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Why J.B. Hunt, Bank of America, and Boston Scientific Slumped Today

By Steve Symington – Apr 16, 2019 at 4:22PM

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These three stocks fell as the broader market climbed.

Stocks gained on Tuesday as largely positive quarterly earnings reports continued to roll in. Both the Dow Jones Industrial Average and S&P 500 climbed modestly.

But the rising tide didn't lift all boats. J.B. Hunt (JBHT 1.24%) dropped following a disappointing quarter, Bank of America (BAC 0.24%) lagged in the wake of its own mixed earnings report, and Boston Scientific (BSX 0.59%) slumped after one of its products raised the ire of the U.S. Food and Drug Administration (FDA).

Up and down arrows superimposed over blue background with columns of numbers showing stock returns

Image source: Getty Images.

J.B. Hunt earnings hit the brakes

Shares of J.B. Hunt Transport Services dropped 4.9% after the trucking company announced underwhelming first-quarter 2019 results. Quarterly revenue climbed 7% year over year (or 8% excluding fuel surcharges) to $2.09 billion, translating into a roughly 2% increase in earnings per share to $1.09.

Analysts, on average, were expecting earnings of $1.26 per share on revenue of $2.21 billion.

During the subsequent conference call, CFO David Mee primarily blamed soft volumes at the company's core intermodal segment, where revenue climbed just 2% to $1.09 billion, due to a combination of expected rail lane closures and a deceleration in demand given weather-related service disruptions. 

Intermodal segment President Terrence Matthews added the company's business on the West Coast was slower than expected, in part due to lower volumes of Chinese goods thanks to the threat of potential tariffs that were supposed to be implemented on March 1, 2019. 

The caveat to Bank of America's solid earnings

Shares of Bank of America fell as much as 3% early in the session, then recovered late in the afternoon to close basically flat after the company posted strong quarterly earnings but lighter-than-expected revenue.

Revenue edged lower from the year-ago period to $23 billion, translating into a 6% increase in net income to $7.3 billion, and 12.9% growth in net income per share to $0.70. Most analysts were looking for earnings of $0.65 per share on higher revenue of $23.3 billion. 

"Economic growth and consumer activity in the U.S. continue to be solid, businesses of every size are borrowing and driving the economy, and asset quality is strong," stated CEO Brian Moynihan. "It was a challenging capital markets environment but our team and platform are optimized to serve clients and generate stable revenues across a range of market conditions over time."

The FDA cracks down on surgical mesh

Finally, shares of Boston Scientific slumped 4.3% after the FDA ordered the medical device specialist to stop selling surgical mesh products for certain pelvic operations in the United States.

In a press release issued this afternoon, the government agency says it has determined that two manufacturers -- Boston Scientific and Coloplast -- "have not demonstrated a reasonable assurance of safety and effectiveness" for their surgical mesh products used in transvaginal repair of pelvic organ prolapse (POP).

As such, both companies have 10 days to submit plans to withdraw their respective products from the market.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Bank of America Stock Quote
Bank of America
$37.70 (0.24%) $0.09
Boston Scientific Stock Quote
Boston Scientific
$44.15 (0.59%) $0.26
J.B. Hunt Transport Services Stock Quote
J.B. Hunt Transport Services
$182.60 (1.24%) $2.24

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