Stocks continued to tiptoe into new-high territory, spurred by bullish responses to a handful of earnings reports from key technology companies. The S&P 500 gain of 0.23% left it at a record high close of 2,117.69, even if it’s yet to make a convincing breakout thrust.
Friday’s session wasn’t fruitful for all stocks, however. 3D Systems Corporation (NYSE:DDD), Xerox Corp. (NYSE:XRX) and Perrigo Company plc (NYSE:PRGO) all fell back quite a bit, up-ended by disappointing news.
3D Systems (DDD)
Remember the earnings and revenue guidance 3D Systems offered back on February 26? Well, never mind. As it turns out, after assessing Q1’s surprisingly weak results the company now thinks that newly-developed impasse could last a while, crimping profits for DDD the whole time.
This morning, 3D Systems warned its first quarter revenue would only roll in somewhere between $158 million and $160 million, which is well short of the $182.8 million analysts had been collectively expecting. DDD stock fell almost 10% on the news.
Worse, 3D Systems warned it would need to rethink its full-year outlook as well. CEO Avi Reichental explained:
“We believe the combination of our expanding international business and growing concentration of manufacturing customers made us more vulnerable to the steep currencies decline relative to the U.S. Dollar and the aftermath of lower oil prices that curbed aerospace and automotive expenditures.”
Xerox (XRX)
Although most stocks that reported earnings this week jumped on the heels of good news, Xerox didn’t follow suit. The iconic maker or photocopiers — and now document-management solutions — missed last quarter’s revenue estimates, sending XRX shares 9% lower.
The specifics: Xerox earned the expected 21 cents per share. First quarter revenue of $4.47 billion, however, came up short of the analyst-projected top line of $4.6 billion.
Fanning the bearish flames was lowered guidance for 2015. The company now plans on earning between 95 cents and $1.01 per share of XRX stock this year … a range well below prior guidance of $1 and $1.06 per share, and below the average analyst estimate of $1.02.
Perrigo Company (PRGO)
If Mylan NV (NASDAQ:MYL) really wants to acquire Perrigo Company in order to avoid being acquired by Teva Pharmaceutical Industries Ltd (NYSE:TEVA), it’s going to have to do a lot better.
Earlier this week, drugmaker Perrigo Company rejected a buyout offer made by Mylan that valued PRGO at a price of $205, payable in an undisclosed combination of MYL shares and cash. That offer was raised to $222 per share of PRGO in the meantime, payable as $60 in cash and 2.2 shares of MYL for every share of PRGO tendered.
Perrigo accurately pointed out, however, that the current price of Mylan shares have been pumped up in the meantime by the fact that Teva made an offer for Mylan. If Perrigo takes the offer from Mylan, then the Teva offer will be retracted, which in turn would deflate the recently-inflated price of the very MYL stock Mylan is trying to use to buy Perrigo.
Increasingly convinced Mylan is never going to come up with an adequate acquisition offer, traders let PRGO slide more than 4% lower on Friday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
