Today's stock market
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Financial shares led the market as long-term interest rates rose; the SPDR S&P Bank ETF (NYSEMKT:KBE) added 1.3%. Gold continued its decline of recent months, and the VanEck Vectors Gold Miners ETF (NYSEMKT:GDX) closed down 2.1%.
Hasbro investors have a little fun
Hasbro reported second-quarter earnings that easily blew through analysts estimates, sending shares soaring 12.9%. Revenue fell 7% to $904 million and earnings per share dropped 9.4% to $0.48. Analysts were expecting the company to earn only $0.29 per share on sales of $833 million.
Revenue in the U.S. and Canada fell 7% to $459 million as the market was disrupted by the liquidation of Toys R US inventory. International sales fell 11% to $380 million as excess inventory was cleared out of the European retail channel, where consumer behavior is rapidly shifting to online purchasing. Revenue from the entertaining and licensing segment increased 26% to $65 million.
Hasbro's gaming category was particularly strong, with revenue growing 14% to $313 million, thanks to success with Magic: The Gathering and Monopoly. The company's Marvel toy lines also delivered revenue growth from movie tie-ins such as Avengers: Infinity War, Black Panther, Deadpool, and Ant-Man and the Wasp.
Whereas the company's revenue decreased from last year, point of sale increased and inventory fell, pointing to improved performance in future quarters. Hasbro has said that the impact of Toys R Us would be concentrated in the first half of the year, and investors took second-quarter results as a sign the worst is over.
Halliburton tumbles on weak outlook for the second half
Shares of oil services provider Halliburton fell 8.1% after the company beat expectations for revenue on Q2, but gave a lower-than-expected outlook for the second half of the year. Revenue increased 24% to $6.15 billion, compared with the $6.11 billion observers were expecting, and earnings per share came in at $0.58, matching the analyst consensus. On the conference call, CEO Jeff Miller said the company expects Q3 EPS to be about flat with Q2, but analysts had been expecting $0.10 more.
Compared with the first quarter, revenue by the completion and production segment increased 9% to $4.2 billion, and operating income grew 34%. Drilling and evaluation revenue was up 3% sequentially with a 2% gain in operating income. North American revenue grew 9% due to increased onshore drilling activity, and international revenue increased 4%.
The disappointing profit forecast for next quarter was due partly to a shortage of pipeline capacity in the Permian basin, a growing problem for producers in the region, and cost inflation caused by a shortage of trucks and drivers. Halliburton also said there is a softening of activity in the Marcellus due to producers hitting production targets earlier than planned, a concern that came as a surprise to analysts.
Halliburton officials expressed optimism for 2019, saying that headwinds in the second half were temporary conditions that will set the stage for big gains next year. Investors, however, weren't willing to look past the short-term issues today.