U.S. markets were down in midday trading Tuesday, with the S&P 500 and Dow Jones industrials down 0.8% and 0.6%, respectively. Meanwhile, oil continued its two-month slide, falling below $40 a barrel, down roughly 1.4% to $39.50 a barrel in afternoon trading, based on U.S. benchmark West Texas Intermediate.
Shares of Mallinckrodt (MNK) were climbing about 13% after the Dublin-based drugmaker topped earnings expectations and hiked its 2016 earnings forecast to a range of $8.50 to $8.80, from prior guidance of $8.15 to $8.50. (Mallinckrodt shares are still down roughly 39% over the past 12 months.) The drugmaker also posted quarterly earnings per share of $2.20 Tuesday, about 9% higher than consensus estimates, while sales of $971 million for the period topped forecasts by about 5%.
CEO Mark Trudeau said in a statement that much of the company's success in the quarter stems from the growth of a variety of its specialty drugs. "We continue to generate compelling new data and clinical evidence for key brands, and are working to bring this data to new physicians and patients -- clear evidence that our Acquire to Invest strategy is creating performance momentum," he added.
Short seller Andrew Left, the founder of Citron Research, has been vocal about his bearish view on Mallinckrodt this year, going so far as to promise in May to give $1 million to a selected charity if Mallinckrodt did a proper clinical study on its premiere drug, Acthar.
Meanwhile, Frontier Communications (FTR) shares were down about 5% after the Stamford, Conn.-based telephone company fell short of analyst expectations in its quarterly sales numbers, which were released with earnings after the closing bell Monday. Frontier booked sales of $2.61 billion vs. consensus estimates of $2.73 billion, as an earnings loss of $0.02 per share beat forecasts of $0.03. The company pointed to a temporary suspension of marketing acquisitions for much of the slowdown but its CEO Daniel McCarthy said on an earnings call with analysts that the Frontier is "now back to a typical level of marketing."
Discovery Communications (DISCA) shares gained about 6% in midday trading after posting earnings per share in the second quarter of $0.71, topping consensus forecasts of $0.58, while sales of $1.71 billion were in line with estimates. "A key element of Discovery's growth profile is our continued success in securing long cycle distribution agreements that provide for steady and predictable revenue growth and the optionality for windowing our content on existing and new platforms," CEO David Zaslav said on an earnings call with analysts. Management also unveiled a long-term affiliate deal with Liberty Global (LBTYK) , one of its largest distribution partners.
CVS Health (CVS) shares were also 5% on an earnings beat and raised 2016 earnings guidance to a range of $5.81 to $5.89 vs. consensus estimates of $5.82. The company also booked earnings per share of $1.32 vs. forecasts of $1.30, while sales of $43.7 billion fell short of expectations of $44.3 billion for the quarter. (CVS Health is a holding of the Trifecta Stocks model portfolio.)
