Wednesday was generally a positive day on Wall Street, as top officials at the Federal Reserve reassured investors that hoped-for interest rate cuts would likely come in the near future. The central bank has shifted quickly from its rate-tightening bias that prevailed throughout 2017 and 2018, and even with conflicting readings on economic growth, Fed officials seem to be more cautious about the future. Yet some bad news hit several companies hard, sending their shares down sharply. Micro Focus International (MFGP), MSC Industrial Direct (MSM -0.59%), and Amneal Pharmaceuticals (AMRX 1.42%) were among the worst performers. Here's why they did so poorly.
Micro Focus sees sales slump
Shares of Micro Focus International fell 10% after the infrastructure software specialist released its interim financial results for the first half of its 2019 fiscal year. Revenue was down more than 5% from the year-ago period, and investors weren't entirely satisfied with growth in earnings per share of 8% on an adjusted basis. In addition, Micro Focus said that it's had some challenges in integrating the software business it recently acquired from Hewlett Packard Enterprise. Shareholders are still hopeful that the company will meet its full-year guidance, but they also want to see signs of better performance in the years to come.
MSC Industrial takes an earnings hit
MSC Industrial Direct saw its stock drop 4% following its release of its third-quarter financial report. Revenue climbed almost 5% compared to the year-ago quarter, with more than half of those gains coming from acquisitions. However, operating income was down slightly over the same period, and CEO Erik Gershwind pointed to falling demand and negative impacts from tariffs and trade concerns in weighing down MSC's business. Despite the company announcing plans to boost efficiency and implement cost controls, investors seem concerned about MSC's future, and even a 19% dividend increase wasn't enough to boost the stock.
Amneal gets real
Finally, shares of Amneal Pharmaceuticals plunged 36%. The drug company said that it would implement a major restructuring plan, responding to tough conditions in the generic drug market. CEO Rob Stewart expressed his disappointment at how long it has taken for its product pipeline to produce the value he anticipates, and rising competition in generics has eaten away at profit opportunities. Amneal hopes to slash annual spending by roughly $50 million, but whether that'll be enough to help the company work through the attacks that drugmakers across the industry are getting from lawmakers and regulators is far from clear.