Medtronic Approaching Key 1998 Levels
just reported a second-quarter profit of $571 million, or 51 cents per share, compared with profit of $666 million, or 58 cents per share, a year earlier.
Revenue rose 14% to $3.57 billion from $3.12 billion. The earnings per share was four cents shy of estimates. The company did see solid results in its cardiac rhythm management which rose 8% to $1.24 billion. The company's cardiovascular division, which sells angioplasty products and stents, rose 22% to $596 million.
As for the company's outlook, it now sees 2009 EPS to be in a range of $2.90 to $2.98, below its previous guidance of $2.94 to $3.02. The consensus estimates are for $2.99 per share.
We have avoided shares of Medtronic since our early June coverage began, and the stock traded at $50.37. The company has a dividend yield of 2.06%, based on last night's closing stock price of $36.42. The company is coming into key support at the $28 level. We'll wait to see if those levels can hold. We'd look elsewhere for better investing opportunities.
Medtronic is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.
Pepsi Bottling Group Issues Profit Warning, Will Cut 3000 Jobs
Pepsi Bottling Group
just announced it's cutting its 2008 profit outlook as well as implementing a restructuring plan that will affect more than 3,000 jobs worldwide.
The company had recently raised guidance back on Sept. 30, so this is a quick about-face for the bottling company. Management plans to close three plants and 30 distribution centers.
The company now expects profit for 2008 to come in between $2.20 and $2.26 per share, below the $2.32 and 2.38 range previously given.
We have avoided shares of Pepsi Bottling Group since our early June coverage began, and the stock was trading at $31.46. The company has a dividend yield of 3.42%, based on last night's closing stock price of $19.91. The stock has technical support at the $18 level, and if that fails to hold, it can test $12 a share. We think the stock is fairly valued at this point, but will monitor the shares for any potential better stock price action.
Pepsi Bottling Group is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.
Hewlett-Packard is the New Tech Tell After Today's Guidance
just reported preliminary fourth-quarter results and provided its 2009 outlook, which are both ahead of what analysts had been expecting.
CEO Mark Hurd says the company continues to benefit from its global reach, diverse customer base, broad portfolio and numerous cost initiatives. Despite the current environment, the company is forecasting 2009 full-year EPS in the range of $3.88-$4.03, above the $3.85 consensus estimates.
The company has been aggressive with acquisitions, recently completing the purchase of rival
Electronic Data Systems
. The merger will result in 24,000 layoffs. The company is also ordering employees to take an extra holiday week of vacation, as it implements cost cuts. It will be interesting to see if the company can continue to deliver on results.
We have avoided shares of Hewlett-Packard since our early June coverage began, when the shares were trading at $47.63. The company has a low 1.09% dividend yield, based on last night's closing stock price of $29.09. If you are taking the short side against Hewlett-Packard, you better remember to not do it before the earnings come out. The company has not missed estimates since Hurd took over, and the stock historically bounces on seemingly every earnings report.
We aren't sold, however, that what is good for Hewlett-Packard is good for its competitors. In this declining profits environment, companies will cut prices to take back market share, so Hewlett-Packard is still a name we'd like to monitor, rather than put investment dollars in. The valuation is low, but the dividend yield is unattractive, and again, we anticipate competitors will have to respond with price cuts to win back some business.
Hewlett-Packard is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Asset Management Titan BlackRock Warns of Job Cuts
has reportedly told employees of impending job cuts to be made this week.
The company is looking for ways to reduce expenses in the challenging market and economic conditions. This announcement follows similar job actions at Fidelity Investments,
and Putnam Investments.
BlackRock had $1.26 trillion in assets at the end of September, below the $1.43 trillion it had at the end of June.
We had removed shares of BlackRock from our "Recommended" list back on Sept. 23, when the stock was trading at $188.75. The company has a dividend yield of 2.93%, based on last night's closing stock price of $106.40. The layoff scenario we have been looking for continues to unfold, unfortunately. In any recession, job cuts are a main course of action for most corporations. The company's next level of technical supports appears to be in the low $80-a-share price range. For now, we would wait to see shares stabilize before taking any long-term investment positions.
BlackRock is not recommended at this time, holding a Dividend.com Rating of 3.1 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.