The stock market had an up-and-down day on Tuesday, with early gains giving way to small losses for most major benchmarks by the end of the session. Despite the modest declines, indexes remain near record highs, and even the ongoing back-and-forth of trade-related comments -- both conciliatory and threatening -- hasn't done anything more than put a minor dent in a major advance for stocks in the third quarter. Yet some companies suffered from bad news. CenturyLink (NYSE:LUMN), Jabil (NYSE:JBL), and Neogen (NASDAQ:NEOG) were among the worst performers on the day. Here's why they did so poorly.
CenturyLink loses a key executive
Shares of CenturyLink dropped 8% on news that the company's chief financial officer is leaving to work at a competing player in the telecom industry. CFO Sunit Patel left in order to pursue opportunities at T-Mobile US (NASDAQ:TMUS), which is in the midst of working out merger details with fellow wireless carrier Sprint. For T-Mobile, the news is good, as Patel has demonstrated his ability to manage the challenges involved in integrating formerly separate companies and realizing the potential synergies from the combination. Yet CenturyLink arguably still has work to do to make the most of its own recent merger with Level 3 Communications, and Patel's departure raises questions about how CenturyLink can best move forward.
Jabil faces a long-term struggle
Jabil stock lost 7% in the wake of the electronics manufacturer's fiscal fourth-quarter financial report. The company said that strong performance in its diversified and electronics manufacturing services divisions helped to power top-line growth, and successful results in core earnings and return on invested capital showed the strength of the overall business. Yet investors concentrated on CEO Mark Mondello's comments that the company expects not to see any improvement in its margin figures, as increased spending will be necessary to promote overall growth. Shareholders don't like the lack of leverage that decision implies is needed, and with investors potentially having to wait until fiscal 2022 to see significant margin improvement, some seem unwilling stick around.
Neogen grows, but shareholders are unimpressed
Finally, shares of Neogen lost 16%. The food and animal safety specialist said that sales were higher by 6% to $99.6 million, with net income rising by 28%. Yet although Neogen had good sales of tests for foodborne pathogens and sanitation, CEO John Adent noted that "the first quarter presented pricing and supply challenges to the global animal protein sector that we serve, including the dairy and swine markets." Neogen remains convinced that globalization holds the key to its future expansion, and outbreaks of foodborne illness continue to show the value of its testing services. But investors seem nervous about whether the company can turn early initial successes in areas like Brazil, Mexico, China, India, and Europe into more sustained pathways to growth.