After starting the session in negative territory, major benchmarks turned positive on Tuesday following encouraging comments from Federal Reserve Chairman Jay Powell regarding U.S. economic strength.
But several individual stocks didn't participate in the broader market's gains. Read on to learn why Omnicom Group (NYSE:OMC), UnitedHealth Group (NYSE:UNH), and Goldman Sachs (NYSE:GS) slumped today.
Omnicom's underwhelming quarter
Shares of Omincom Group plunged 9.5% after the marketing communications leader delivered mixed second-quarter results relative to expectations. Quarterly revenue grew 1.8% year over year to $3.86 billion, including organic growth of roughly 2%. On the bottom line, that translated to net income of $364.2 million, or $1.60 per diluted share, up from $1.40 per share in the same year-ago period.
Analysts, on average, were expecting lower earnings of $1.55 per share on higher revenue of $3.90 billion. More specifically, Wall Street was looking for slightly higher organic revenue growth of 2.3% -- which would have closer to the midpoint of Omincom's stated goal for keeping the metric between 2% and 3% for the full year.
Omnicom's growth appears to have suffered in the large North American and U.K. markets, where organic sales fell 0.9% and 2.2%, respectively.
UnitedHealthGroup's beat just wasn't enough
UnitedHealth Group stock slumped 2.6% despite a strong second quarter from the health insurer. Quarterly revenue climbed 12.1% year over year to $56.09 billion, resulting in nearly 28% growth in net income from continuing operations to $2.9 billion, or $3.14 per share. Analysts, on average, were only modeling earnings of $3.04 per share on roughly the same revenue.
UnitedHealth's CEO credited the company's ability to offer "increasing value to more people, driven by strong execution, consistently high quality, deep relationships and our distinctive combination of clinical, technology and information capabilities."
UnitedHealth also increased its full-year 2018 outlook to call for adjusted net income per share in the range of $12.50 to $12.75, up from $12.40 to $12.65 previously. But most investors were already anticipating full-year earnings at the midpoint of that new guidance range. With shares up 34% over the past year, it seems traders are content taking some profits off the table today.
Goldman Sachs underwhelms investors
Shares of Goldman Sachs fell as much as 2% early today, then recovered to close just in the red following the investment bank's announcements of its quarterly results and new CEO.
Regarding the latter, Goldman Sachs confirmed this morning that Lloyd Blankfein will retire as its chairman and CEO on Sept. 30, 2018. Current company President and co-Chief Operating Officer David Solomon will then take the helm as chairman and CEO on Oct. 1, 2018.
On the former, Goldman's second-quarter performance was technically solid. Revenue climbed 19% year over year to $9.4 billion, and earnings arrived at $2.57 billion, or $5.98 per share, up from $3.95 per share in the same year-ago period. Both metrics easily outpaced consensus expectations for earnings of $4.66 per share on revenue of $8.74 billion.
Still, Wall Street frowned at higher legal costs, as non-compensation expenses jumped a greater-than-expected 24% to $2.66 billion. In addition, equities trading revenue remained flat on a year-over-year basis at roughly $1.89 billion -- a trend Goldman blamed on "less favorable market-making conditions" compared to last quarter. However, several bank industry peers have already posted strong gains in their respective equities trading segments, leaving analysts concerned over Goldman's relative underperformance.