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Why Align Technology, Goldcorp, and Advanced Micro Devices Slumped Today

By Dan Caplinger – Oct 25, 2018 at 4:34PM

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Find out why these stocks missed the big rally.

Thursday gave hard-hit investors a long-awaited day of reprieve, as market participants finally got a bounce after severe losses throughout much of October. Major benchmarks were sharply higher, with the Dow, S&P 500, and Nasdaq Composite up between 2% and 3%. Overall, many companies posted impressive earnings results, and investors are looking forward to some additional key reports from some of the biggest stocks in the market. Yet earnings news wasn't good for everyone, and Align Technology (ALGN -1.85%), Goldcorp (GG), and Advanced Micro Devices (AMD -1.22%) were among the worst performers on the day. Here's why they did so poorly.

Align gets a little bent out of shape

Shares of Align Technology plunged 20% after the company released its third-quarter financial results. At first glance, the maker of teeth-straightening orthodontic products seemed to have a solid performance, including a revenue increase of more than 30% and a solid gain of more than 20% on its bottom line. Record results for Align's iTero intraoral scanner business contributed to gains, but investors were disappointed that sales of its primary clear-aligning product were down slightly from where they were three months ago. Between promotional discounts, shifts toward lower-margin products, and adverse foreign exchange movements, Align also sees earnings falling sequentially again in the fourth quarter, and shareholders questioned whether the stock had gotten too far ahead of itself in light of the expected short-term slowdown.

Clear tooth-aligning device against a grey background.

Image source: Align Technology.

Goldcorp fails to shine

Goldcorp stock fell nearly 19% in the wake of the gold mining company suffering a loss in the third quarter. The industry giant said that lower production at the Penasquito mine in northwestern Mexico played a pivotal role in bringing total gold production for the quarter down 130,000 ounces to 503,000 ounces. Goldcorp also had to deal with all-in sustaining costs that jumped by more than $170 per ounce, approaching the $1,000-per-ounce mark and raising concerns among long-term investors. Goldcorp insisted that it believes fourth-quarter costs should drop back toward $750 per ounce once Penasquito starts processing better-grade ore, but shareholders have decided to stay in wait-and-see mode until results become clearer.

AMD has a chip on its shoulder

Finally, shares of Advanced Micro Devices finished lower by 15.5%. The chipmaker saw growth in sales during the third quarter of 2018 slow to just a 4% pace year over year, and a sequential decline called into question the big boom that AMD stock has enjoyed recently. Adjusted earnings growth was strong, but guidance for the fourth quarter came as a shock, with expected revenue gains of just 8% falling well short of what those following the company were expecting. Even with today's drop, AMD shares are still up 60% for 2018 so far, but some see the possibility of even more losses ahead if some of the favorable trends that have propped up its business disappear.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
AMD
$63.36 (-1.22%) $0.78
Goldcorp Inc. Stock Quote
Goldcorp Inc.
GG
Align Technology, Inc. Stock Quote
Align Technology, Inc.
ALGN
$207.11 (-1.85%) $-3.90

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