The U.S. stock market turned in a mixed-bag performance on Friday as investors digested tumult between tensions with North Korea, continued political strife in Washington, and increasingly degrees of clarity about where in Florida Hurricane Irma would strike the hardest. When all was said and done, the Dow Jones Industrial Average (DJINDICES:^DJI) eked out a small gain while the S&P 500 (SNPINDEX:^GSPC) dropped less than four points.
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Financials stocks climbed Friday, with the Financial Select Sector SPDR Fund (NYSEMKT:XLF) up 0.9%, a rebound after Thursday's concerns over the effects Harvey and Irma might have on insurers. Meanwhile, oil stocks endured a rough session, with the SPDR S&P Oil & Gas Exploration and Production ETF (NYSEMKT:XOP) falling 2.8%.
As for individual stocks, a massive data security lapse sent shares of Equifax (NYSE:EFX) plunging, while disappointing earnings news from Smith & Wesson parent American Outdoor Brands (NASDAQ:SWBI) left the gunmaker reeling.
Equifax's big breach
Equifax stock dropped 13.9% today after the consumer credit reporting agency announced a "cybersecurity incident" which potentially impacts 143 million U.S. consumers.
More specifically, Equifax said: "Criminals exploited a U.S. website application vulnerability to gain access to certain files" between mid May through July 2017. That information includes names, birth dates, Social Security numbers, addresses, and some driver's license numbers. Credit card numbers for roughly 209,000 people were also accessed, along with "certain dispute documents with personal identifying information" for around 182,000 consumers. Finally, Equifax found evidence of unauthorized access to "limited personal information" for some UK and Canada residents.
Equifax further noted the breach was discovered and stopped on July 29, after which it promptly hired a leading cybersecurity firm to determine the intrusion's scope and specific data affected. That firm's investigation is ongoing, but now "substantially complete" -- hence Friday's announcement -- and should be fully completed "in the coming weeks."
Equifax Chairman and CEO Richard Smith stated:
This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do. We price ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations. We also are focused on consumer protection and have developed a comprehensive portfolio of services to support all U.S. consumers, regardless of whether they were impacted by this incident.
American Outdoor Brands' earnings misfire
Meanwhile, shares of American Outdoor Brands -- formerly known as Smith & Wesson until it changed its name this year to reflect its growing scope of business -- dropped 17.8% today after the company announced painful fiscal first-quarter 2018 results.
Revenue declined 37.7% year over year to $129 million, which translated to a GAAP net loss of $2.2 million, or $0.04 per share. On an adjusted (non-GAAP) basis, which adds perspective by excluding items like acquisition costs and discontinued operations, American Outdoor Brands generated net income of $1.2 million, or $0.02 per share, down from earnings of $0.62 per share in the same year-ago period. Analysts, on average, were expecting significantly higher adjusted earnings of $0.11 per share.
"Our financial results for the first quarter reflected lower than anticipated shipments in our Firearms business," explained CEO James Debney, "consistent with a softening in wholesaler and retailer orders, partially offset by increased revenue from our Outdoor Products & Accessories business, which grew organically at 11.4% and which more than doubled in organically."
Debney also noted that sales faced a tough comparison to last year's fiscal Q1, which benefited from the perceived risk ahead of the 2016 election that Democratic wins might lead to stricter regulations on firearms sales.