Image: Electronic Arts.
Friday gave investors a silver lining to what has been a stormy month. Major market benchmarks cut their losses thanks to action from Japan's central bank to stimulate economic growth, and the resulting surge of nearly 400 points for the Dow cut its losses for January to just 5.5%.
Even though investors generally found reasons to celebrate broadly, some stocks didn't join in the cheerful mood on Wall Street. Among them were Electronic Arts (EA 0.21%), Quality Systems (QSII +0.00%), and Moog (NYSE: MOG-A) (NYSE: MOG-B), all of which posted steep declines on the day.
Electronic Arts dropped 8% despite reporting adjusted revenue and earnings figures Thursday night that exceeded expectations. The company has capitalized on the success of its Star Wars Battlefront video game, and between other Star Wars-related franchises and key games like Madden NFL 16, Electronic Arts set a new record for quarterly operating cash flow.
Interestingly, some investors were disappointed that Electronic Arts sold so many copies of Star Wars Battlefront during the quarter, noting that it will potentially take game sales away from the current quarter. Moreover, even though Electronic Arts pushed its guidance for the full fiscal year upward slightly, it still fell short of the consensus figures among those following the stock. Going forward, Electronic Arts hopes it can sell more digital copies of games to keep costs down.
Quality Systems fell 19% after posting its fiscal third-quarter results Thursday night. The specialist in healthcare information technology suffered an unexpected sales decline, bringing in far-less revenue than investors had expected. Even though the company managed to meet expectations of investors in terms of earnings, future prospects aren't nearly as clear in painting a reliable growth picture.
Moreover, uncertainty about the impact of the recently completed acquisition of HealthFusion Holdings might also have weighed on shares, and it will be up to executives like newly named Chief Technology Officer David Metcalfe to find ways to improve the user experience for Quality Systems' customers. Until Quality Systems completes its restructuring and modifications of existing sales processes, the stock could have trouble making much headway.
Finally, Moog declined 16%. The maker of components for the aerospace, defense, industrial, and medical device arena unexpectedly saw revenue decline sharply, hurting the company's bottom line, and causing it to miss investor expectations. Even though the aerospace arena has generally been resilient in the face of global macroeconomic concerns, Moog saw weakness in its commercial and military aircraft-related sales.
It also took a hit from the struggling energy sector, in which the company no longer had the disposable capital to buy components for equipment. Moog expects an eventual rebound for its core businesses; but for today, investors weren't willing to wait for the long run to stay confident.
