Major market benchmarks continued to march higher on Monday, with both the Dow Jones Industrial Average and the S&P 500 enjoying small gains to start the week.
Lannett loses a key contract
Shares of Lannett plunged 60.4% after the pharmaceutical product company announced its distribution agreement with Jerome Stevens Pharmaceuticals will not be renewed when it expires next March. This means that Lannett will no longer distribute JSP products including "Butalbital, Aspirin, Caffeine with Codein Phosphate Capsules USP, Digoxin Tablets USP and Levothyroxine Sodium Tablets USP."
"While we are disappointed, and intend to redouble our continuing efforts to explore options for addressing our capital structure, we have been preparing for this contingency, knowing that this outcome was a possibility," stated CEO Tim Crew. "Accordingly, we have been focused on improving our already strong base commercial business of more than 100 currently marketed products."
In the meantime, however, Lannett expects net sales in its current fiscal fourth quarter to be $171 million, which should translate to adjusted net income per share of $0.62 to $0.64. Most analysts on Wall Street were expecting higher quarterly earnings of $0.66 per share on sales of $173.5 million.
EA's Battlefield woes
Electronic Arts stock fell as much as 2%, then partially recovered to close down 0.23% after an analyst offered words of caution surrounding the video game giant.
Cowen's Doug Creutz reiterated his market perform rating and $114 price target on Electronic Arts -- a roughly 11% discount from today's closing price -- noting that preorders of its upcoming Battlefield V title are trailing 85% below those of Activision Blizzard's Call of Duty: Black Ops 4. Battlefield V is set to be released on Oct. 12, 2018, exactly one week before Activision's competing title.
Of course, it's not uncommon for EA's war-centric franchise to lag Activision's flagship titles. But Creutz also noted that preorders of Battlefield 3 and 4 at this stage "only" trailed previous competing Call of Duty versions by 20% in 2013 and 40% in 2016, respectively. As such, he believes that EA may not be able to live up to its latest fiscal 2019 guidance.