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Disappointing Earnings Results Have Sent These Stocks Lower Today

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U.S. stocks are struggling to hold on to gains this morning, as investors dwell on the latest economic data and a weak rally in the energy markets. Third quarter data points to an annualized GDP growth of 2%, above analysts’ estimates of 1.9%, while WTI has stabilized around the $36 level. In this article, however, we will discuss four stocks that are being driven by the latest round of earnings reports. Let’s see how ConAgra Foods Inc (NYSE:CAG), Steelcase Inc. (NYSE:SCS), Express Scripts Holding Company (NASDAQ:ESRX) and Paychex, Inc. (NASDAQ:PAYX) have fared in the most recent quarter.

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We’ll start with ConAgra Foods Inc (NYSE:CAG), a packaged food company, known for its Chef Boyardee pasta and Orville Redenbacher’s popcorn. The company’s second fiscal quarter results came in mixed compared to the Wall Street expectations, posting revenues of $3.09 billion and diluted earnings of $0.71 per share when adjusted for restructuring and non-recurring costs. Analysts, on the other hand, were looking for a profit of $0.59 per share on $3.39 billion in revenues.

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Although one might expect the stock to plunge as a result, it wasn’t the case for ConAgra. Shares opened slightly higher today and managed to stay in the green during the first hour of trading. The company issued a statement to inform investors that the sale of its private-label unit to TreeHouse Foods Inc. (NYSE:THS) is set to be completed in the beginning of 2016, while the spin-off of Lamb Weston is expected to close next autumn. The management of ConAgra has faced pressure from activist investor JANA Partners to divest some of its assets in order to focus on reviving its household brands. During the third quarter, Barry Rosenstein increased JANA’s holding of the stock by 165% to 30.5 million shares valued at $1.24 billion.

Slowing business in Europe, Middle East and Africa regions have had a major negative impact on Steelcase Inc. (NYSE:SCS)‘s third quarter results, as both revenues and earnings have missed analysts’ expectations. The furniture company posted revenues of $787.6 million, down by 1.5% year over year, and earnings of $0.30 per share, missing the consensus of $813 million in revenues and a profit of $0.33 per share.

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The company has seen a solid revenue growth in recent quarters, but the slow revamp of its European operations has offset the progress in North America and other regions. Steelcase Inc. (NYSE:SCS)’s management has also announced its expectations for the current quarter, projecting revenues of $720 million to $745 million, while earnings are expected to range between $0.20 and $0.24 per share. Chuck Royce holds the largest investment in the company among the fund managers we follow, with Royce & Associates having reported in its latest 13F filing ownership of 1.82 million shares worth north of $33.5 million.

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