Among the biggest losers in Friday’s early trading are Blyth (NYSE: BTH), athenahealth (Nasdaq: ATHN) and Banco Bilbao Vizcaya (NYSE: BBVA).

Blyth Confesses

Until about five years ago, companies would not hesitate to update their guidance in the middle of a quarter. Once they received fresh intra-quarter sales data, they sought to quickly disseminate it for fear of violating Reg FD (Regulation Full Disclosure, which was put in place ten years ago to ensure that all investors were dealing with the same information). Well, the Securities and Exchange Commission (SEC) and Nasdaq never really enforced this aspect of Reg FD, and companies eventually chose to just wait until each quarterly earnings release to update sales trends and guidance.

In that vein, kudos to Blyth (NYSE: BTH), a maker of scented candles, for quickly alerting investors that sales forecasts will not be met. The company is seeing its shares pushed down more than -17% today, but just gained a bit of credibility with investors. Much of the blame goes to the decline in the Euro, and lower spending in general in Europe. This is a factor that is not getting enough attention, either in analysts’ reports or in the financial media. Instead, many will wait until mid-July, when earnings reports roll in, and many will profess surprise that the weakening Euro is crimping profits for exporters.

Action to Take –> Act now. Peruse the 10-K filings of your holdings and read the section that discusses geographic sales exposure. If a stock derives 25% or more of its sales in Europe, and analysts’ estimates have not come down, a negative “surprise” awaits come earnings season.

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athenahealth’s Credibility Problem

For many corporate boards, it’s viewed as essential that a company’s management holds a great deal of credibility with key investors. So when investors grumble that management has lost their trust, the board often moves to replace an executive with a fresh face. It may not be fair to scapegoat one person for a company’s troubles, but that’s how it goes. Usually the chief executive officer (CEO) or president gets the axe, but in the case of athenahealth (Nasdaq: ATHN), the chief operating officer (COO) is being asked to fall on his sword. The board is also certainly aware that the company has lost half its value in just six months.

#-ad_banner-#A COO is tasked with being sure that spending stays in line, letting the CEO worry about sales growth. In its most recent quarter, athenahealth confessed that expenses were rising too fast, faster even than revenues. In fact, quarterly results have trailed forecasts for three of the last four quarters, largely due to runaway expenses. News of the COO’s departure is pushing shares down more than -8% in Friday trading, but some investors may come to see the move as a positive.

If the company can rein in costs, investors may grow to warm to this story. That’s because athenahealth is well-positioned to capitalize on the changing healthcare landscape. It provides an internet platform for doctors so they can reduce their crippling levels of paperwork while streamlining the claims process with insurers. An increasing number of doctors are making the move to electronic records management, which has enabled athenahealth to boost sales at least +33% in each of the past four years. And sales in 2010 and 2011 are still expected to grow at a respectable +25% clip.

Action to Take –> Those uncontrolled expenses, though, are crimping operating profit margins. Profits are expected to be flat this year at around $0.50 a share. Yet if the new COO can get a grip on costs, per-share profits could surge more than +50% in 2011. With today’s sell-off, shares now trade for about 25 times projected 2011 profits, the lowest forward multiple the company has seen in its three-year history as a public company. With a still-strong growth profile, investors are likely to warm up to this stock again in coming quarters. Shares may move back into the $30s once athenahealth proves it can actually exceed profit forecasts.

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An Unfriendly Reminder from Europe

European bank stocks are taking in on the chin today, reminding U.S. investors that the Gulf Coast oil spill and tepid U.S. employment growth are not the only major investor concerns right now. Spain’s Banco Bilbao (NYSE: BBVA) and Banco Santander (NYSE: STD) are both off more than -7% to new 52-week lows, while the Netherlands’ ING (NYSE: ING) is of by a commensurate amount.

Action to Take –> U.S. markets are unlikely to mount a fresh rally until investors sense that the European banking sector has stabilized. To the extent that European banks run into deeper trouble than is currently expected, then equities around the world may get dragged down in sympathy. Keep a close eye on this all-important sector.