3 Stocks Getting Whacked Today
The fact that the Dow Jones Industrial Average is currently down by a negligible 15 points, or 0.11%, is far from indicative of three of its components' woes today.
Shares of Intel are getting absolutely slammed, down more than 6% in midday trading, after the chip maker reported downright abysmal sales figures for the fourth quarter. In a three-month period that's typically its strongest, sales for the company fell by 3% from the year-earlier period and profits declined by a staggering 27%.
The results are due largely to the suffering personal-computer market, which experienced a rare sales decline in 2012 as tablets encroached on their territory. Revenue from Intel's PC client group, which accounts for roughly two-thirds of the company's overall sales, declined by 6%. And to make matters worse, the company forecast a further 6% decline in the current quarter.
In an effort to stem the tide, Intel promulgated designs for a tablet-PC hybrid known as the Ultrabook. According to Intel's outgoing CEO Paul Otellini, "It's no longer necessary to choose between a PC and a tablet." Whether or not this is true remains to be seen.
Beyond Intel, the second-worst-performing stock on the Dow is American Express . Yesterday, the company said that its profit for the fourth quarter fell to $637 million, down from $1.19 billion in the fourth quarter of last year.
While loans increased at the credit card company on a year-over-year basis, its bottom line was hit by a number of charges. Among other things, it loan loss provisions for the quarter rose to $638 million from $409 million in the fourth quarter of 2011. In addition, the company recorded a multimillion-dollar charge related to its decision to cut 5,400 jobs this year in its travel-services business.
Rounding out the top three worst-performing stocks on the Dow today is Bank of America , the nation's second-largest bank by assets. Like Intel and American Express, B of A's woes are related to its earnings release.
For the three months ended Dec. 31, B of A earned a mere $732 million, well south of the roughly $2 billion it earned in the final quarter of 2011. The otherwise disappointing performance resulted from two massive charge-offs to settle legal disputes dating back to the financial crisis. Without those, as I noted elsewhere, it would have been an altogether positive quarter.
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John Maxfield owns shares of Bank of America and Intel. The Motley Fool recommends American Express and Intel. The Motley Fool owns shares of Bank of America and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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