What Happened?
Shares of IT services provider ASGN (NYSE: ASGN) fell 7.8% in the afternoon session after a disappointing forecast for the fourth quarter overshadowed an earnings beat. The company's revenue for the third quarter was $1.01 billion, down 1.9% from the same period a year earlier but slightly ahead of what analysts had expected. While adjusted earnings of $1.31 per share also came in ahead of estimates, investors focused on the weaker outlook. Looking ahead, ASGN forecasted fourth-quarter revenue with a midpoint of $970 million, falling short of analysts' projections and signaling potential challenges in the near term.
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What Is The Market Telling Us
ASGN’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 3.8% on the news that worries over worsening trade relations with China were triggered by critical comments from President Donald Trump.
Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market. Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions and ahead of an anticipated meeting between the US and Chinese presidents. Consequently, technology stocks with significant exposure to Chinese supply chains, such as Nvidia and AMD, experienced sharp declines. This downturn was exacerbated by the bearish sentiment surrounding a prolonged U.S. government shutdown, adding to overall market uncertainty.
ASGN is down 46.4% since the beginning of the year, and at $44.39 per share, it is trading 56% below its 52-week high of $100.79 from November 2024. Investors who bought $1,000 worth of ASGN’s shares 5 years ago would now be looking at an investment worth $630.90.
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