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Movado Shares Rise On 1Q Results, Clearer Guidance

The Associated Press

NEW YORK (AP) — Shares of watch maker Movado Group Inc. rose Friday as investors took a cue from the first-quarter results and started to feel more comfortable about the rest of the year.

Shares rose 87 cents, or 7.9 percent, to $11.90 in late morning trading.

"With some stabilization of U.S. trends, which led to better-than-expected first-quarter results, management was able to issue guidance with more clarity than prior ballpark guidance to be slightly profitable," JMP Securities analyst Kristine Koerber told investors in a research report.

Movado said earlier this month that it would earn 50 cents per share in fiscal 2010.

Koerber raised the firm's fiscal 2010 profit estimate to 41 cents per share from a loss of 25 cents and maintained a fiscal 2011 profit forecast of 80 cents per share. For 2011, analysts polled by Thomson Reuters expect 73 cents per share. No consensus estimate was available for fiscal 2010.

Still, Koerber remains "cautious" on the shares and sees them as "fully valued."

On June 9, Movado reported that it lost $9 million in its fiscal first quarter as sales fell by a third because consumers spent less amid the recession. The watch maker lost 37 cents per share in the quarter that ended April 30, better than the 48 cent per share loss that analysts had expected.

In a presentation from its annual meeting that was posted on its Web site, the company also said it has generated savings of $50 million to $60 million through cost cuts. It also said it expects the economy to start to stabilize in the second half of the year.