Why SanDisk, AutoNation, and Mattel Tumbled Today

Thursday was a bad day for the stock market, as investors suddenly had to deal with the new worry of increased tension between Russia and Ukraine after a Malaysian jet crashed in the eastern part of Ukraine today. With investors already on edge given the huge rise in stocks and the lack of any meaningful correction for years, the news was enough to send major market benchmarks down about 1%. SanDisk (NASDAQ: SNDK  ) , AutoNation (NYSE: AN  ) , and Mattel (NASDAQ: MAT  ) were among the worst performers in the stock market today.

Source: SanDisk.

SanDisk crashed 14% as the maker of memory and solid-state storage drives didn't give investors the full extent of the good news they'd hoped to see. Sales rose 11%, but earnings only grew by around 4%, and SanDisk gave negative guidance in its third-quarter revenue projections. Nevertheless, SanDisk continues to see great promise in the solid-state drive market, with its emphasis on enterprise and client business helping it maximize the opportunity as more customers seek out greater storage capacity to take advantage of data analytics capabilities and other storage-intensive applications. The key to the company's future will be figuring out how to hold off competitors in the industry while continuing to work on innovative new technological advances that can draw greater customer demand.

AutoNation fell 8% after a similarly disappointing earnings report this morning. The car dealer's earnings rose, but failed to climb by as much as shareholders had expected, and although sales remained relatively strong, rising expenses curbed growth in profits. Most of the costs were connected to improvements to the auto retailer's website, which AutoNation hopes to make more functional and, therefore, more likely to create new leads and eventual sales to online customers. Overall, trends in the industry have seen conditions improve, with purchase activity generally on the rise, and helping to support dealer sales. If the investment can reduce AutoNation's reliance on other methods for obtaining would-be buyers, then it will be well worth the cost in the long run.

Source: Mattel.

Mattel dropped almost 7%. The toymaker suffered huge drops in revenue, with net sales down 9%, and even worse double-digit percentage declines for iconic brands Barbie and Fisher-Price. The lack of revenue hurt the bottom line, as well, with earnings per share falling by more than 60% from year-ago levels. For its part, Mattel argued that the recent acquisition of Mega Brands was the primary driver of falling gross margins, and that the negative impact should go away over time. Yet, with the stock already under pressure this year, Mattel clearly has shareholders impatient about the pace of its recovery from a subpar holiday season last year.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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Related Tickers

9/3/2015 4:01 PM
AN $57.91 Down -0.60 -1.03%
AutoNation, Inc. CAPS Rating: ****
MAT $23.10 Up +0.17 +0.74%
Mattel CAPS Rating: ****
SNDK $54.12 Up +0.07 +0.13%
SanDisk Corp CAPS Rating: ****