Wednesday was an interesting day on Wall Street, with most major benchmarks finishing the session in the green even after having seen early declines. The Dow Jones Industrial Average had been down triple digits at various points, but favorable news from the Federal Reserve's Open Market Committee suggested that future interest rate increases will continue to come at a slow and manageable pace. Yet even though investors in general were pleased with that overall message, some companies missed out on the gains. General Electric (NYSE:GE), Hewlett-Packard Enterprise (NYSE:HPE), and Red Robin Gourmet Burgers (NASDAQ:RRGB) were among the worst performers on the day. Here's why they did so poorly.
GE promises nothing
Shares of General Electric dropped 7%, giving back all of their gains from earlier in the week and then some. The industrial conglomerate had generated some enthusiasm on news that it would merge its transportation business with industry peer Westinghouse Air Brake Technologies. But today, CEO John Flannery failed to give investors the reassurances they wanted, instead saying that the prospects for its key power unit remain challenged and even refusing to guarantee that the company will be able to sustain its already reduced dividend payout through next year. Without good follow-through from the industrial giant and its leadership, General Electric shareholders have to find it difficult to sustain their confidence in the company's future.
HP Enterprise sees tough times ahead
Hewlett-Packard Enterprise stock fell 10.5% after the company released its fiscal second-quarter financial report. The company's results were solid, including a 10% rise in revenue and adjusted earnings that were above the range that HP Enterprise had provided in its past earnings report. It also boosted its dividend by 50% and increased its guidance for the full fiscal 2018 year by $0.30 to a new range of $1.70 to $1.80 per share. Yet CEO Antonio Neri was somewhat vague on his views about HP Enterprise's prospects for the rest of the year, saying he remains confident about meeting its outlook but pointing toward a potentially difficult second half of the fiscal year. Even with the decline, HP Enterprise shares remain up from where they started 2018.
Red Robin disappoints investors
Finally, shares of Red Robin Gourmet Burgers plunged 18%. The casual-dining burger chain reported fiscal first-quarter results that included flat revenue and a 0.9% drop in comparable-restaurant sales. The company said that average check size was down from year-earlier figures on a comparable basis, offsetting a minimal gain in guest traffic, and adjusted earnings fell more than 20% compared to the fiscal first quarter of 2017. CEO Denny Marie Post tried to make the point that Red Robin is still outpacing many of its casual-dining peers, picking up market share, and efforts to boost delivery and take-out traffic have led to 40% gains in sales from those channels year over year. Yet with the company anticipating less optimistic results for the current quarter than investors had hoped, downward pressure on Red Robin stock looks likely to continue for the foreseeable future.