Friday was a relatively quiet day on Wall Street as market participants seemed content to hang onto most of their gains from earlier in the week. A dose of reality on the trade front hurt sentiment to some extent, but for the most part, investors still have high hopes about the future of the U.S. economy and the potential for growth among many high-flying companies. However, some stocks still posted significant losses. Gap (NYSE:GPS), Teradata (NYSE:TDC), and Modine Manufacturing (NYSE:MOD) were among the worst performers. Here's why they did so poorly.
Mind the Gap
Shares of Gap fell nearly 8% after the clothing retailer disappointed investors with two downbeat news items. First, Gap's preliminary look at third-quarter financial results wasn't very encouraging, including drops in comparable sales for all three of its key brands. Of potentially more concern was the company's announcement that Art Peck will leave his position as chief executive officer, giving way to board chair Robert Fisher stepping in as interim CEO. Even the Old Navy concept saw a 4% decline in comps, and that made some shareholders nervous about Gap's plans to spin off Old Navy as a separate company. Even as some struggling retailers have managed to turn the corner, Gap isn't showing immediate signs of a turnaround.
Teradata struggles for growth
Teradata's stock plunged 18% following the data analytics specialist's release of third-quarter financial results. Total revenue fell 13% from year-ago levels, with particular weakness in the European and Asia-Pacific regions. Net income also declined 16% year over year. Teradata tried to focus on the positive aspects of its report, noting that as it moves toward a subscription-based business model, recurring revenue climbed 10% compared to last year's third quarter. However, the company is also going through a transition in its executive suite, and although interim CEO Vic Lund believes that initiatives like cloud computing and widening its market reach will pay off, shareholders seem less certain that Teradata is on the right track.
Modine cools off
Finally, shares of Modine Manufacturing plummeted 41%. The thermal management technology company said that its fiscal second-quarter revenue was down 9% compared to year-ago levels, with adjusted earnings dropping by more than 60% year over year. The company attributed the poor results to a tough industry environment that hurt its vehicular, commercial, and industrial businesses. Strength in the building HVAC segment was a welcome sight, but Modine had to reduce its guidance for the rest of the fiscal year. With the company seeing falling revenue throughout the current fiscal year, it could be a while before Modine makes a full recovery.