Men's Wearhouse Shares Jump on Earnings Beat

Clothing retailer and tuxedo rental chain

The Men's Wearhouse, Inc.

(MW)

late Monday delivered fiscal first-quarter earnings that fell significantly from last year, but still beat analysts' estimates.

The Houston-based company reported first-quarter net income of $5.3 million, or 10 cents per share, down 46% from $9.9 million, or 19 cents per share, in the year-ago period.

Total sales in the latest quarter declined 6% to $464.1 million, compared with $491.1 in the same period last year.

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These results were enough to beat analysts' estimates. On average, Wall Street analysts expected a net loss of 1 cent per share on sales of $459.3 million.

Tuxedo rentals, which gained 1.7%, helped offset a clothing sales decline of 7.6%.

Men's Wearhouse predicted a fiscal second-quarter profit of 56 cents to 60 cents per share, and a sales decline of 3% to 5%. On average, analysts expect a profit of 56 cents per share on sales of $518.3 million.

The company also predicted a same-store sales decline of 4% to 6%, but a rise of 3% to 5% in tuxedo rental revenue. Same-store sales are considered an important measure of a retailer's health, because they measure the performance of stores open at least one year.

Men's Wearhouse shares rose $2.32, or +13%, in morning trading Tuesday.

The Bottom Line

We have avoided shares of MW since our early June coverage began, and the stock was trading at $19.80. The company has a 1.57% dividend yield, based on last night's closing stock price of $17.87. The stock has technical support in the $12.50-$15.00 price area. If the shares can gain on this morning's momentum, we see overhead resistance around the $22 price level. We would remain on the sidelines for now.

The Men's Wearhouse is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.

Texas Instruments Shares Rise After Raising Forecast

Semiconductor maker

Texas Instruments

(TXN) - Get Report

raised its second-quarter earnings and profit forecast late Monday, sending its shares rising.

The Dallas-based company said it now expects second-quarter revenue to range from $2.3 billion to $2.5 billion, compared to previous estimates of $1.95 billion to $2.4 billion.

The company also raised its profit guidance to a range of 14 cents to 22 cents per share, from 1 cent to 15 cents per share.

Texas Instruments cited stronger performance specifically in its analog business for the raised guidance. Vice President Ron Slaymaker said that "of our major product lines, analog is by far the biggest driver of sequential growth this quarter, although all major product lines are growing."

The company is also seeing expected seasonal benefits from calculator sales. Texas Instruments shares rose $1.10, or +5.6%, in morning trading Tuesday.

The Bottom Line

We have avoided shares of TXN since our early June coverage began, when the stock was trading at $31.24. The company has a 2.23% dividend yield, based on last night's closing stock price of $19.77. The stock has technical support in the $14-$16 price area. If the shares can firm up, we see overhead resistance around the $24 price levels. We would remain on the sidelines despite this positive news update.

Texas Instruments is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.

Callaway Golf Slashes Dividend to 1Cent a Share

Callaway Golf Company

(ELY) - Get Report

said late Monday that it will slash its upcoming second-quarter dividend payout to 1 cent per share.

The Carlsbad, Calif.-based company, which makes a multitude of golf products under its namesake brand, among others, citied strong economic headwinds and a desire to preserve its cash position for the 85% dividend reduction. It had previously paid a 7-cent-per-share quarterly dividend.

Callaway said the dividend reduction will save the company $15.2 million annually.

"The macroeconomic and foreign currency headwinds that negatively impacted the first quarter continue to impact our second quarter," said CEO George Fellows in a statement. He added that the company expects second-quarter earnings similar to those achieved in the first quarter.

Callaway anticipates the second half of 2009 to bring some relief, however, as foreign currency effects subside, and the company realizes the benefits of various cost-cutting measures.

Callaway shares fell 87 cents, or -12%, in morning trading Tuesday.

The Bottom Line

We removed shares of ELY from our "Recommended" list on Oct. 6, when the shares traded at $12.37. The company will now have a dividend yield of .55%, based on last night's closing stock price of $7.28.

The stock has technical support in the $5-$6 price area. If the shares can rebound from this morning's news, we see overhead resistance around the $9 price level. We would remain on the sidelines for now.

Callaway Golf Company is not recommended at this time, holding a Dividend.com DARS Rating of 3.0 out of 5 stars.

Navistar's Profit Plunges 94%

Truck and engine maker

Navistar International Corporation

(NAV) - Get Report

said its second-quarter profit nearly vanished, in what the company called the worst market conditions in 47 years.

The Warrenville, Ill.-based company reported second-quarter net income of $12 million, or 16 cents per share, down 94% from $211 million, or $2.88 per share, in the year-ago period.

Excluding one-time charges, including a litigation settlement, Navistar saw adjusted earnings of 60 cents per share. Revenue in the latest quarter fell nearly 30% to $2.81 billion, from almost $4 billion last year.

Both adjusted profit and revenue results badly missed Wall Street estimates. On average, analysts expected a profit of 94 cents per share on revenue of $3.03 billion.The company said it saw weak sales in "every part of

its commercial business," and was struggling under "market conditions not seen since 1962."

Navistar also reduced its full-year earnings outlook to $2.80 to $3.10 per share, excluding items, down from $5.10 to $5.60 per share. Including the impact of a litigation settlement, however, the company sees $5.20 to $5.50 per share.

On average, analysts expect full-year earnings of $5.03 per share, excluding items.

Navistar shares gained 63 cents, or +1.5%, in morning trading Tuesday.

The Bottom Line

Shares of NAV are off 52-week highs of $75 a share. The stock has technical support in the $31 price area. If the shares can rebound from this morning's shortfall, we see overhead resistance coming up around the $51 price level. We do not currently rate this non-dividend paying stock at this time, but we do watch the engine manufacturer very closely.

Navistar International does not currently pay a dividend.

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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.