeant Pharmaceuticals shares until today. And what a toll it took! VRX shares fell 13%.
New CEO Joseph Papa said in an official company statement , "Valeant has made mistakes in how it priced its drugs in the past, and we are committed to ensuring those mistakes are not repeated." To make good on the promise, the company has established a new drug price oversight committee that will be made up of doctors, scientists and other executives.
The move came as no real surprise to VRX shareholders who have watched the value of Valeant Pharmaceuticals shares deteriorate since August of last year, specifically because of rampant price hikes for its pharmaceuticals.
Nevertheless, seeing the company take decided measurable steps to quell the best part of its investment proposition makes it clear the pharmaceutical maker may never relive its glory days.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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