The stock market finished the session mixed on Thursday, with investors initially reacting negatively to news of a big drop in retail sales during December but then gradually regaining confidence over the course of the day. By the close, most major benchmarks had declined modestly, though the Nasdaq ended just in the green. Yet among individual companies, weak earnings reports sent some stocks lower. American International Group (NYSE: AIG), CenturyLink (NYSE: CTL), and Six Flags Entertainment (NYSE: SIX) were among the worst performers. Here's why they did so poorly.
AIG sees big losses
Shares of American International Group fell 9% after the insurance giant reported its fourth-quarter financial results. AIG said that it once again lost money during the period, although the amount of red ink was smaller than in the year-earlier period. Like other insurance companies that have recently reported, the insurer pointed to weak performance in the financial markets, an uptick in catastrophic losses, and unfavorable development of loss trends due to underwriting decisions from several years ago. AIG has high hopes that it'll eventually recover to deliver double-digit returns, but that could take several years, and investors don't seem willing to be that patient before seeing a full turnaround.
Image source: AIG.
CenturyLink slashes its dividend
CenturyLink's stock suffered a 13% hit following its decision to slash its dividend in connection with the release of its fourth-quarter financial report. The telecom company's revenue fell 4% during the quarter compared to the year-earlier period, and adjusted earnings were down significantly even after accounting for a massive goodwill impairment charge. Yet what disappointed investors was CenturyLink's decision to cut its dividend from $2.16 per share to $1 on an annual basis, with the company citing the need to reprioritize capital allocation to support growth and reduce debt. That's not surprising, but it still came as a shock to those who had hoped that CenturyLink's previous 14% yield would stay intact for the foreseeable future.
Six Flags takes a dive
Finally, shares of Six Flags Entertainment dropped 13%. The amusement park operator said that revenue rose 5% during the fourth quarter of 2018 compared to year-earlier results, but earnings were down by almost a fifth. The period is typically a slow one from a seasonal perspective, but investors also didn't seem all that excited about a rise in Six Flags' Active Pass Base of 8% year over year. Six Flags has worked hard to get visitors to upgrade from single-day tickets to memberships and season passes, but it'll take more work to fully satisfy shareholders who want the company to match what some of its rivals have been able to do to woo visitors to their parks.
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