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These 2 Stocks Could Threaten Tuesday's Market Bounce

By Dan Caplinger – Jan 11, 2022 at 9:06AM

Key Points

  • Markets tried to mount a comeback on Tuesday morning.
  • Shares of Pacific Biosciences and TechnipFMC, however, were trending lower.
  • Both stock moves have broader implications for their respective industries.

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Investors are trying to get on an even keel after a rough start to 2022.

Investors have been surprised by the way 2022 has started, with steep drops on most stock market indexes. Wall Street tried to mount a comeback on Tuesday morning, though, in the hopes of getting back on a bullish path. As of 8:30 a.m. ET, Dow Jones Industrial Average (^DJI 1.00%) futures were up 63 points to 36,015. S&P 500 (^GSPC 1.42%) futures had picked up 15 points to 4,678, while Nasdaq Composite (^IXIC) futures had risen 79 points to 15,687.

It was encouraging to see the overall market try to bounce, but there were still some stock-specific stories that threatened to rain on Wall Street's parade. Pacific Biosciences of California (PACB 4.93%) and TechnipFMC (FTI 2.26%) both posted sharp declines in premarket trading as shareholders responded to the latest news from the two companies. Below, you'll learn more about both companies and what their results could mean for the broader market.

Scientist in lab looking through microscope.

Image source: Getty Images.

PacBio's growth is not enough

Shares of Pacific Biosciences were down more than 10% Tuesday morning. The biotech company announced preliminary fourth-quarter results that showed continuing signs of growth, but the numbers weren't sufficiently strong to give shareholders what they had hoped to see.

PacBio's numbers didn't look bad on their face. The company said it expects fourth-quarter revenue to come in at $36 million, up 33% from year-ago levels. That will bring full-year 2021 sales growth to 65%, with a final figure of $130.5 million. PacBio said it put 48 of its Sequel II/IIe systems in place for clients during the quarter, a record number and higher by 13 systems from the same period in 2020.

Enhancements to Sequel II/IIe are a key part of PacBio's overall strategy. The company expects to release improvements to the system in the first half of 2022, and it will also launch new prep and sequencing kits for the system to give users greater access to samples with reduced workflow.

Yet even though PacBio also announced interesting collaborations with some of its biotech peers as well as Alphabet's (GOOGL 0.36%) (GOOG 0.53%) Google, shareholders remained unimpressed with the extent of the genomics company's turnaround efforts. That's been a theme for many companies in the past couple of months, and it could continue well into 2022 if investors remain convinced that valuations in the stock market are stretched.

Technip makes a sale

Elsewhere, shares of TechnipFMC were down 6% in premarket trading. The energy-tech provider announced a sale of a portion of its holdings in a key affiliated company.

TechnipFMC has held a stake in Technip Energies, which is a leading engineering and technology company for the transition from fossil fuels to more renewable energy sources. The unit is an important hedge against the more oil and gas-based business that TechnipFMC has historically pursued, and the renewable energy engineering company's stock is listed on the Paris Stock Exchange as well as available for pink-sheet trading in the U.S. market.

However, TechnipFMC announced it had sold 9 million shares of Technip Energies to private buyers, including Technip Energies itself. The stake sold represented 5% of Technip Energies' outstanding stock, and after the sale, TechnipFMC's own holdings have fallen to just 7%.

With investors turning away from fossil-fuel companies to focus more on businesses working with electricity and renewable power, TechnipFMC might have trouble keeping its shareholders happy. Selling off renewable-oriented holdings seems like exactly the wrong direction for an energy company right now.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dan Caplinger owns Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy.

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