Air Products & Chemicals Issues an Earnings Warning
Air Products & Chemicals
is lowering its fourth-quarter profit forecast, citing a variety of factors -- including a fire at a production facility and the effects of hurricane season.
A recent fire at one of the company's plants required the facility to be shut down -- which is expected to impact fourth quarter EPS by $0.05. Also, Hurricanes Gustav and Ike reduced short-term demand from Gulf Coast customers and drove temporary increases in operational costs. These factors are expected to affect fourth quarter EPS by $0.05.
The company now sees fourth-quarter diluted earnings per share from continuing operations in the range of $1.24 to $1.26. The company's previous earnings expectations for the fourth quarter were in the range of $1.37 to $1.42.
We removed APD from our "Recommended" list on Aug.11, when shares were trading at $89.92, and we would still avoid the shares at current levels. The company has a 2.19% dividend yield, based on last night's closing stock price of $80.28.
Air Products & Chemicals is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Lennar Says Homebuilding Business Is in Tough Shape
believes weakness in the real estate market is actually accelerating due to increased foreclosures, weakened consumer confidence, and tightened mortgage lending standards.
The company's revenue from home sales fell 54% in the third quarter to $995.7 million from $2.2 billion in the comparable period during fiscal 2007. The average sales price of homes delivered decreased to $270,000 from $296,000 on a year-over-year basis.
The company is calling for further government action to help the housing industry. Someone better tell the Lennar CEO to get on that bailout line very quickly, as it continues to get longer by the hour.
We are very cautious on the builders and right now are only recommending
, which we may re-evaluate if the markets do not stabilize here. Investors should remain on the sidelines regarding Lennar.
Lennar is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.
Bristol-Myers Squibb Raises Bid for ImClone Systems
intends to commence a tender offer for the currently outstanding shares of common stock of ImClone that are not already owned by Bristol-Myers Squibb for $62 per share in cash.
Bristol-Myers already owns 17% of ImClone, and the two companies collaborate to market the cancer drug Erbitux. ImClone chairman Carl Icahn recently mentioned the company received a $70 offer from an unnamed bidder. Some analysts have called ImClone's claim of a rival bidder nothing but a maneuvering tactic to pull a higher bid from Bristol-Myers. BMY has offered only a slightly higher bid from its previous offer of $60 per share.
We have liked the shares of Bristol-Myers since early June, and the stock has pretty much been stuck in the same price range it was then. The company has an attractive 6.01% dividend yield, based on last night's closing stock price of $20.62. We are willing to hang around a bit longer, with the dividend yield currently being the main catalyst to stay.
Bristol-Myers is a "Recommended" dividend stock, currently holding a Dividend.com rating of 3.6 out of 5 stars.
Union Pacific Raises Earnings Estimates on Fuel Cost Drop
is now expecting higher profits for the third quarter due to lower diesel fuel and operating costs.
Third quarter average diesel fuel price is expected to be roughly $3.70 per gallon, versus the originally forecasted price of $4 per gallon. This decline will add roughly $0.10 per share to third quarter earnings.
As a result, third-quarter earnings are expected to be in the range of $1.28 to $1.33 per share, or growth of 28-33% versus the third quarter 2007. This exceeds the company's original earnings projection of $1.10 to $1.20 per share.
We removed shares from our "Recommended" list back on Aug.12 when the stock was at $79.25. Rather than fuel costs, the true key for Union Pacific will be transportation demand. If demand -- which is now lagging -- picks up, the company's stock price could rise along with it. Thus, we will be watching Union Pacific shares closely to see if opportunity rises to get back into the name. The company has a 1.48% dividend yield, based on last night's closing stock price of $72.86.
Union Pacific is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.