Tickers in this Article: X, AIG, NVLS, LXK, BRCM, TER
April 2011 was a good month to be an equity investor as the market rebounded from a decline earlier in the month and reached a two-year high. Some investors did not share in this good fortune, and many stocks registered declines of 10% or more, due mostly to earnings disappointments. Sometimes when stocks experience a big drop, this creates opportunity for investors. Here we'll take a look at the month's biggest losers. (Some companies excel at announcing news that is bad for shareholders, but spinning it as good news. For more, see Some Good News Is Bad For Investors.)

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Equity Declines
U.S. Steel (NYSE:X) was the worst-performing stock in the S&P 500 in April 2011, closing down by 15%. The company reported a net loss of $86 million, or 60 cents per share, in the first quarter of 2011, the company's ninth straight GAAP loss. U.S. Steel attributed the loss to higher raw material and pension costs in the quarter.

Despite the streak of losses, many are bullish on the steel industry due to strong demand from emerging economies. Analysts are expecting 2012 earnings to be $5.69 per share as the company recovers and benefits from this demand. (For more, see Why Investors Stick With Failing Stocks.)

AIG (NYSE:AIG) fell 13% in April and has declined for four straight months since reaching a peak in early January 2011. The catalyst for the decline seems to be the pending sale of the U.S. government stake in the insurance company, with the first sales expected in mid May 2011. The government owns more than 92% of AIG and hopes to reduce its stake to 33% during 2011.

Lexmark (NYSE:LXK) was also a victim of earnings season with missed guidance and a weak outlook. The company reported income excluding one time items of $83.3 million, or $1.14 per share, 10 cents below analyst estimates. Lexmark also gave a second-quarter guidance range of $1 to $1.10 per share, below estimates of $1.15 per share. Lexmark said that the earnings miss was caused by competitive pricing and weak demand from the public sector. The company finished the month down by about 13%.

Novellus Systems (Nasdaq:NVLS) also ended April down by about 13%, despite reporting earnings of $1.04 per share in the first quarter of 2011, 1 cent above what investors were expecting. The stock suffered as the company reported a weaker outlook for its second quarter and lower-than-expected capital spending on semiconductors in 2011. Teradyne (NYSE:TER), a competitor of Novellus Systems, made a similar warning on its outlook as well.

Broadcom (Nasdaq:BRCM) reported an increase in earnings for the first quarter of 2011, but a weaker-than-expected revenue outlook for the second quarter moved the stock lower. The company expects revenue to range from $1.75 billion to $1.85 billion, compared to the $1.9 billion that the street was expecting. The stock ended the month down by approximately 13%.

The Bottom Line
Not all stocks in the S&P 500 shared in the good fortune in the equity market in April 2011, as weak earnings reports or outlooks relative to consensus caused some stocks to end the month lower.

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