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Why Petrobras, Whirlpool, and Luxoft Holding Slumped Today

Dan Caplinger, The Motley Fool

Stocks fell on Thursday, with the Dow Jones Industrial Average finishing modestly lower but with other major benchmarks closing nearly unchanged. Investors largely recovered from an early decline following the White House decision to cancel its scheduled meeting next month with Kim Jong Un of North Korea, instead focusing mostly on economic fundamentals that remain favorable throughout much of the world. Some individual companies, however, had to deal with adversity that sent their shares lower. Petroleo Brasileiro (NYSE: PBR), Whirlpool (NYSE: WHR), and Luxoft Holding (NYSE: LXFT) were among the worst performers on the day. Here's why they did so poorly.

Petrobras caves in to pressure

Shares of Petroleo Brasileiro dropped 15% on a bad day for energy markets generally. Not only was much of the sector down due to a $1-per-barrel drop in crude prices to below $71 per barrel, but Petrobras in particular chose to reduce prices of diesel fuel in Brazil by 10%. The move came in response to truckers in Brazil who went on strike complaining about the recent surge in fuel prices. Even though the price reduction will last only 15 days, some criticized the decision because it strengthens arguments that the state-controlled oil company is still susceptible to the same political influence that has made Petrobras a focus of corruption investigations in the past.

Offshore drilling rig with service vessel and small craft right next to it on the open water near sunrise or sunset.

Image source: Petroleo Brasileiro.

Whirlpool's tender offer disappoints

Whirlpool stock dropped 8% after the appliance manufacturer announced preliminary results of its modified Dutch auction tender offer. The company said that owners of almost 7.2 million shares offered to sell their stock back to Whirlpool at prices of $159.50 per share or less, and it will therefore move forward to buy about 6.27 million shares for roughly $1 billion. The original announcement of the tender offer in late April had pushed share prices higher in the hope that investors could get a quick windfall, but in the end, the price was only slightly higher than where the stock traded before the offer. With trade concerns still looming large, Whirlpool faces further challenges ahead.

Luxoft gets hammered

Finally, shares of Luxoft Holding sank 24%. The global IT services provider released its fiscal fourth-quarter financial report, which included a 14% rise in sales but a 5% drop in adjusted net income from the previous year's period. Luxoft pointed to "the impact of certain troubled accounts" in holding back the company from fully realizing its potential, acknowledging that it needs to diversify its sources of revenue beyond some major customers. Investors are still nervous, though, about the ramping down of Luxoft's relationship with its large account in the financial services industry, and with CEO Dmitry Loschinin projecting that the current quarter will be the slowest of the fiscal year, shareholders in Luxoft seemed to prefer waiting to see how the company recovers from its challenges.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Luxoft Holding. The Motley Fool has a disclosure policy.