Wild Moves In After Hours Session; Alcoa, Sears, Gap, Abercrombie & Fitch

After closing the regular session, these companies made massive moves after releasing information to investors.

Jan 9, 2014 at 10:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After the major indexes closed the day on a mixed note, with the Dow Jones Industrial Average finishing down 0.11%, the S&P 500 closing up by 0.03%, and the Nasdaq losing 0.23%, a few companies made big news in the after-hours session after releasing sensitive company-specific data.

The first was Alcoa (NYSE:AA), which unofficially kicked off earnings season today after the closing bell. The aluminum producer ended the regular trading session down 1.29% after news that the company would pay $384 million to resolve charges of bribery in Bahrain. After reporting lower-than-expected earnings per share, however, the stock dropped another 4.4% in the extended trading hours to finish the day at $10.22. Analysts were expecting $5.34 billion in revenue, and $0.06 per share in earnings; Alcoa reported $5.59 billion in revenue, but only $0.04 in earnings. Furthermore, revenue was lower by 5% when compared to the same time frame last year, and the company had to write down the value of acquisitions it made over a decade ago due to weak aluminum prices worldwide. Many investors are wondering what the long-term picture for the company looks like. 

Another big after-hours loser was Sears Holding (NASDAQ:SHLD), which fell 3.18% during the regular trading session and then another 13.11% in the extended session. The decline after market close came after the company reported that same-store sales at both its K-Mart and Sears locations were down during the holiday shopping season. At Sears, sales declined 9.2%, and K-Mart experienced a slump of 5.7%. The retailer has been struggling for some time now, and this may be one of the final shots the company can take before completely falling apart. Investors need to review their positions, and recognize that a company that seems like a deep hidden value may actually be just a value trap. 

Two of the big winners after the closing bell were Abercrombie & Fitch (NYSE:ANF) and The Gap (NYSE:GPS). The companies gained 13.94% and 2.28%, respectively.

Surprisingly, while Abercrombie & Fitch also experienced a slower holiday shopping season this year than last, with sales declining 6%, investors sent the company's shares higher. This was because Wall Street had been expecting a much worse holiday season than what the company actually achieved. The retailer has been struggling, but said on Thursday that its sales and cost-cutting during the holiday period paid off. Furthermore, management believes that the company's adjusted earnings for the fiscal year, which ends this month, will fall within the range of $1.55 to $1.65 per share, much higher than the previous outlook of $1.40 to $1.50 per share that it had previously announced. 

The Gap, on the other hand, had a stronger holiday shopping season in 2013 than 2012, as sales rose 1%. While that may not seem like a massive jump -- because it isn't -- the results aren't that bad when compared it to other retailers. But what really got the shares moving higher this evening was that management at The Gap also increased its forecasted earnings per share to fall within the upper end of its $2.57 to $2.65 per-share range. The increased sales, and more confident management team, have given investors more confidence, but anyone buying today needs to remember that the retail industry in very fickle and volatile, especially during the earnings season following the holidays. 

More foolish insight

Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

Fool contributor Matt Thalman has no position in any stocks mentioned. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513.

The Motley Fool has no position in any of the stocks mentioned. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers