A humorous look at the companies that caught our eye, for better or worse, this week
Superior Plus (DOG)
Risky: Putting your face too close to a propane barbecue while you press the start button. Equally risky: Investing in propane distributor Superior Plus. Investors got their eyebrows singed after Superior, which put its specialty chemicals business up for sale last June, said it “has concluded that it is not in the shareholders’ best interests” to sell the division after bids did not meet the company’s expectations. With the stock down sharply this week, shareholders are feeling burned.
For years, investors worried that Starbucks was becoming too reliant on China. Turns out they were right. With the coronavirus outbreak bringing large parts of the country to a standstill, Starbucks temporarily closed more than half of its 4,300 stores in China – its second-biggest market after the United States. The coffee chain also warned that the outbreak will “materially affect” second-quarter and full-year results, even as it posted solid global same-store sales growth of 5 per cent in the first quarter. Brings new meaning to the phrase “caffeine jitters."
For Harley-Davidson investors, it’s been one long, downhill ride. The motorcycle maker – which has lost nearly half its market value over the past five years as younger customers gravitate to cheaper imported bikes – had more bad news in the fourth quarter as revenue tumbled 8.5 per cent, which was more than twice the decline analysts had expected. With sales in the U.S. market falling for a twelfth consecutive quarter, the stock is leaving skid marks all over investors’ portfolios.
How did Microsoft manage to post quarterly results that crushed expectations, including a 14-per-cent increase in revenue to US$36.9-billion and a 38-per-cent jump in net income to US$11.6-billion? Easy: “We are innovating across every layer of our differentiated technology stack and leading in key secular areas that are critical to our customers’ success,” explained CEO Satya Nadella. Investors may not understand what he means, but with the stock up about 60 per cent in the past year, they understand what it means to make a lot of money.
Briggs & Stratton (DOG)
Briggs & Stratton makes a wide range of push and riding lawn mowers. Unfortunately, one of them just ran over its stock. Citing weaker-than-expected retail activity that “has left channel inventories of residential mowers elevated in North America and Europe,” the company – which also makes snow blowers, generators and small engines – posted a second-quarter net loss of US$15.3-million, cut its full-year sales and earnings guidance and suspended its dividend. Ah, the smell of fresh-cut money.