Earnings disappointments were the primary culprit behind the worst-performing stocks in the S&P 500 in October. The biggest losers were from a broad range of sectors, including technology, finance and education.

IN PICTURES: 10 Biggest Losers In Finance

Apollo Group (Nasdaq: APOL) was the worst-performing stock in the S&P 500 in October, falling 27%. The company withdrew its preliminary business outlook for fiscal 2011 and revealed significant declines in enrollment at the University of Phoenix. Apollo Group said that declines here may top 40% on a year-over-year basis.

Apollo Group and the rest of the for-profit education industry is under intense regulatory pressure from the government, which is concerned about the level of debt students incur relative to the merit of the degree received. The U.S. Department of Education is considering new rules that may hurt business, and Florida is investigating the industry for "unfair and deceptive enrollment practices".

Marshall & Ilsley (NYSE: MI) reported a net loss of $169.2 million, or 32 cents per share in third quarter 2010, missing consensus estimates for the quarter. The bank charged off $560.3 million in loans during the quarter, up 5% from Q3 2009. The company also had its bond rating cut by Standard & Poor's after the earnings release. This stock fell 15% during the month.

JDS Uniphase (Nasdaq: JDSU) also lost 15% of its value during October as this stock suffered collateral damage from investors reacting to perceived weakness in the optical networking industry. Oclaro (Nasdaq: OCLR) and Infinera (Nasdaq: INFN), which compete with JDS Uniphase in some areas, both came out with disappointing business outlooks for the Q4. The stock was also hit with a downgrade from a sell-side firm, and that was all that the herd needed to start selling.

Lexmark International (NYSE: LXK) reported its financial results for the Q3 and missed analyst expectations for revenues. The company also put out a weak outlook for revenue growth in the Q4 and saw a large rise in inventory, which spooked some investors that saw this as a precursor to more disappointment later on. Lexmark fell 15% during the month.

Regions Financial (NYSE: RF) fell 13% in October after the company reported a larger loss than investors anticipated. The bank saw a double-digit increase in charge-offs on its loan portfolio, as it continued to be hurt by real estate losses.

Bottom Line

The worst-performing stocks in the S&P 500 in October were the victims of weak earnings relative to investor expectations. Other factors included an unfriendly regulatory environment and continued problems with real estate loans. (Impairment charge is a term for writing off worthless goodwill, but you need to know what it means and what its potential impact is on EPS. Check out Impairment Charges: The Good, The Bad And The Ugly.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
  2. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  3. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  4. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  5. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  6. Stock Analysis

    The Top 5 Micro Cap Alternative Energy Stocks for 2016 (AMSC, SLTD)

    Follow a cautious approach when purchasing micro-cap stocks in the alternative energy sector. Learn about five alternative energy micro-caps worth considering.
  7. Stock Analysis

    Analyzing Porter's Five Forces on Under Armour (UA)

    Learn about Under Armour and how it differentiates itself in the competitive athletic apparel industry in light of the Porter's Five Forces Model.
  8. Stock Analysis

    The Biggest Risks of Investing in Qualcomm Stock (QCOM, BRCM)

    Understand the long-term fundamental risks related to investing in Qualcomm stock, and how financial ratios also play into the investment consideration.
  9. Stock Analysis

    The Biggest Risks of Investing in Johnson & Johnson Stock (JNJ)

    Learn the largest risks to investing in Johnson & Johnson through fundamental analysis and other potential risks. Also discover how JNJ compares to its peers.
  10. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
RELATED FAQS
  1. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  2. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  3. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  4. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  5. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
  6. What is the formula for calculating earnings per share (EPS)?

    Earnings per share (EPS) is the portion of a company’s profit that is allocated to each outstanding share of common stock, ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center