Stocks soared on Tuesday, with the Dow narrowly missing the 17,000 level and both it and the S&P 500 reaching new all-time closing highs. Even as investors celebrated the beginning of a new quarter, though, not every stock managed to post such impressive gains. In particular, Acuity Brands (NYSE:AYI), Fidelity National Financial (NYSE:FNF), and Chesapeake Energy (OTC:CHKA.Q) saw the most extreme share-price declines on the day, although for Fidelity National and Chesapeake Energy there were extenuating circumstances justifying the drop.
Acuity Brands dropped 15% after reporting disappointing results for its fiscal third quarter. Revenue climbed 11.5%, sending net income up 38%, yet the maker of lighting products fell well short of the even faster growth that investors had hoped to see from the company. CEO Vernon Nagel argued that the results were consistent with the company's longer-term strategy to encourage adoption of LED lighting and boost its leadership in the lighting space. Yet the path to LED lighting might be more difficult that Acuity is projecting, given the fact that consumers have already been asked to replace incandescent bulbs with compact fluorescents and could be reluctant to make yet another costly switch.
Fidelity National Financial saw its share price drop 13%, but the decline was largely due to the title-insurance provider's distribution of tracking stock of its Fidelity National Financial Ventures affiliate. As a result of the move, shareholders in Fidelity National Financial will receive one share of FNFV Group stock for every three shares of Fidelity National stock owned prior to the split. Based on where FNFV shares finished the day, Fidelity National Financial actually gained ground on Tuesday, and the split will enable investors to choose which part of the company's business areas they want exposure to within their portfolios.
Similarly, Chesapeake Energy shares saw their price decline by 6%, but that decline came as a result of Chesapeake's spinoff of its Seventy Seven Energy oilfield services business. Under the spinoff, shareholders of Chesapeake will get one share of Seventy Seven Energy for every 14 shares of Chesapeake stock they owned, and based on today's close, the value of Seventy Seven Energy shares received will all but completely offset the drop in Chesapeake's share price. The move represents yet another way in which Chesapeake has made moves to focus on its most promising assets, divesting or spinning off non-core assets to help make the surviving entity leaner and more agile.