Scotts Miracle-Gro, the maker of lawn and garden care products, said Monday its board approved a dividend increase of 20% to 30 cents per share. The higher dividend will be paid on Sept. 9 to shareholders of record on Aug. 26.
That brings Scotts' dividend yield to around 2.6% based on Friday's closing price, but the company's stock price shed nearly 12% Monday afternoon as the major indexes tumbled more than 4% following an unprecedented downgrade to the U.S. government's AAA credit rating by Standard & Poor's on Friday.
Based on Monday's trading price, Scotts' higher dividend indicated a yield of around 3%. Earlier Monday, Scotts posted a 37% decline in fiscal third-quarter earnings, saying poor weather across the U.S. in recent months pressured consumer demand for lawn and garden care maintenance. "Through mid-March, consumer purchases of our products in the U.S. were up 13%, but then the situation changed dramatically," CEO Jim Hagedorn said. "The challenges we saw from weather this year are unparalleled during my life-long tenure in this industry."
The company cut its fiscal 2011 outlook by 15 cents, saying it now expects to earn between $2.95 and $3.05 per share for the year. Analysts were looking for 2011 EPS of $3.14. In the June-ended quarter, Scotts earned $111.6 million, or $1.69 per share, compared with year-earlier earnings of $175.9 million, or $2.59 per share. Revenue fell 9.7% to $1.06 billion. -- Written by Miriam Marcus Reimer in New York.
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