The stock market once again held its own on Thursday as market participants reacted to the long-awaited release of the Republican tax reform proposal. The major benchmark indexes stayed relatively close to the unchanged mark as investors digested possible changes to the tax code, including lower corporate tax rates, fewer tax brackets, and major revisions to some popular deductions and other tax breaks.
But it was earnings season that continued to play the key role in driving individual stock performances, with both good and bad news coming from various sectors of the market. Tesla (TSLA -5.59%), Newell Brands (NWL -0.14%), and Blue Apron (APRN) 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.
Tesla slows down
Shares of Tesla dropped 7% after the electric vehicle maker reported its third-quarter financial results. The company's net losses were much wider than in the year-ago quarter, as production costs from the release of the Model 3 ramped up substantially. Revenue from the auto segment climbed 10% year over year, but Tesla said that it would likely take three months longer than it had previously expected for Model 3 production rates to reach the company's initial goal of 5,000 units per week. With Tesla saying that its battery module assembly line has been a key bottleneck, some investors worry that the company won't be able to handle the huge demand for its vehicles quickly enough to satisfy customers.
Image source: Tesla.
Newell suffers sluggish back-to-school sales
Newell Brands plunged 27% in the wake of poor performance in Q3. Revenue fell a greater than expected 7% from the year-earlier period as the maker of Rubbermaid storage equipment, Paper Mate pens, and Sharpie markers cited decreased growth rates in its domestic market during the key back-to-school season. Newell also reduced its earnings and revenue guidance for the full year, with the midpoint of the company's bottom-line guidance falling by almost 10%. Shareholders hope that longer-term business transformation efforts from Newell will prove successful, but that possibility was not enough to prevent Thursday's share-price drop.
Blue Apron nearly stops growing
Finally, Blue Apron was down 19%. The meal-kit delivery specialist said in its Q3 financial report that revenue grew just 3% year over year, and its guidance for Q4 suggested that sales could fall on a year-over-year basis by double-digit percentages. Concerns that its business model won't gain long-term traction have only grown in recent months, and even if the meal kit concept avoids flaming out as a passing fad, competitors such as Amazon pose a growing threat to the company. Based on the responses that we've seen throughout the restaurant and food industry, Blue Apron will need to overcome some big challenges if it's going to keep itself moving forward.
