NEW YORK, August 18, 2017 /PRNewswire/ --
U.S stock indexes fell Thursday after several concerning developments weighed on markets. The Dow Jones Industrial Average dropped 274 points, or 1.24%, to 21,750. This week the President ended the manufacturing council after CEOs disbanded strategic and policy forum. The uncertainties in Washington raised new doubts regarding the administration's agenda, tax cuts specifically. The terrorist attack in Barcelona also caused panic. In addition, several major corporations have reported weak earnings results this week, adding fuel to the fire. Alibaba Group Holding Ltd (NYSE: BABA), L Brands Inc. (NYSE: LB), Wal-Mart Stores Inc. (NYSE: WMT), Cisco Systems, Inc. (NASDAQ: CSCO), Dicks Sporting Goods Inc. (NYSE: DKS)
"Cisco is in the midst of a turnaround, and it is showing very slow progress in that, while Wal-Mart has had something like 12 straight quarters of revenue growth, which led to expectations getting a little ahead of themselves. They're just taking a little bit of a step back, and so is the market," said Mark Spellman, portfolio manager at Alpine Funds, MarketWatch reported. "There's no direct market impact in what [the President] has done recently, but if things continue to be so polarized that his agenda is completely dead on arrival, that would have a negative impact," Spellman added.
Alibaba Group Holding Ltd (NYSE: BABA) announced its financial results for the quarter ended June 30, 2017. Shares spiked about 5 percent. The company's revenue was RMB50,184 million (US$7,403 million), an increase of 56% year-over-year. Annual active consumers on China retail marketplaces reached 466 million, an increase of 12 million from the 12-month period ended March 31, 2017. "Alibaba had a strong start to fiscal 2018, reflecting the strength and diversity of our businesses and the value we bring to customers on our platforms. Our technology is driving significant growth across our business and strengthening our position beyond core commerce," said Daniel Zhang, Chief Executive Officer of Alibaba Group. "We are excited about the future as we continue to innovate and drive synergies among the businesses throughout the Alibaba ecosystem."
L Brands Inc. (NYSE: LB) share value fell over 11 percent Thursday, after the specialty retail business posted second quarter financial results. Earnings per share was $0.48 compared to $0.87 for the quarter ended July 30, 2016. Second quarter operating income was $300.9 million compared to $408.2 million last year and net income was $138.9 million compared to $252.4 million last year. L Brands lowered full year guidance - earnings per share to $3.00 to $3.20 from $3.10 to $3.40 previously. The company operates 3,077 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China. L Brands is the parent company of Victoria's Secret and Bath & Body Works.
Wal-Mart Stores Inc. (NYSE: WMT) shares tumbled 2 percent Thursday after the retail operator announced a mixed earnings report for their second quarter. Wal-Mart reported total revenue of $123.4 billion, an increase of $2.5 billion or 2.1%. Second quarter EPS included a change of $0.17 loss on extinguishment of debt in connection with the company's recently completed debt tender offers. The good news came from the eCommerce division. E-commerce growth at Walmart in the U.S. remained strong, led by organic growth through Walmart.com., Net sales and GMV grew 60% and 67%.
Cisco Systems, Inc. (NASDAQ: CSCO) shares fell Wednesday late Wednesday and continued Thursday, over 4%, as a result of weaker than expected earnings. Total revenue was $12.1 billion, down 4%, with product revenue down 5% and service revenue up 1%. Product revenue performance was led by Wireless and Security segments which increased 5% and 3%, respectively. "Non-GAAP total gross margin and product gross margin were 63.7% and 61.9%, respectively. The decrease in non-GAAP product gross margin compared with 63.9% in the fourth quarter of fiscal 2016 was also primarily due to pricing, partially offset by continued productivity improvements and to a lesser extent product mix," Cisco reports.
Dicks Sporting Goods Inc. (NYSE: DKS) stock crashed 20% Tuesday, after the sporting goods retailer reported sales and earnings results for the second quarter ended July 29th, 2017. On a non-GAAP basis, the Company reported consolidated net income for the second quarter ended July 29, 2017 of $104.8 million, or $0.96 per diluted share, compared to the Company's expectations provided on May 16, 2017 of $1.02 to 1.07 per diluted share. Second quarter 2017 non-GAAP results exclude a previously announced corporate restructuring charge and income related to a contract termination payment. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "GAAP to Non-GAAP Reconciliations."
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