The stock market was mixed to start the week on Monday, as investors seemed more comfortable waiting to find out what Federal Reserve chair Jerome Powell will say later in the week about the state of the U.S. economy and the central bank's approach to interest rates.
The Dow Jones Industrial Average (^DJI +1.79%) and S&P 500 (^GSPC +1.20%) managed to gain ground on the day, but the Nasdaq Composite (^IXIC +1.52%) fell back slightly.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
+0.12% |
+40 |
|
S&P 500 |
+0.07% |
+3 |
|
Nasdaq |
(0.11%) |
(13) |
Data source: Yahoo! Finance.
After the market closed, a pair of stocks fell sharply. Calavo Growers (CVGW +1.88%) is well known for its avocado production, and its quarterly financial results weren't good enough to keep investors satisfied. Meanwhile, Cara Therapeutics (CARA +0.00%) suffered an even bigger decline after its latest business report. You'll get the full scoop on both falling stocks below.
Calavo stock spoils
Shares of Calavo Growers fell 17% in after-hours trading late Monday. The avocado grower's fiscal first-quarter financial results for the period ending Jan. 31 saw big declines in key business metrics that demonstrated the massive challenges the company is facing right now.
Image source: Getty Images.
Calavo's fiscal first-quarter results included an 18% drop in revenue year over year to $226 million. Although gross profit actually improved slightly from the year-ago period, adjusted net losses came in at $1.4 million, which was worse than in last year's quarter and worked out to $0.08 per share.
NASDAQ: CVGW
Key Data Points
The biggest headwinds to Calavo's business came from its grown-goods segment, where sales plunged 27% from year-ago levels. By comparison, the prepared-foods segment did reasonably well, with segment revenue falling just 3% compared to the same period a year ago.
Calavo cited low avocado prices due to higher volumes of avocado production from Mexico. In the prepared-foods segment, weaker consumer purchase volume and high operating costs due to winter weather that caused temporary factory closures also weighed on results.
Just about the only good news from Calavo was that avocado prices began to recover in February, and the company expects that it will see margins within its targeted range for the fiscal second quarter.
However, as long as supplies from Mexico flood the market, there's danger for Calavo's business, and investors weren't happy with relatively negative guidance for profits for the full 2023 fiscal year. With the decline, Calavo stock trades near its worst levels in the past decade.
Cara keeps sliding
The drop in Cara Therapeutics stock was even more severe, plummeting 27% in after-hours trading. Investors had higher hopes for the biopharmaceutical company's rollout of injections of its Korsuva treatment for pruritus and its potential effect on Cara's financials.
Cara's fourth-quarter results showed the slow gains from the rollout. Total revenue was just $3.26 million, although that was well above the $821,000 from the year-ago period. With continuing significant operating expenses of almost $35 million, Cara lost more than $30 million for the quarter, bringing its full-year 2022 losses to $85.5 million. Both figures were only a bit less than the losses in the same periods in 2021.
NASDAQ: CARA
Key Data Points
CEO Christopher Posner was still hopeful that 2023 will improve. Cara expects to accelerate global launches of Korsuva as well as its Kapruvia treatment for dialysis-related itchy skin, and the biotech stock's pipeline remains somewhat encouraging.
Cara also didn't give the most positive guidance, and even with Korsuva finally bringing in revenue, the company was only willing to say that it could fund currently planned operations into the first half of 2024. That leaves a lot of uncertainty for Cara shareholders, justifying a further move to multiyear lows.
