Pepsi Bottling Group Rejects Combined $6 Billion PepsiCo Takeover Offer
Pepsi Bottling Group
( PBG) said Monday that it is refusing
proposed $6 billion acquisition offer, calling the bid "grossly inadequate."
Pepsi Bottling, which manufactures, distributes and sells PepsiCo's products, said that the $29.50 per share offer made on April 20 does not reflect the company's "true value."
Soft drink giant PepsiCo made a similar offer for its other main bottler,
( PAS), which has so far not made a decision regarding the bid.
Pepsi Bottling pointed out that its latest earnings report, delivered days after PepsiCo's takeover offer, beat analyst expectations, and the company raised its full-year guidance.
Many believe that the deal will still take place, and that PepsiCo will raise its offer to what the bottling company feels is a more appropriate level.
We have avoided shares of PBG since our early June coverage began, and the stock was trading at $31.46. The company has a dividend yield of 2.29%, based on Friday's closing stock price of $31.41. The stock has technical support in the $22-$24 price area. We believe there is a possibility the stock can make a move to the $34-$35 price level. We would remain on the sidelines for now, but we will look for an opportunity if the shares pull back.
Pepsi Bottling Group is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.
Estee Lauder Beats Earings Estimates Despite 70% Profit Drop
said Monday that its fiscal third-quarter profit sank mainly on charges, but shares rallied as results still beat expectations.
The New York City-based company reported net income of $27.2 million, or 14 cents a share, down 70% from $90.1 million, or 46 cents per share, in the year-ago period. Excluding special one-time items, adjusted profit was 16 cents per share.
Sales fell 10% from a year ago to $1.7 billion, partially due to negative impacts of the stronger U.S. dollar.
On average, Wall Street analysts were expecting a profit of 5 cents a share on sales of $1.65 billion, excluding special items.
Estee Lauder said that its results were hampered by a steep drop in sales, as consumers reined in spending in the recession. The company is currently executing a four-year restructuring plan that entails cutting 2,000 jobs, or about 6% of its workforce, and also includes a freeze on merit raises and other initiatives.
Estee Lauder shares rallied $3.31, or 10.6%, in morning trading Monday.
We had removed shares of EL from our "Recommended" list on Oct.6, when they traded at $46.13. The company has a dividend yield of 1.77%, based on last night's closing stock price of $31.13. The stock has technical support in the $25-$28 price area. If the shares can continue today's rebound, we see overhead resistance around the $37-$40 price levels. We would remain on the sidelines for now.
Estee Lauder is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.
Mercury General Operating Profit Falls but Still Beats Estimates
Auto insurance firm
said Monday that despite cost-cutting measures, its first-quarter operating income fell 18% year over year.
The Los Angeles-based company said it earned $96.7 million, or $1.75 a share, compared with a net loss of $4 million, or 7 cents a share, in the year-ago period.
However, operating profit, which is the measuring stick usually used for insurance companies, fell to 83 cents per share, down from $1.02 in the same period last year. This performance was still good enough to beat industry estimates. Oon average, Wall Street analysts expected operating profit of 64 cents per share.
Mercury said that net premiums earned in the quarter fell 8% to $666.1 million, while its combined ratio rose to 96.9%, up from 95.4% in the year-ago period. An insurer's combined ratio is considered the true indicator of its performance, because it represents the percentage of written premiums vs. the amount paid out in claims. The lower its combined ratio, the more money an insurer earns.
Mercury General shares rose 41 cents, or 1.2%, in morning trading Monday.
We had removed shares of MCY from our "Recommended" list on Oct.6, when the stock was trading at $53.91. The company has a 6.96% dividend yield, based on Friday's closing stock price of $33.34. The stock has technical support at the $29 level. If that doesn't hold, we could possibly test the $23 price area. If the stock can firm up, we see overhead resistance around the $45-$46 price levels. We would remain on the sidelines for now.
Mercury General is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.
Entergy Misses Estimates, but Reaffirms Guidance
Electric power operator
reported lower-than-expected first-quarter earnings Monday but reaffirmed its full-year outlook, sending its shares rallying.
The New Orleans-based company reported first-quarter net income of $235.3 million, or $1.20 per share, down 24% from $308.7 million, or $1.56 per share, in the year-ago period. Revenue fell 2.6% to $2.79 billion from $2.86 billion.
On average, Wall Street analysts expected a profit of $1.34 per share on revenue of $3.07 billion.
Entergy cited higher expenses and lower production for the earnings miss, but still reaffirmed its full-year 2009 earnings outlook for a range between $6.70 and $7.30 per share.
Entergy shares rallied $2.65, or 4%, in early trading Monday.
We had removed shares of ETR on Aug.8, when they were trading at $103.24. The company has a dividend yield of 4.45% based on Friday's closing stock price of $66.90. The stock has technical support in the $56-$59 price area. If the shares can gain some momentum here, we see the next level of overhead resistance around $70-$74. We would remain on the sidelines for now.
Entergy 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.