The stock market tumbled today amid uncertainty due to upcoming meetings by the U.S. Federal Reserve and Bank of Japan, as well as on the back of a decline suffered by energy stocks. Since we are in the middle of the earnings season, several companies announced their financial results for the last quarter this morning, including Xerox Corp (NYSE:XRX), Laboratory Corp. of America Holdings (NYSE:LH), Roper Technologies Inc (NYSE:ROP), First Data Corp (NYSE:FDC), and KKR & Co. L.P. (NYSE:KKR). In this article, we are going to take a closer look at the results posted by these companies and take a look at how smart money investors have been trading them lately.
At Insider Monkey, we track around 800 hedge funds and other institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year (see more details about our small-cap strategy).
Xerox Corp Misses EPS Estimates
Xerox Corp (NYSE:XRX)’s has plunged by more than 12% so far today after the company reported earnings of $0.22 per share, missing the consensus estimates of $0.23. The revenue in the quarter declined more than 4% to $4.28 billion and was slightly above estimates of $4.24 billion. The company expects adjusted EPS of $0.24 to $0.26 in the second quarter, above the current estimates of $0.23. For the full year, the company expects adjusted EPS between $1.10 and $1.20 per share, but it cut the reported EPS guidance to the range of $0.45 to $0.55 from $0.66 – $0.76 due to higher costs related to separation and restructuring. Back in February, the company announced its plans to split its business in two publicly-traded companies that would concentrate its office machines business and back-office services, respectively.
Out of nearly 800 hedge funds tracked by Insider Monkey, 41 funds held long positions in Xerox Corp (NYSE:XRX) at the end of the fourth quarter of 2015, having amassed $1.4 billion worth of stock. Carl Icahn’s Icahn Capital LP, who pushed for the separation of the company, has one of the biggest stakes in the company, which contains some 92.38 million shares, equal to 9.12% of the outstanding stock.
Revenues Increase at LabCorp
Laboratory Corp. of America Holdings (NYSE:LH)’s stock has inched up by 1% after the company reported a net revenue of $2.30 billion, an increase of 29.5% on the year and above estimates of $2.20 billion. The diagnostics company’s earnings in the first quarter were $160.2 million or $1.55 per share, compared to $3.1 million or $0.04 per share last year, while its adjusted EPS of $2.02 was $0.06 higher than expected. For the full 2016, the company expects EPS in the range of $8.55 to $8.95. In a statement, David P. King, CEO of Laboratory Corp. of America Holdings, said that the company is off to a great start in 2016 because of the increasing demand in services of LabCorp Diagnostics and Covance Drug Development.
A total of 38 investors from our database held positions with a total value of around $2.8 billion in Laboratory Corp. of America Holdings (NYSE:LH) at the end of the last year. Larry Robbins’s Glenview Capital held 5.6 million shares heading into 2016.
Roper Technologies Reports Decline in Profits
Roper Technologies Inc (NYSE:ROP) reported a revenue of $902.4 million for the first quarter, which represents an increase of 4.3% year-over-year and beats the consensus estimate of $895.9 million. Moreover, the company’s adjusted net income of $1.50 per share topped the estimates of $1.46. The company expects EPS between $1.56 to $1.61 in the second quarter, which is significantly below the consensus estimate of $1.71.
A total of 19 funds among those tracked by us held stakes in Roper Technologies Inc (NYSE:ROP) heading into 2016, including Dan Loeb’s Third Point, which owned 1.4 million shares, according to its last 13F filing.
First Data Corp Halves Its Losses
First Data Corp (NYSE:FDC)’s stock has gained more than 5% today after the company posted adjusted earnings per share of $0.24 for the first quarter, beating the estimates by $0.01 per share. First Data narrowed its loss to $56 million from $112 million a year earlier. The payment solutions company, which went public last year, reported a consolidated revenue of $2.78 billion, up from $2.70 billion a year ago, beating the consensus estimate of $2.77 billion. Frank Bisignano, the CEO of the company, said in a statement that the company managed its expenses and focused on revenue growth to achieve results. Bisignanom, who left JPMorgan Chase & Co. in 2013, has been paid a massive salary package and he has been under pressure to drag the struggling company out of problems.
Overall, 20 hedge funds from our database held stakes in First Data Corp (NYSE:FDC) with a total value of approximately $593.3 million.
KKR & Co. L.P. (NYSE:KKR)’s Revenue Declines
Shares of KKR & Co. L.P. (NYSE:KKR) have lost more than 4% after the company missed the bottom line estimates for the first quarter. Even though KKR’s revenue of $279.90 million, managed to beat analysts’ estimates of $276.9 million, its net loss of $0.65 per share, was higher than the expected loss of $0.33. In a statement, the company said that the first quarter was challenging due to increasing market volatility around the world. In addition, a significant portion of the losses came on the back of a 19% drop registered by its stake in First Data Corp, which represents its largest investment.
A total of 23 funds held long positions in KKR & Co. L.P. (NYSE:KKR) with a total value of approximately $357.9 million at the end of the last year. John W. Rogers’ Ariel Investments reported ownership of more than 8.2 million shares in its last 13F filing.