Wall Street’s main stock indexes took a dive, led by a sell-off in tech stocks, as Federal Reserve Chairman Jerome Powell spoke on monetary policy before the Senate Banking Committee.
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The tech-heavy Nasdaq Composite Index dropped 2.2% and the S&P 500 Index fell 0.5%. The Dow Jones Industrial Average retreated 0.9%.
In earnings news, shares of Freshpet slumped more than 9% after the pet food company swung to a surprise loss in the fourth quarter and announced a share sale. The company incurred a loss of $0.08 per share in 4Q, compared with earnings of $0.12 per share during the same quarter last year. Analysts had expected the company to earn $0.09 per share. Net sales jumped 28.5% to $84.5 million year-over-year but fell short of analysts’ estimates of $85.53 million. Oppenheimer analyst Rupesh Parikh, who has a Buy on the stock, commented, “FRPT is uniquely positioned to outperform given the potential ability to lap difficult compares and sustain industry leading 30%-plus top-line growth.”
Palo Alto Networks dropped 3.6% after the cybersecurity solution provider issued 3Q earnings guidance, the mid-point of which missed the Street’s estimates. The weak outlook overshadowed the company’s better-than-expected results for the second quarter. Palo Alto anticipates 3Q adjusted earnings to come in between $1.27-$1.29 per share, which at the midpoint of $1.28 per share is a penny lower than analysts’ expectations of $1.29. The company expects revenues to generate $1.05 billion – $1.06 billion, with the midpoint of $1.055 billion coming in slightly above Street estimates of $1.05 billion.
Meanwhile, shares of Home Depot fell 3.9% even as the home improvement retailer delivered better-than-expected sales in the fourth quarter boosted by an increase in the number of customer transactions and higher average ticket size of purchases during the coronavirus pandemic. The company posted earnings per share (EPS) of $2.65, which came in ahead of analysts’ expectations of $2.61. Revenue increased 25.1% year-on-year to $32.3 billion topping analysts’ estimates of $30.66 billion. CFO Richard McPhail commented, “If the demand environment during the back half of fiscal 2020 were to persist through fiscal 2021, it would imply flat to slightly positive comparable sales growth and operating margin of at least 14 percent.”
Macy’s reported fourth-quarter earnings, which came in ahead of the Street consensus as the department store operator benefitted from a better-than-expected holiday sales quarter. Sales declined 18.7% to $6.78 billion year-on-year but topped the consensus estimates of $6.5 billion. The company reported 4Q adjusted diluted earnings per share (EPS) of $0.80, blowing past analysts’ estimates of $0.12. The company’s digital platform saw sales in 4Q grow 21% year-on-year with digital penetration at 44% of net sales. Macy’s expects FY21 to be a recovery year with net sales to range between $19.75 billion to $20.75 billion and adjusted diluted EPS to land between $0.4 to $0.9. Shares rose 1.6%.
In energy-related news, Occidental Petroleum Corp.’s 4Q loss more than doubled to $0.78 per share, from the $0.30 loss per share posted in the year-ago period. Analysts had expected a loss of $0.58 per share. The company’s 4Q revenues of $3.35 billion declined 53.1% year-over-year and missed analysts’ expectations of about $4.37 billion. During the reported quarter, the company’s oil and gas pre-tax loss improved over the third quarter due to higher commodity prices. Shares depreciated 2.8%.
In other corporate news, PAVmed tanked 23% after the medical devices company announced the spin-off of its majority-owned subsidiary, Lucid Diagnostics, into a separate public company. PAVmed’s plan is to either spin-off Lucid Diagnostics through an initial public offering (IPO) or through a combination with a healthcare special purpose acquisition corporation (SPAC). The medical devices company will remain Lucid’s largest shareholder following the spin-off. Separately, PAVmed announced a public offering of its common stock without providing details about the size of the sale.
