Target Misses the Mark on Fourth-Quarter Earnings
said Tuesday that its fourth-quarter profit declined 41% over the same period during the previous year.
The company said that its fiscal fourth-quarter net income was $609 million, or 81 cents per share, compared with $1.028 billion, or $1.23 per share, in the year-ago period.
On average, analysts expected profit of 83 cents per share.
Target said that quarterly sales declined 1.6% year over year, from $19.3 billion to $19 billion. Same-store sales, or sales from stores open at least one year, dropped 5.9%. Same-store sales are considered a key indicator of a retailer's health.
The company's earnings were hurt by losses from its Target credit card division, which reported a pretax loss of $135 million, compared with profit of $189 million in the year-ago period. The company blamed the loss on a $245 million addition to the allowance for doubtful accounts, as more of its credit customers defaulted on their credit card bills.
We have avoided shares of Target since our early June coverage began, when the stock was trading at $52.52. The company has a 2.25% dividend yield, based on last night's closing stock price of $28.43.
The stock has technical support around the $18 level. If the shares can rebound, we see overhead resistance around the $38 to $41 price level. We would remain on the sidelines for now.
Target is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.
Heinz Shares Up on Third-Quarter Results
are up 4% in early trading, after the ketchup maker reported third-quarter profit rose 11% to $242.3 million, or 76 cents per share, for the three months ended Jan. 28, up from $218.5 million, or 68 cents per share, a year earlier.
The company credits raised prices and more budget-conscious consumers eating at home. The company said revenue dropped 7.5% to $2.41 billion from $2.61 billion a year ago, partly on the effects of the stronger U.S. dollar.
Looking ahead, management still expects 2009 profit will grow by 9% to 11% for per-share profit in a range of $2.87 to $2.91.
We had added shares of Heinz back on our "Recommended" list on Jan. 24, when the stock traded at $35.06. The company has a 5.19% dividend yield, based on last night's closing stock price of $31.97. We are still positive on the shares here, but will keep subscribers posted for any potential changes.
Heinz is a "Recommended" stock at this time, holding a Dividend.com Rating of 3.5 out of 5 stars.
PG&E Raises Dividend Payout Following Fourth-Quarter Report
are up 3% in early trading today, after the company reported fourth-quarter profit more than doubled to $517 million, or $1.37 a share, from $203 million, or 56 cents a share in the year-ago period, as a result of a tax settlement.
The company beat the consensus EPS estimates by 5 cents and raised its quarterly dividend payout to 42 cents from 39 cents.
Looking ahead, management expects 2009 earnings of $3.20 to $3.36 a share, compared to the Wall Street target of $3.18 a share.
We have been recommending shares of PG&E since Oct. 30, when the stock was trading at $35.60. The company will now have a dividend yield of 4.80%, based on the higher quarterly dividend payout and last night's closing stock price of $25. We are still positive on the shares here, but will keep subscribers posted for any potential changes.
PG&E is a "Recommended" stock at this time, holding a Dividend.com Rating of 3.5 out of 5 stars.
Macy's Profit Slips 60%, but Adjusted Earnings Beat Estimates
were up over 5% in early trading Tuesday, after the company reported adjusted fourth-quarter earnings that exceeded analyst expectations.
The famous retailer reported a fiscal fourth-quarter profit of $310, or 73 cents per share, compared with $750 million, or $1.73 per share, in the same period a year ago. Sales in the quarter dropped 7.7%, to $7.9 billion, from the $8.6 billion the company reported in the year-ago period.
The latest earnings report includes more than $200 million in expenses associated with a large-scale company reorganization, as well as multiple store closings and brand acquisitions. Disregarding these special one-time charges, the company saw a quarterly profit of $1.06 per share, higher than its previous guidance of $1 to $1.02 per share. On average, analysts were expecting EPS of $1.01 a share.
For the full year 2008, Macy's reported net income of $280 million, down from $893 million in fiscal 2007. Sales fell 5.4%, to $24.9 billion from $26.3 billion, while same-store sales declined by 4.6% from the previous year.
For fiscal 2009, Macy's maintained its earnings outlook of 40 cents to 55 cents a share, excluding restructuring costs.
We removed shares of Macy's from our "Recommended" list on Sept. 17, when the stock was trading at $20.17. The company has a dividend yield of 2.70%, based on last night's closing stock price of $7.40.
The stock has technical support at the $5 level. If the shares can rebound, we see overhead resistance around the $11 to $12 price area. We would remain on the sidelines for now despite today's bounce.
Macy's is not recommended at this time, holding a Dividend.com Rating of 2.7 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.
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.