The stock market gave up some more ground on Tuesday, reflecting market participants’ anxiety about what the future might bring with respect to the pandemic, U.S. government tax policy, and global economic growth. It appeared for a while that Wall Street might mount another late-day rebound, but by the end of the day, the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) were all lower.
| Index | Percentage Change (Decline) | Point Change |
|---|---|---|
| Dow | (0.31%) | (104) |
| S&P 500 | (0.32%) | (13) |
| Nasdaq Composite | (0.11%) | (14) |
DATA SOURCE: YAHOO! FINANCE.
But a couple of companies saw their stocks rise sharply after the regular session had ended at 4 p.m. EDT today. Specifically, Chewy (NYSE:CHWY) and Cleveland-Cliffs (NYSE:CLF) picked up ground in after-hours trading following some favorable financial results and outlooks for their respective futures.
Chewy investors get a treat
Chewy shares were up 2% in the regular trading session on Tuesday, but they jumped another 9% after the market closed. Investors were pleased about what the pet products retailer had to say in its fourth-quarter financial results.
Chewy reported sales gains of 51% for the fourth quarter, pushing quarterly revenue above the $2 billion mark. Even more impressively, it posted positive net income, reversing a year-ago loss and working out to earnings of $0.05 per share.
A combination of factors helped Chewy. Active customers jumped 43% year over year to 19.2 million, while sales per customer inched higher by 3%. Margin performance improved dramatically, including an increase of 5.5 percentage points in net margin for the quarter. Sales using the company’s Autoship service climbed to nearly $1.4 billion for the quarter and $4.9 billion for the full fiscal year.
Investors hadn’t expected a profit from Chewy, and they largely got the sales growth they’d hoped to see. Now, the only big question is whether a possible end to the pandemic could reverse the favorable trends that have helped the company expand its business so strongly in the past year.
Steeling its resolve
Meanwhile, Cleveland-Cliffs stock rose 6% in after-hours trading, building on a 6% gain during the regular session. The steel producer and iron ore miner didn’t release full figures on Tuesday, but it updated its guidance in a way that brightened investors’ days.
Cleveland-Cliffs said it expects first-quarter pre-tax operating earnings to come in at about $500 million on an adjusted basis. Yet by the second quarter, it sees dramatic improvement to $1.2 billion. Moreover, its first-half run rate should continue throughout the year, with Cleveland-Cliffs projecting $3.5 billion in adjusted pre-tax operating earnings for its full 2021 fiscal year.
Investors have been impressed with Cleveland-Cliffs, as the stock has nearly tripled in the past year. The company has continued to make dramatic transformations, with strategic moves to acquire AK Steel and the U.S. operations of ArcelorMittal (NYSE:MT) putting Cleveland-Cliffs in position to become an integrated steel producer with its own raw-materials production capabilities.
Now, all Cleveland-Cliffs needs is greater industrial activity to drive demand for steel across the U.S. economy. Investors will get a better sense of how the first quarter has gone when the steelmaker releases its full earnings report on April 22, but until then, shareholders like what they’re seeing from Cleveland-Cliffs today.
