Investors were generally pleased with how things went in the stock market on Tuesday. Gains were solid across the board, with the Nasdaq Composite (NASDAQINDEX: ^IXIC) leading the way higher. The S&P 500 (SNPINDEX: ^GSPC) and Dow Jones Industrial Average (DJINDICES: ^DJI) also managed to post gains of more than half a percent.
Index | Daily Percentage Change | Daily Point Change |
|---|---|---|
Dow | +0.62% | +205 |
S&P 500 | +0.73% | +31 |
Nasdaq | +0.93% | +122 |
Data source: Yahoo! Finance.
However, just because the market did well overall doesn't mean that shareholders in every stock were happy. Indeed, a couple of stocks took big hits on Tuesday. Here's why TransUnion (NYSE: TRU) and Teck Resources (NYSE: TECK) fared so poorly.
TransUnion plunges on "moderating growth expectations"
Shares of TransUnion plummeted 23% on Tuesday. The move came following the release of the credit rating bureau's third-quarter financial results, which reflected tough industry conditions and included guidance that disappointed investors.
TransUnion said that revenue for the quarter rose 3% year over year to $969 million. TransUnion posted a loss under generally accepted accounting principles (GAAP), and adjusted net income was down about 2% to $177 million. That worked out to adjusted earnings of $0.91 per share.
TransUnion CEO Chris Cartwright argued that the company did its best even as lending and marketing activity weakened during the quarter. Cartwright pointed to sustained modest growth in the U.S. business, along with double-digit percentage gains in TransUnion's international segment.
However, despite the fact that the company expects to see strong bookings in the fourth quarter, TransUnion cut its full-year guidance due to foreseen slower volumes in the U.S. and U.K. markets. 2023 revenue will likely grow just 2% to 3%, and adjusted net income of $3.24 to $3.28 per share would be a 9% to 11% drop from 2022 levels. That's a reverse that shareholders just weren't prepared to see.
Teck Resources deals with higher costs
Shares of Teck Resources held up somewhat better, but still finished the day down 9%. The mining company continued to build momentum on a key project, but investors had to deal with near-term sluggishness, along with higher costs related to Teck's operations.
Teck's third-quarter revenue fell 16% year over year to 3.60 billion Canadian dollars. That sent adjusted net income down by more than half to CA$399 million, which worked out to adjusted earnings of CA$0.76 per share.
Teck was pleased that sales volumes in its copper and zinc business were higher than they were in the year-earlier period, driven largely by the ramping up of the Quebrada Blanca phase 2 (QB2) project in northern Chile. The QB2 mine is one of the largest undeveloped copper resources in the world, and it generated 18,300 metric tons of production and 14,300 tons of sales.
Teck believes that QB2 should reach its full throughput by the end of 2023, although it gave production forecasts at the lower end of its previous guidance and reduced its overall copper production forecast by roughly 10,000 tons to a new range of 320,000 to 365,000 tons.
Despite solid demand from India and China, prices of steelmaking coal and zinc were lower than in past periods, which weighed on financial performance as well. Moreover, Teck said it would have to boost the capital spending budget by about $600 million in order to develop QB2 fully. An economic rebound globally could help boost commodity prices, but until that happens, Teck will have to deal with some weakness in its business.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Teck Resources. The Motley Fool has a disclosure policy.
