The stock market posted solid gains on Wednesday, as investors continued to take yesterday's comments from Federal Reserve Chair Janet Yellen as reflecting positively on the prospects for stocks. In the latest example of how apparent bad news can actually be good news, Yellen's statements that the Fed might respond more slowly to raise interest rates than expected was seen as a sign that stock market investors can expect easy monetary policy for an even longer period. Even though those comments helped send major market benchmarks up by about half a percent, a few stocks missed out on the day's gains. Among them were Verint Systems (VRNT -0.05%), Opko Health (OPK 4.15%), and FormFactor (FORM -11.76%).
Verint Systems fell 5% in the wake of weaker than expected results from its fourth-quarter financial report. The provider of business-intelligence software reported steep declines in several key financial figures, including a 10% drop in revenue and a fall of 37% in pre-tax income. Weakness was spread across Verint's business segments, including double-digit percentage declines in enterprise intelligence and the cyber-intelligence portion of the company's security business. Verint also projected further challenges in the year ahead, with overall revenue likely staying roughly flat compared to the just-ended fiscal year. Security intelligence sales could fall 10% to 15%, offsetting gains in the enterprise intelligence business. Even a $150 million stock buyback authorization wasn't enough to support the shares in the short-term.
Opko Health finished the day down 11% after receiving a complete response letter in response to its new drug application for hyperparathyroidism treatment calcifediol, also known as Rayaldee. The FDA's letter said that a field inspection in mid-March resulted in observations of deficiencies at the third-party contract manufacturer that Opko was using, and Opko said that the FDA didn't include any specific safety, efficacy, or labeling issues tied to Rayaldee or request any further studies. Investors were disappointed that the FDA wasn't able to grant approval for the drug immediately, but the company still believes that it will be able to gain approval in the near future.
Finally, FormFactor dropped 8%. The semiconductor-equipment maker warned Tuesday afternoon that its first-quarter financial results would be less than it had previously predicted, citing new guidance for $53 million to $54 million in revenue and an adjusted loss of $0.10 to $0.12 per share. FormFactor blamed the shortfall on a couple of timing issues, including a slower-than-expected ramp-up in production capacity of system-on-chip probe cards for a key customer and delays in deliveries of certain DRAM probe cards from the first quarter to the second quarter. CEO Mike Slessor remained confident in FormFactor's growth prospects for the full year, pointing to strong demand. Some analysts were uncertain why the company would have experienced this problem, however, and short-term pressure on margins could keep FormFactor from recovering as quickly as shareholders would like.