It was another dreadful day for stocks Thursday as markets around the world declined on worries of slowing growth. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) have given up almost all their gains from earlier in the week.

Today's stock market

Index Percentage Change Point Change
Dow (1.27%) (327.23)
S&P 500 (1.44%) (40.43)

Data source: Yahoo! Finance.

Transportation stocks were among the weakest names today, with the SPDR S&P Transportation ETF (NYSEMKT:XTN) tumbling 3.1%. Growth stocks in the technology sector that were hit hard last week resumed their decline; the PowerShares NASDAQ Internet ETF (NASDAQ:PNQI) fell 3.2%.

As for individual stocks, Philip Morris International (NYSE:PM) was a rare bright spot after the company reported earnings, and Textron (NYSE:TXT) fell on disappointing results.

Falling stock graph with a blue background

Image source: Getty Images.

Philip Morris beats expectations

Tobacco giant Philip Morris International reported third-quarter results that exceeded expectations and the stock rose 3.5%. Revenue increased 0.4% to $7.5 billion and earnings per share jumped 13.4% to $1.44. Analysts were expecting the company to earn $1.27 per share on revenue of $7.16 billion. 

Excluding currency effects, revenue increased 3.3%. Unit volumes fell 2.1%, with cigarette shipment volume down 1.7% and shipments of the company's heat-not-burn product down 11%. Philip Morris said that excluding the impact of estimated distributor inventory movements, total unit shipment volume would have been up 1.1%. Thanks to favorable pricing variance, adjusted operating income margin, excluding currency, increased by 1.8 percentage points to 43.1%.

"Our third-quarter results demonstrate that our underlying business performance is in good shape," said CEO Andre Calantzopoulos in the press release. "Excluding distributor inventory movements, our total shipment volume was up in the quarter and year-to-date, reflecting the continued growth of our heat-not-burn products as well as the solid performance of our combustible products. Our total market share was up by 0.5 and 0.6 points in the quarter and year-to-date, respectively."

Looking forward, Philip Morris reaffirmed its full-year EPS guidance of $4.97 to $5.02, which at the midpoint would be a 5.8% increase over adjusted 2017 EPS. Although volumes shrunk, they did so at less than the industry's rate and with strong pricing, which was enough to lift the stock today. 

ATVs get Textron off the road

Shares of defense and industrial conglomerate Textron tumbled 11.3% after the company reported third-quarter results that missed expectations badly, largely because of issues in its non-military business. Revenue fell 8.2% to $3.2 billion, compared with analyst expectations for a 1.3% increase. GAAP earnings per share came in at $2.26, boosted by the sale of the company's tools and test product line, but non-GAAP EPS fell 6.2% to $0.61, well below the $0.76 Wall Street was looking for.

Revenue from all of the company's segments declined, but mostly due to expected reasons. Revenue from Textron Systems fell 23.2%, largely because the company is nearing the end of its Tactical Armored Patrol Vehicle program. Industrial segment revenue was down 10.7% due to the divestiture. Bell revenue fell 5.2% and Textron Aviation was down 1.8%.

Company officials on the conference call expressed disappointment with execution by the business producing specialty vehicles for consumer markets. The unit has been integrating Textron's acquisition of Arctic Cat, and the roll-out of a new line of all-terrain vehicles failed to generate expected levels of sell-through due to poor channel management. Textron replaced the manager of the segment last week. 

Looking forward, Textron narrowed full-year EPS guidance to $3.20-$3.30, keeping the midpoint in line with previous guidance.

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