Market Overview

There Was A Slew Of Guidance Cuts Today


Several companies updated their outlooks for the current quarter or year on Monday. So, let’s look into some of the main guidance cuts:

Hertz Global Holdings Inc (NYSE: HTZ) said it expects first quarter and full year U.S. car rental revenue and consolidated first-quarter earnings per share to be lower than management previously projected, citing "excess industry capacity." Moreover, management anticipates first-quarter U.S. car rental revenue per available car day will fall 2.5 percent to 3.5 percent year-over-year. For the full fiscal year, the company envisions U.S. RAC total revenue will be flat to 1.5 percent lower compared to a prior guidance of 1.5 to 2.5 percent year-over-year growth.

Shares of PHH Corporation (NYSE: PHH) were down almost 18 percent after the company withdrew its prior financial guidance and announced changes to its private label client relationship. The guidance withdrawal came after Merrill Lynch Home Loans indicated its intent to move the origination of new applications for certain mortgage loan products to its internal operations by the end of the month. This could represent a reduction of approximately 20 percent of Merrill Lynch's 2015 loan closing dollar volume, or approximately 5 percent of PHH's total 2015 loan closing dollar volume.

Furthermore, Merrill Lynch said it plans to in-source its sub-servicing portfolio by the end of calendar 2016. The sub-servicing accounted for approximately $40 billion in unpaid principal balance, or 32 percent of the company's sub servicing portfolio.

PHH declared it would not provide further earnings guidance until the completion of a previously announced review of strategic alternatives.

National-Oilwell Varco, Inc. (NYSE: NOV) lost more than 5.75 percent after the company announced an update to its revenue outlook and a change to its dividend. Management said it expects first quarter revenue to fall 20 percent year-over-year from $2.7 billion last year. However, the team pointed out that while the outlook remains "challenging," its balance sheet remains "strong financially."

Despite this, the company’s Board of Directors decided to trim the stock's quarterly dividend payout to $0.05 per share, down from a previous $0.46 per share, arguing that this would improve the company’s future net cash flow by approximately $615 million per year.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Posted-In: News Guidance Movers


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