Kraft Foods' Profit Rises 10%, Beats Expectations

Packaged food products company

Kraft Foods

( KFT) said Tuesday that its first-quarter profit beat expectations, and it also reiterated its full-year earnings forecast.

The Northfield, Ill.-based company reported first quarter net income of $660 million, or 45 cents per share, up 10% from $599 million, or 39 cents per share, in the year-ago period. Revenue fell 6.5% to $9.4 billion from $10.05 billion in the same quarter last year.

This quarterly profit was enough to beat analyst estimates, but overall revenue fell still short of the average forecast. On average, Wall Street analysts expected a profit of 40 cents a share on revenue of $9.67 billion.

Kraft blamed the stronger dollar's effect on overseas business for bringing down revenue by 7.9%.

The company also reaffirmed its full-year 2009 guidance for a profit of $1.88 per share.

Kraft shares rose $1.37, or 5.4%, in Tuesday morning trading.

We have just placed Kraft Foods back on our "Recommended" list today. We believe the stock is offering an attractive entry point at these levels.

Kraft is a "recommended" dividend stock, holding a Dividend.com DARS Rating of 3.5 out of 5 stars.

CVS Caremark Raises Guidance as Profit Beats Estimates

Pharmacy chain

CVS Caremark

(CVS) - Get Report

said Tuesday that its first-quarter profit fell by 1% from the same period last year, citing higher costs and acquisition charges.

The Woonsocket, R.I.-based company reported first-quarter net income of $738.4 million, or 50 cents per share, down from $745 million, or 51 cents per share, in the year-ago period. Revenue rose 10%, however, to $23.39 billion from $21.33 billion.

Excluding buyout costs related to its acquisition of 529 Longs Drugs stores, the company posted adjusted earnings of 55 cents per share, beating estimates.

On average, Wall Street analysts expected a profit of 54 cents per share on revenue of $23.64 billion.

The company said that same-store sales, considered a key indicator of a retailer's health, rose 3.3% from the previous year, while the retail segment of its business jumped 13.9%. All of the company's other major business segments saw revenue gains in the quarter.

CVS raised its full-year 2009 profit forecast by 2 cents, to a range of $2.55 to $2.63 per share, excluding items. The company said it expects same-store sales to improve and greater revenue from pharmacy benefits management.

CVS shares rose 56 cents, or 1.75%, in morning trading Tuesday.

We had removed shares of CVS from our "Recommended" list on July 9, when the stock was trading at $38.79. The company has a 0.94% dividend yield, based on Friday's closing stock price of $32.03. The stock has technical support in the $23-25 price area. If the shares can firm up, we see overhead resistance around the $35-$36 levels. We would remain on the sidelines for now.

CVS Caremark is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.

Emerson Electric Profit Plummets 32%, Missing Views

Tech company

Emerson Electric

(EMR) - Get Report

said Tuesday that its fiscal second-quarter profit fell 32% from last year, falling short of analyst expectations.

The St. Louis-based company reported fiscal second-quarter net income of $373 million, or 49 cents per share, compared with $547 million, or 69 cents per share, in the year-ago period. Excluding restructuring charges, adjusted earnings were 53 cents per share.

Revenue fell 16% from the same period last year to $5.09 billion.

These results missed the average Wall Street analyst estimate of 54 cents per share on revenue of $5.12 billion.

Emerson said it plans to cut up to 14,000 jobs in 2009, reflecting weaker demand for its products, which include garbage disposal and heating and cooling units.

The company did, however, reaffirm its full-year 2009 guidance for earnings of $2.40 to $2.60 per share on sales of $21 billion to $21.7 billion. On average, Wall Street analysts expect EPS of $2.40.

Emerson shares fell 44 cents, or 1.1%, in morning trading Tuesday.

We had removed shares of EMR from our "Recommended" list on Aug. 18, when shares traded at $49.43. The company has a new dividend yield of 3.53%, based on last night's closing stock price of $37.35. The stock has technical support in the $30 price area. If the shares can firm up, we see overhead resistance around the $39-$43 price levels. We would remain on the sidelines for now.

Emerson is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.

Automatic Data Processing Reports In-Line Profit

Business outsourcing company

Automatic Data Processing

(ADP) - Get Report

said Tuesday that its third-quarter profit fell 3% from the same period last year, citing a weak economy and negative currency effects.

The Roseland, N.J.-based company reported fiscal third-quarter net income of $402.5 million, or 80 cents per share, down 3% from $413.6 million, or 79 cents per share, in the year-ago period. The EPS increase was due to the company having fewer shares outstanding in the current quarter.

Total revenue slumped 2% to $2.37 billion, from $2.43 billion in the same period last year. ADP said that the stronger dollar hurt its revenue by over 3%age points.

On average, Wall Street analysts expected net income of 80 cents per share on revenue of $2.39 billion.

Employer services revenue increased only 1% as the weakening economy hindered sales, retention and employment levels. The slowing U.S. economy also hurt Automatic Data Processing's payroll and payroll tax filing business, as revenue in that operation fell 3%.

ADP implied full-year earnings of $2.40 per share for fiscal 2009, while analysts expect $2.38 per share.

ADP shares rose $1.06, or 3%, in Tuesday morning trading.

We had removed shares of ADP from our "Recommended" list back on Oct. 6 when the stock was trading at $41.28. The company has a 3.79% dividend yield, based on last night's closing stock price of $34.86. The stock has technical support in the $30-$33 price area. If the shares can firm up, we see overhead resistance at the $39-$41 levels. We would remain on the sidelines.

Automatic Data Processing is not recommended at this time, holding a Dividend.com DARS 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.