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Why Lumber Liquidators Holdings, Archer Daniels Midland, and Mosaic Slumped Today

By Dan Caplinger - May 2, 2017 at 4:26PM

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These stocks fell on a quiet day for the market. Find out why.

The stock market didn't make any major moves on Tuesday, and the Dow and S&P 500 both finished very close to where they started the day on a general lack of market-moving news. There was plenty of activity within as earnings season went through its quarterly crescendo, but the balance between winners and losers from financial reports was relatively even. Despite an increasingly favorable outlook among many investors about the state of the overall economy, some companies had bad news to report. Lumber Liquidators (LL -2.85%), Archer Daniels Midland (ADM -0.54%), and Mosaic (MOS -3.08%) 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.

Lumber Liquidators loses big

Shares of Lumber Liquidators Holdings dropped 14% in the wake of the company's first-quarter financial results. The wood-flooring specialist said that it lost $0.93 per share, which was actually somewhat better than its results from the year-ago quarter but were still far worse than what investors were expecting to see. A 6% rise in revenue on comparable-store sales gains of 4.7% wasn't strong enough to convince investors that the retailer is on track for a full recovery from its controversy-laden plunge over the past few years. CEO Dennis Knowles, however, was pleased at the positive comps and believes that they're just the beginning of a longer-term rebound that could take the company back toward what it looked like during its heyday in the early 2010s.

Hardwood flooring.

Image source: Lumber Liquidators.

ADM leaves shareholders hungry for more

Archer Daniels Midland stock fell 9% after the company warned that poor conditions in the agricultural markets could constrain its ability to produce profit growth going forward. Reported profits jumped by half from year-ago levels, as ADM made the most of a modest 4% rise in revenue. Yet in a conference call after the earnings release, CEO Juan Luciano said that there are extremely large stockpiles of foodstuffs across the globe, and that has made it difficult for ADM to make profitable moves internationally with its asset base. The company has already made a lot of progress with restructuring efforts to take greater advantage of available opportunities, but that could simply mean that ADM has already captured the low-hanging fruit, leaving it with bigger challenges ahead.

Mosaic needs a growth boost

Finally, shares of Mosaic declined 7%. The fertilizer giant said that lower prices on potash and phosphate-based fertilizers led to a small net loss of $1 million, wiping out year-earlier earnings of $257 million. Net sales fell from year-ago levels, mostly because weak fertilizer commodities markets outweighed the greater volume demand from the buyers that Mosaic supplies. CEO Joc O'Rourke said that Mosaic anticipates better market conditions for potash and phosphates in the rest of 2017, and that could help boost earnings going forward. However, investors seem skeptical about the size of that potential growth, and until they see more tangible proof of a recovery in the fertilizer market, they appear content to leave Mosaic share prices at low levels.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Lumber Liquidators. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Mosaic Company Stock Quote
The Mosaic Company
MOS
$53.16 (-3.08%) $-1.69
Archer-Daniels-Midland Company Stock Quote
Archer-Daniels-Midland Company
ADM
$85.73 (-0.54%) $0.47
LL Flooring Holdings, Inc. Stock Quote
LL Flooring Holdings, Inc.
LL
$10.21 (-2.85%) $0.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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