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Why General Electric, Align Technology, and Barnes & Noble Education Slumped Today

Dan Caplinger, The Motley Fool

The stock market didn't make any significant moves on Tuesday, as the popular indexes eased only slightly lower. In the absence of major news events to move stocks overall, investors instead focused on what was happening with individual companies, and that produced some interesting cross-currents within the market. General Electric (NYSE: GE), Align Technology (NASDAQ: ALGN), and Barnes & Noble Education (NYSE: BNED) were among the worst performers. Here's why they did so poorly.

GE brings investor anxiety to life

Shares of General Electric finished down nearly 5%, recovering from steeper losses earlier in the session following comments from CEO Larry Culp about the conglomerate's 2019 prospects. Culp said that in its industrial division, free cash flow will probably be negative over the coming year as the company spends money on restructuring its renewable energy and power businesses. GE had been making some progress recently, with the sale of its biopharma business raising a huge amount of needed cash. Yet without great results from its remaining segments, General Electric's future remains in doubt, and investors aren't too confident about the company's strategic vision.

Wind turbine with GE logo on side, on a mostly cloudy day.

Image source: General Electric.

Align looks a little out of shape

Align Technology's stock fell almost 7% after the maker of Invisalign dental devices agreed to an arbitration decision that will require it to make substantial concessions. Align had been involved in a dispute with SmileDirectClub and various related entities regarding provisions of a non-competition agreement, and as part of the arbitrator's decision, Align will close its 12 brick-and-mortar retail locations. Align had argued that the stores were different from SmileDirectClub locations because of the requirement to visit an orthodontist's office for actual treatment, but the arbitrator disagreed and extended the expiration of the non-competition provision to August 2022. Align will book a charge in the first quarter, but it foresees no material impact to revenue, and the company hopes that its fundamental business strength will win out in the end.

B&N Education gets schooled

Finally, shares of Barnes & Noble Education plunged 32%. The operator of college bookstores reported that revenue dropped 9% during its fiscal third quarter, and it barely eked out a tiny profit, reversing a loss in the year-earlier period. B&N Education also reduced its full-year sales forecast by $50 million to $100 million, seeing a new range of $2.15 billion to $2.2 billion. The company has sought to make a shift away from physical textbooks toward digital learning materials, and that contributed to the sales shortfall. Investors had gone into the report with considerable enthusiasm, but it's apparent that B&N Education will have to work harder to make its turnaround a reality.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool has a disclosure policy.