Tableau Software, LinkedIn, Lions Gate Entertainment, Esterline Technologies and New Relic saw sharp losses last Friday after disappointing earnings reports.
Last Friday was a difficult day for the tech sector, with major companies seeing historical share price drops.
The biggest tech losers listed on the NYSE were Tableau Software (NYSE:DATA), LinkedIn (NYSE:LNKD), Lions Gate Entertainment (NYSE:LGF), Esterline Technologies (NYSE:ESL) and New Relic (NYSE:NEWR). Here’s a brief overview of what caused their precipitous losses.
Tableau provides analytics and business intelligence software solutions, such as Tableau Desktop, a self-service analytics product, and Tableau Server, a business intelligence platform. Tableau Online is the company’s cloud-based version of the server, while Tableau Public is a free cloud-based platform for analyzing and sharing data.
The company’s share price fell a whopping 47.98 percent on Friday after it released its Q4 2015 earnings on Thursday night. Although it slightly surpassed its overall revenue estimate and significantly beat estimates on earnings per share, Tableau issued a reduction in guidance, apparently spooking investors. ValueWalk reported that analysts slashed their price targets for the stock following the release of the earnings report.
LinkedIn also made headlines for its share price drop last Friday. The well-known professional networking website saw its share price drop by 42.37 percent that day, wiping out nearly $11 billion of its market value. Similar to Tableau, investors were reacting to the company’s revenue forecast, released after hours on Thursday, which fell short of expectations.
The Globe and Mail said that LinkedIn’s share price fell to a three-year low of $110.01 in early trading, marking the company’s sharpest decline since its IPO in 2011. Analysts responded to the news by downgrading the stock from “buy” to “hold.” As analysts from Mizuho Securities USA have explained, “with a lower growth profile, we believe that LinkedIn should not enjoy the premium multiple that it has grown accustomed to.”
Lions Gate Entertainment
Continuing this downward trend was Lions Gate Entertainment, a company engaged in motion picture production and distribution, television programming and syndication, home entertainment, digital distribution, channel platforms and international distribution and sales. For readers unfamiliar with the company but fluent in pop culture, this studio put out the Hunger Games trilogy.
Cognizant that the success of the Hunger Games is important for its bottom line, the company was disappointed when figures for The Hunger Games: Mockingjay Part 2 brought in about $100 million less than anticipated. On Thursday night, the company released an earnings report that disappointed investors, triggering the 34.03-percent drop that seen Friday.
Esterline Technologies was also hit by Friday’s curse on the tech sector. The specialized manufacturing company designs, manufactures and markets engineered products and systems for use in the aerospace industry. Like the other companies on this list, Esterline Technologies released a disappointing quarterly revenue and earnings report on Thursday evening, falling short of analyst estimates.
Compounding that problem, on Friday morning the company was hit with the news that shareholder rights law firm Johnson & Weaver will be investigating it and some of its officers for potential violations of federal securities law. At the time of writing, Esterline Technologies had seen a 30.36-percent drop in share price.
With a 23.56-percent drop in share price, New Relic rounds out this list of top stock losses on the NYSE last Friday. The company’s cloud-based platform allows organizations to collect, store and analyze software data in real time. Like all of the other companies collected here, New Relic released a disappointing earnings report on Thursday evening. According to Financial Market News, analysts at Susquehanna have dropped the company’s price objective from $46 to $40.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.