Kellogg Profit Up 7% in Fourth Quarter
are trading flat so far today, after the cereal maker reported fourth-quarter profit rose 7% to $179 million, or 47 cents per share, during the three months that ended Jan. 3, compared with $176 million, or 44 cents per share, in the last quarter of 2007.
The maker of Pop-Tarts toaster pastries, Eggo frozen waffles, Cheez-It crackers and Special K cereal, reported revenue increased 5% to $2.93 billion. The company just went through a voluntary recall of peanut butter products because of the possibility of salmonella contamination.
From an investing standpoint, we had removed shares of Kellogg from our "Recommended" list on Oct. 8, when the stock traded at $55.65. The company has a 3.13% dividend yield, based on last night's closing stock price of $43.49. The stock has technical support in the $30 to $31 price range. If the shares can firm up, we see overhead resistance in the $48 to $52 area. We would remain on the sidelines for now.
Kellogg is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Cigna Shares Jump Despite Fourth-Quarter Loss and Lowered Guidance
Shares of health insurer
stock were up over 11% in morning trading Thursday, despite the company's fourth-quarter loss and lowered profit guidance.
For the fourth quarter 2008, Cigna said it lost $209 million, or 77 cents per share, compared with a profit of $263 million, or 93 cents per share, a year ago. The company cited losses from its runoff reinsurance businesses for the quarterly loss. Insurance companies use reinsurance policies to protect from possible losses on insurance contracts.
For the full year 2008, Cigna said its adjusted profit fell 20% from the previous year. Although revenue increased 8%, the company's full-year profit of $946 million, or $1.05 per share, is significantly down from $1.18 billion, or $3.87 per share from the previous year.
Cigna also lowered its earnings forecast for 2009, saying it now expects a full-year profit of $3.95 to $4.25 per share from operations, down from previous forecasts of $4 to $4.30.
We have avoided shares of Cigna since our early June coverage began, when the shares were trading at $41.55. The company has a 0.22% dividend yield, based on last night's closing stock price of $18.02. The stock has long-term technical support in the $12 area, and again at $8. If the shares can stabilize and begin to move up, overhead resistance would show up in the $22 area. We would look elsewhere for better investment opportunities at this time.
Cigna is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Estee Lauder Second-Quarter Profit Falls on Widespread Sales Decline
said in its earnings report Thursday morning that its quarterly profit fell 30% from the same period last year.
Profit for the fiscal second quarter, which ended Dec. 31, fell to $158 million, or 80 cents per share, down from $224.4 million, or $1.14 per share last year. Revenue dropped 12% to $2.04 billion, down from $2.31 billion last year. One average, analysts had been expecting profit of 77 cents per share on revenue of $2.04 billion.
Estee Lauder said that sales numbers dropped across all of its product categories: Skin care sales were down 7%; makeup sales were down 12%, and fragrance sales were down 20% from the same period last year.
The company disclosed its intentions to carry out a four-year restructuring plan, which includes cutting 6% of its workforce, or 2,000 jobs. Other initiatives will include continuing its hiring freeze, discontinuing merit raises, cutting inventory and costs, and realignment of the company's geographic regions.
Citing a weak retail environment, the company expects fiscal third quarter earnings of flat to 8 cents per share, while analysts had been expecting profit of 13 cents per share.
The company also estimated full-year earnings would come in between $1.30 and $1.60 per share, which is still in line with analyst expectations of $1.38 per share.
We had removed shares of Estee Lauder from our "Recommended" list back on Oct. 6, when shares traded at $46.13. The company has a dividend yield of 2.10%, based on last night's closing stock price of $26.19. The shares are right at technical support in the $25 area. If the shares begin to fall further, the $16to $19 area will be key to watch. If the shares can begin to firm up, we see overhead resistance in the $32 to $33 price area. We would remain on the sidelines for now.
Estee Lauder is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
MasterCard Profit Falls 20%; Shares Rally as Shorts Cover
shares are up 7% in trading so far today, despite the company reporting fourth quarter profit fell 20% to $239.4 million, or $1.84 per share, during the quarter ended Dec. 31, compared with earnings of $304.2 million, or $2.26 per share, during the same quarter a year earlier.
The company beat EPS estimates by 26 cents as revenue increased 14% to $1.22 billion during the quarter, from $1.07 billion during the same quarter in 2007.
Worldwide purchase volume also increased 3% to $455 billion amid a modest increase in customer spending on an increasing number of MasterCard cards, which number 981 million as of Dec. 31, 8% higher than year-ago levels.
We removed shares of MasterCard from our "Recommended" list on Jan. 14 at a price of $150.44. We had the stock on the list briefly at a price of $153.26. The company has a 43% dividend yield, based on last night's closing stock price of $140.15. This was another case of shorts picking the wrong name at the wrong time. Shorting is about timing, can't say it enough. Similar to Visa, this was another stock the market needed to see a bounce in, and we got it. We would still remain on the sidelines for now.
MasterCard is not recommended at this time, holding a Dividend.com Rating of 3.2 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.