Wednesday was another down day for the stock market, as major benchmarks finished with small losses of 0.3% or less for the session. Deteriorating relations between the U.S. and North Korea were one cause for concern among some investors, but most of the attention on Wall Street appeared to be on individual company news as the second-quarter earnings season begins to wind down. In particular, several companies suffered from bad news, and Priceline Group (NASDAQ: PCLN), Office Depot (NASDAQ: ODP), and Valeant Pharmaceuticals International (NYSE: VRX) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Priceline warns of weaker growth ahead
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Shares of Priceline Group fell 7% after the company announced its second-quarter financial results. The online travel giant reported strong performance for the quarter, including an 18% rise in overall revenue and continuing strength in gross travel bookings gains. Yet some growth figures slowed, including the key metric of hotel room-nights booked. Priceline also gave downbeat guidance for the key summer quarter, with sales and earnings projections that were well shy of what investors had hoped to see. Priceline has a reputation for underpromising and overdelivering, but shareholders still reacted negatively to the news, perhaps reflecting the big gains that the stock has seen so far in 2017.
Office Depot takes a hit
Office Depot stock lost over a quarter of its value in the wake of the company's financial report for the second quarter. The office supply retailer said that revenue fell 9% on a 6% drop in comparable sales, and Office Depot failed to make any progress in growing its bottom line. Guidance for the full 2017 year was equally downbeat, with the company forecasting lower sales than in 2016 despite an expected improvement from tough industry conditions in office retail. With e-commerce specialists starting to focus more directly on grabbing market share from Office Depot and its peers, the future of office supply retail as a distinct category is coming into question, and today's drop in the stock reflects that uncertainty going forward.
Valeant still faces big challenges
Finally, Valeant Pharmaceuticals International stock finished down 10%. The beleaguered drug company's investors had initially responded favorably to second-quarter results that it released early Tuesday, as they liked the fact that Valeant saw relative strength in the company's Salix Pharmaceuticals and Bausch & Lomb segments. Valeant also said that it had successfully paid down a significant amount of debt and was on track to meet its $5 billion debt reduction target by early next year. Today, Valeant investors seemed to focus on the negative, noting that despite its progress, the company still has a long way to go to recover fully. Shareholders need to be prepared for continued ups and downs from Valeant as it sorts through its turnaround efforts.
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