Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Stock Market News Today: Sept. 26, 2019

By Timothy Green - Sep 26, 2019 at 3:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Carnival discloses a slowdown in booking trends, and FactSet predicts flat earnings.

The stock market was squarely lower on Thursday afternoon, with all the major indices suffering losses. The impeachment inquiry continued to play out in the background, as did the U.S.-China trade war.

Index

Change at 1:30 p.m. EDT

Dow Jones Industrial Average ( ^DJI 0.01% )

(0.39%)

S&P 500 ( ^GSPC 0.29% )

(0.46%)

Nasdaq Composite ( ^IXIC -0.16% )

(0.87%)

Data source: Yahoo! Finance.

A combination of a weak market and disappointing guidance led investors to punish shares of Carnival Corp. ( CCL -4.17% ) and FactSet Research Systems ( FDS -0.16% ). Here's what happened.

Carnival warns about sluggish booking trends

Shares of cruise-ship operator Carnival have been in a funk since the beginning of 2018, and the company's third-quarter report did nothing to change that. While Carnival reported solid revenue growth and easily beat analyst estimates across the board, a warning about booking trends for 2020 was not well received. The stock was down about 8.7% at 1:30 p.m. EDT.

While cumulative advanced bookings for the first half of 2020 are ahead of the prior-year's pace, the company has experienced lower-than-expected booking volumes and prices since June. Given the uncertainty created by trade tensions and recession fears, it's not surprising that consumers are holding off on booking cruises.

The cruise-ship Queen Mary II on the water.

Image source: Carnival.

For the fourth quarter of this year, Carnival expects to produce sharply lower profits. The company sees adjusted earnings per share between $0.46 and $0.50, down from $0.70 in the prior-year period. Weather disruptions, a ship delivery delay, and a U.S. policy change on travel to Cuba will all weigh on the bottom line.

"As a truly global cruise company, with nearly 50 percent of our guests sourced outside of the U.S., we are facing a number of current headwinds, including weakening economies affecting our Europe and Asia segment, a strong dollar and of course, the IMO 2020 regulations, and we are working to mitigate them," said Carnival CEO Arnold Donald.

Those headwinds were enough on Thursday for investors to push down the stock.

FactSet Research disappoints investors

Like Carnival, financial data and software provider FactSet Research put up solid quarterly numbers but whiffed on guidance. FactSet's fiscal fourth-quarter results came in ahead of analyst estimates, but the company's outlook for fiscal 2020 left a lot to be desired. The stock was down 11.3% at 1:30 p.m. EDT.

FactSet produced revenue of $364.3 million and adjusted earnings per share (EPS) of $2.61 in the fourth quarter, up 5.3% and 18.6%, respectively. The content and technology solutions segment and the wealth segment were star performers, with annual subscription value rising 15% and 9.6%, respectively.

While fiscal 2019 was a good year for the company, fiscal 2020 is looking a little less rosy. FactSet expects to generate revenue between $1.49 billion and $1.50 billion, up just 4.2% and below the consensus analyst estimate of $1.51 billion. Adjusted EPS is expected between $9.85 and $10.15, flat from fiscal 2019 and well below analyst expectations of $10.51.

With earnings growth set to grind to a halt, a price-to-earnings ratio in the high 20s has become difficult for investors to justify.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Carnival Corporation Stock Quote
Carnival Corporation
CCL
$16.89 (-4.17%) $0.73
FactSet Research Systems Inc. Stock Quote
FactSet Research Systems Inc.
FDS
$467.81 (-0.16%) $0.76
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$34,487.42 (0.01%) $3.70
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,580.40 (0.29%) $13.40
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$15,512.48 (-0.16%) $-25.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.