Wall Street ended the first day of the new month with mixed performance, giving up gains early in the session that stemmed from hope for continued U.S. economic strength. A favorable jobs report prompted the move upward, but over the course of the day, concerns about earnings and other worries ate into that early advance. By the end, most major indexes were little changed, and some stocks were sharply lower. Sony (SONY 0.72%), Papa John's International (PZZA -0.68%), and Wesco Aircraft Holdings (WAIR) were among the worst performers. Here's why they did so poorly.
Check out the latest Wesco and Papa John's earnings call transcripts.
Is Sony losing the game?
Shares of Sony fell 8% after the entertainment giant reported its fiscal third-quarter financial results. The Japanese company said that sales fell 10% from year-ago levels, but earnings jumped 45%, lifted largely by the strength of its music business. Although sales from the key game and network services division were up substantially, operating income was down double-digit percentages from the year-earlier period, and bad results in mobile communications, semiconductors, and financial services all weighed on the conglomerate's performance. The differences in results point to the possible benefits a breakup might have on Sony's widely disparate business lines.
Image source: Sony.
Papa John's keeps looking for answers
Papa John's International saw its stock drop another 9%, adding to recent losses after the company considered a new set of strategic moves. After getting rid of founder John Schnatter, Papa John's had looked at a potential sale of the entire pizza chain. However, reports now suggest that a full sale is unlikely to occur, and instead, the company's insiders are looking at alternatives like a major investment from a private equity company. Given that Schnatter retains 30% ownership of the stock, any such move could start an internal struggle. More importantly, even as Papa John's has struggled through its uncertainties, some competitors have eaten its lunch.
Wesco loses altitude
Finally, shares of Wesco Aircraft Holdings closed lower by nearly 10%. The aerospace supply chain management specialist posted reasonably good results in its fiscal first quarter, including a 9% rise in sales and net income that reversed a loss in the year-earlier period. Yet investors remain nervous about the impact that Boeing's acquisition of Wesco competitor KLX's aerospace solutions group last October will have on the long-term competitive dynamics in the industry. For its part, Wesco's guidance shows continued confidence in the company's ability to maintain growth throughout fiscal 2019 -- even if shareholders don't seem to share it.
