Monday was a solid day on Wall Street, with most major indexes posting modest advances amid favorable market conditions. Economic data pointed to a healthy combination of growth without fear of sharply rising prices, and earnings season kept giving relatively good readings on corporate America's prospects. Yet some companies dealt with bad news that sent their shares lower. C.H. Robinson Worldwide (NASDAQ: CHRW), Dorman Products (NASDAQ: DORM), and Veoneer (NYSE: VNE) were among the worst performers. Here's why they did so poorly.
Will one-day shipping kill the trucking industry?
Shares of C.H. Robinson Worldwide were down nearly 8% on a bad day for trucking companies in general. Recent news that Amazon.com will offer one-day shipping to members of its Amazon Prime subscription service raised questions about whether e-commerce-driven logistics solutions will allow for enough time for shipping by truck to be viable. Yet even in a worst-case scenario, C.H. Robinson will still have a role to play in getting goods from manufacturers to distribution centers, and the company has worked hard to build up a diverse set of business lines that includes everything from air transport to moving perishable goods. Investors will get a better sense tomorrow when C.H. Robinson reports earnings, but today's decline seems overblown for now.
Image source: C.H. Robinson.
Dorman deals with consolidation
Dorman Products saw its stock sink 9% after the maker of replacement auto parts reported its first-quarter financial results. Revenue rose from year-ago levels, but adjusted earnings per share fell 18% a-0s the company faced rising expenses. Dorman explained that it spent considerable resources on consolidation efforts during the period, moving its Montreal facility into a new distribution center in Tennessee while combining facilities in Michigan and Pennsylvania into a single location. The good news is that Dorman's backlog rose during the quarter, hopefully supporting future business in what CEO Kevin Olsen sees as "very healthy" end markets. For now, though, Dorman investors will have to wait a few months longer to see whether those better times materialize.
Veoneer hits the brakes, looks for cash
Finally, shares of Veoneer dropped 17%. The Swedish maker of products supporting autonomous vehicles said that its financial results in the first quarter of 2019 weren't as strong as investors had wanted to see, with substantial losses and a shortfall in revenue. Despite the amount of attention that self-driving cars have received, Veoneer hasn't yet been able to capitalize on the trend, with CEO Jan Carlson saying that advances are coming more slowly than previously anticipated. Because of those delays, Veoneer will have to raise as much as $500 million in capital, and that could spell even more difficulty for investors facing the prospect of share dilution.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends AMZN. The Motley Fool recommends C.H. Robinson Worldwide. The Motley Fool has a disclosure policy.