Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. Kung fu Pandit
There's something rotten in Citigroup (NYSE: C).
In a pair of stunning resignations, CEO Vikram Pandit and COO John Havens stepped down from the banking giant.
Sure, Citi has burned shareholders who have been there since Pandit took the helm, but it seemed as if the company was starting to turn the corner. Will we ever know what happened behind the scenes?
"Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup," Pandit is quoted as saying in the press release.
Really? Now is the right time? The resignations took place the morning after the company's latest quarterly report and conference call. There was no right time for this shakeout to take place, but a day after a conference call is probably the worst time.
2. Google hits the "I'm Feeling Lucky" button early -- and misses
What's worse than posting a disappointing quarter? Google's (NASDAQ: GOOG) quarterly results were issued hours earlier than they were supposed to be yesterday, leading the stock to tumble and be temporarily halted.
The search giant is blaming R.R. Donnelley & Sons (NASDAQ: RRD), the printing giant that converts paper documents and submits to the SEC on behalf of tens of thousands of corporate clients.
Things got hairier after a report on CNBC claimed that Google had been trying to communicate with analysts before the early leak, nudging them to key on metrics that would make the eventual report more favorable.
The claim -- which CNBC's Jon Fortt says came from people he was speaking to in the financial community -- doesn't make a whole lot of sense. Analysts are pretty bright, on average. They would've seen what Google was trying to do and downgraded the shares. At the very least, Google's shares would be trading near all-time highs ahead of the report.
Either way, Google had a bad quarter.
3. A chip off the old Chipotle
Chipotle Mexican Grill (NYSE: CMG) is laying off the hot sauce.
The burrito roller offering up disappointing quarterly results yesterday, warning of even slower growth in the future.
Revenue climbed 18% to $700.5 million in its latest quarter, fueled by expansion and a somewhat modest 4.8% uptick in comps. Earnings climbed 20% to $2.27 a share. Unfortunately, the company fell short on both ends of the income statement, as analysts were expecting a profit of $2.30 per share on $702.2 million in revenue.
Investors probably should've seen this coming. Three months ago, Chipotle was targeting comps to grow in the mid-single digits for all of 2012 despite a 10.2% spike in same-store sales through the first half of the year.
Chipotle didn't put out a specific range for the final quarter, but it won't be pretty if the year-to-date figure of 8.3% is expected to dwindle.
Things can get even more problematic next year, as Chipotle is targeting comps to clock in between flat and rising in the low single digits.
Well-played, David Einhorn. You win again.
4. Slow time at the Apollo
The for-profit post-secondary education market has been stung by weak enrollment levels, crummy student-loan repayment rates, and doubts about the effectiveness of online schooling, but things are only getting worse for Apollo (NASDAQ: APOL).
The company behind the University of Phoenix announced that it would close 115 of its smaller locations, displacing thousands of students and hundreds of employees.
The layoffs are what really sting here. How is Apollo supposed to promote itself as a provider of employable tools when it can't even keep its hires around?
5. Lindsay low hand
Shares of Lindsay (NYSE: LNN) slipped after the company missed on the bottom line.
The irrigation company had no problem watering the surface, matching Wall Street's top-line view. However, the $0.68 a share that Lindsay earned during the quarter was well short of the $0.76 per share the pros were targeting.
Lindsay had been able to surpass analyst estimates with ease in previous quarters, but there's a trend worth noting here. Lindsay topped Wall Street's income forecast by 33% three quarters ago, 21% two quarters ago, and 8% its last time out. Observant investors should've caught on that analysts were starting to catch up to the irrigation specialist.
The pros did catch up -- and just kept on going.
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