American Woodmark Posts Smaller Than Expected Loss, Shares Rise
reported a smaller than expected quarterly loss Monday, spurring its shares to rise nearly 17% in early afternoon trading.
In the quarter, the company said it lost $481,000, or 3 cents per share, compared to analyst estimates of a loss of 6 cents per share. Sales for the company, whose main clients include
, dropped 16% in the quarter to $134.9 million.
We have been avoiding shares of American Woodmark since our early June coverage began, when shares were trading at the $24 level. The company currently has a dividend yield of 2.57%, based on last night's closing price of $14.03. This earnings report -- although better than expected -- does not bode well for the housing and remodeling markets. The company said that remodeling sales for the second quarter declined in the low teens, while new construction sales fell 20 percent. We urge investors to stay on the sidelines of all home-related stocks until the market shows some signs of recovery.
American Woodmark is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Hormel Profit Down 33%, Hurt by Turkey Unit
, maker of various meat and other food products, reported Tuesday that its fourth-quarter profit fell 33% from the year-ago period.
Profits were hampered by the company's Jenny-O Turkey Store unit, which suffered from higher feed and fuel prices, as well as a lack of pricing power. Hormel CEO Jeffrey Ettinger said that "an industry-wide oversupply of breast meat kept prices below our cost of production," adding that "we do not expect this situation will significantly improve until next spring."
Fourth-quarter profit dropped to $67.8 million, or 50 cents a share, down from $101.2 million, or 73 cents, a year earlier. Analysts had expected 48 cents per share for the quarter.
As for next year's guidance, Hormel said 2009 profit could rise to $2.15 to $2.25 a share, up from $2.08 per share this year.
We have been avoiding shares of Hormel Foods since our early June coverage began, when shares were trading around $40. The company currently has a 2.53% dividend yield, based on last night's closing price of $29.24. We would avoid the shares at these levels, as the company's dividend yield is not enough to cushion any further erosion of share values.
Hormel Foods is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Eaton Vance Profits Drop 43%, but Beats Estimates
reported a 43% drop in profit Tuesday, as the financial crisis dug into clients' assets and slowed investment money flowing into the company's funds.
Assets under management fell 21% in the quarter, from $155.8 billion at the end of July to $123.1 billion at the end of October. Net inflows into the company's funds slowed to only $300 million in the fourth quarter, compared to $5.8 billion in the third quarter.
Excluding unrealized and impairment losses, the company's numbers came in at 37 cents a share, above analyst estimates of 32 cents a share.
We have been avoiding Eaton Vance shares since our early June coverage began, when shares were trading at the $41 level. The company currently has a dividend yield of 4.14%, based on last night's closing price of $14.97.
The coming months will be very difficult for fund managers like Eaton Vance, who are seeing a mass exodus of cash from their funds amid the biggest financial crisis in our nation's history.
Eaton Vance is not recommended at this time, holding a Dividend.com Rating of 2.9 out of 5 stars.
D.R. Horton Reports $800 Million Loss, Slashes Dividend by 50%
reported Monday that a fiscal fourth-quarter loss ballooned to $800 million on costs due to unsold housing inventory and land disposal.
The $800 million fourth-quarter loss, or $2.53 a share, dwarfed the company's loss from the same period last year, in which it lost $50 million, or 16 cents a share. Sales in the quarter fell to $1.75 billion, down from $3.12 billion in the year-ago period.
That sales number --$1.75 billion -- actually beat analyst estimates, which had expected $1.5 billion.
Donald Horton, CEO of DHI, said that the company continues "to adjust our business to the current homebuilding environment by reducing our homes under construction and our owned lot position, controlling costs, and repaying debt."
The company also said it would cut its dividend payout in half, from 30 cents to 15 cents annually. This marks the second dividend cut of the year for D.R. Horton.
Strangely, the stock bounced up over $1, to $6.05 per share today after the report, similar to the bump the stock received after warning about the impending quarterly loss a couple weeks ago.
We have been avoiding shares of D.R. Horton since our early June coverage began, when shares were trading around the $12 level. After the latest dividend cut, the company will have a 3% dividend yield, based on last night's closing price of $5. The gigantic quarterly loss, the second dividend cut this year, and a housing market that shows no signs of rebounding are more than enough to keep us away from this troubled housing name.
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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.