Stocks rose on Monday, with the Dow Jones Industrial Average (^DJI 0.15%) and the S&P 500 (^GSPC +0.80%) indexes each finishing higher by nearly 0.5%.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
0.41% |
85.33 |
|
S&P 500 |
0.48% |
11.42 |
Data source: Yahoo! Finance.
Financial stocks led all sectors in trading volume, and the Financial Select Sector SPDR ETF (XLF +0.75%) outperformed the broader market, logging a 0.8% increase. Gold prices ticked up only slightly, which kept the bullish bet on the precious metal, the VanEck Vectors Gold Miners ETF (GDX 2.96%), nearly flat for the day.
Image source: Getty Images.
As for individual stocks, Trivago (TRVG +3.00%) and Forterra (FRTA +0.00%) made big moves following the companies' quarterly earnings reports.
Trivago takes a trip
Shares of Germany-based online hotel searching platform Trivago gained nearly 12% following quarterly results that showed a 68% spike in revenue even as the company expanded profitability. Wall Street applauded a 60% jump in shopper traffic that was enhanced by improved efficiency in translating hotel browsers into buyers. In addition, Trivago benefited from surging demand from hotel advertisers, particularly those targeting mobile shoppers.
Image source: Getty Images.
Adjusted earnings rose to 7.2% of sales from 4.8% a year ago, and that boost helped the company book positive net earnings after three straight quarters of losses. In an investor presentation, management explained that a portion of its efficiency gain might be a temporary effect of advertisers optimizing their bidding strategies to perform better with Trivago's new display platform. "We expect that ... these positive revenue effects will be partially mitigated over time," management noted.
However, most of the gains will likely stick around. "The improvements in profitability were principally driven by the scaling of the business and our continuous improvements of our technology and algorithms, which we expect to continue to benefit from in the future," Chief Financial Officer Axel Hefer said. Trivago's full-year forecast calls for revenue growth of roughly 50% as profit margins rise slightly.
Forterra springs a leak
Forterra stock plunged over 24% after the drainage and water pipe specialist posted surprisingly weak first-quarter results and issued soft guidance for the current quarter. Net sales excluding acquisitions declined to $175.3 million from $187 million, which the company blamed on several factors, including project delays, lower selling prices, and unfavorable weather as compared to the year-ago period. Gross profit margin slumped to 11.5% of sales from 19% a year ago, mainly due to increased competition in its key Houston market. That drop combined with spiking costs on labor, freight, raw materials, and property to generate a net loss of $22.5 million compared to a loss of $3.9 million a year ago.
"Our financial performance is disappointing this quarter," CEO Jeff Bradley said in a press release, "but we do not believe it is representative of the long-term strength of our business and our competitive position in the industry."
Bradley and his team do think the same negative trends that pinched results this quarter will impact the second quarter, and so they lowered their Q2 forecast on both the top and bottom lines. Forterra aims to return to healthier growth beginning in the third quarter when it begins rolling out price increases. Executives hope demand will be more robust by then. Otherwise, the hikes could add even more pressure to Forterra's sales growth outlook.
