Stocks hardly budged on Monday, as the Dow Jones Industrial Average (^DJI -0.22%) finished up slightly and the S&P 500 (^GSPC 0.82%) stayed flat.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
0.03% |
5.34 |
|
S&P 500 |
0% |
0.09 |
Data source: Yahoo! Finance.
Financial stocks led all sectors in trading volume, and the popular Financial Sector SPDR Select ETF (XLF 0.20%) only slightly trailed the broader market with a 0.1% dip. Gold prices held steady, which didn't stop the volatile bullish bet on the precious metal, Direxion Daily Junior Gold Miners Bull 3X ETF (JNUG 6.34%), from rising 0.8%.
As for individual stocks, Newell Brands (NWL -1.72%) and Tyson Foods (TSN -0.77%) attracted heavy investor interest following their quarterly earnings reports.
Image source: Getty Images.
Newell Brands' rising profits
Shares of Newell Brands shot up 12% after the consumer products specialist posted surprisingly strong first-quarter results. Sales jumped 148% to $3.3 billion, edging consensus estimates that were targeting $3.2 billion of revenue. Newell also beat profit forecasts, as adjusted earnings came in at $0.34 per share compared to the $0.29 per share that Wall Street expected.
The sales spike came almost entirely from the company's purchase of the Jarden business that added brands like Rawlings and Mr. Coffee to a portfolio that already includes hit franchises such as Rubbermaid, Sharpie, and Coleman. Yet Newell's organic growth pace was a healthy 2.5%, as well -- right on pace with management's forecast.
Image source: Newell Brands.
Profitability fell thanks to the addition of the lower-margin Jarden business, but the drop wasn't as bad as Newell expected. "Our operating margin was well ahead of plan driven by strong cost synergies and stringent discretionary cost management," CEO Michael Polk said in a press release.
Executives are still targeting organic sales growth of between 2.5% and 4% for the full fiscal year, but now see profit rising at a faster clip. Normalized earnings should be between $3.00 and $3.20 per share, up from prior guidance of $2.95 to $3.15 per share.
Tyson Foods' operating stumbles
Shares of Tyson Foods dropped 6% following the release of the company's fiscal second-quarter earnings report. The meat giant announced a small uptick in revenue despite a drop in volume across its beef, pork, chicken, and prepared foods segments. Even with the volume slip, though, higher prices led to increased profitability, especially in the pork business, where first-half operating margin has spiked to 15.2% of sales from 12.4% last year. "Our beef and pork segments generated tremendous operating income in the second quarter," CEO Tom Hayes said in a press release, "allowing us to invest in the long-term growth of our value-added businesses."
Image source: Getty Images.
Results were hurt by a few operational issues during the quarter, including fires in two chicken plants that helped push operating margin down to 8.3% in the segment from 12.7% a year ago. Tyson's prepared foods segment also saw its profits dive to $87 million from $197 million due to what management described as "on-going challenges" in the pizza toppings and ingredients niche.
Tyson believes these issues are temporary and won't get in the way of it posting adjusted earnings of $4.90 to $5.05 per share, which would represent 12% growth at the midpoint of guidance. As for revenue, executives say they'll see flat sales in 2017 as broad volume gains are offset by lower beef prices.
