The past week finished on a somewhat bad note as the Bureau of Economic Analysis' "advanced" reading of U.S. GDP growth came in at 2.2%, markedly below economists' forecasts. However, even that wasn't enough to derail a week of strong earnings reports, which provided a nice tailwind for the markets that held through even that late-week disappointment. Among the big earnings headlines were sizeable beats from tech/consumer powerhouses Apple and Amazon.com.
By the time the dust had settled on Friday, the Dow Jones Industrial Average (INDEX: ^DJI) had tacked on 1.5%, while the broader Russell 3000 gained 1.9%. But while the broad markets ticked upward, some stocks were in freefall.
The week's big losers
And here come the lawsuits. If we made a movie of Accretive Health's (NYS: AH) past week, that could have been the title. Accretive, which helps hospitals and other health-care providers manage patient payments, found itself in hot water after the Minnesota attorney general released a report detailing the state's investigation into the company. The report alleges aggressive debt-collection practices at Minnesota hospitals as well as misuse of confidential patient information. As those are some pretty serious allegations, it comes as no surprise that investors hammered the company's stock.
Accretive didn't corner the market in headaches this week, though, as Allscripts' (NAS: MDRX) shares plunged on a shakeup and a big guidance cut. The company said full-year earnings per share will be in a range of $0.74 to $0.80, which is a hefty adjustment from its previous forecast of $1.06 to $1.10. That alone would have been enough to have investors running for the exits, but the company also revealed significant internal turmoil, which ended up with the chairman getting canned and three directors who disagreed with the decision resigning from the board. Separately, the company's CFO also announced his resignation so as to move on to greener pastures (can you blame him?).
The 3 Worst-Performing Russell 3000 Companies
Weekly Price Change
Source: S&P Capital IQ. Weekly price change is April 20-April 27. Includes only companies with market caps of $250 million or more.
InterDigital was front-ended by earnings season. The patent developer reported quarterly results on Thursday, and investors didn't like what they saw. Revenue fell 12% from the prior year, while earnings per share plunged 53%. The EPS tally of $0.24 was well short of the $0.31 Wall Street was looking for. While it's tough to evaluate a business model like InterDigital's on a quarter-to-quarter basis, the disappointing results only built on a lackluster run that's been frustrating shareholders since last summer.
Deckers shares were slammed by a similarly disappointing quarterly report. If the way to get investors excited about an earnings report is to beat earnings expectations and raise guidance -- or "beat and raise," as the folks on TV say -- then a miss-and-cut is perhaps the best way to get them running. Deckers delivered the latter this week. Earnings per share fell 59% from last year, and the $0.20 tally missed the $0.25 average analyst estimate. Making matters worse, the company lowered full-year guidance to a range of $4.56 to $4.61, which is notably short of Wall Street's hoped-for $5.17.
At week's end, InterDigital had slid 13% while Deckers had 24% hacked off of its share price.
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