Stronger Dollar and Generic Competition Hurt Pfizer's Results
Global pharmaceutical giant
said Tuesday that its first-quarter profit fell 2% from the year-ago quarter, as the company faced more generic competition and a stronger dollar hurt its overseas results.
The New York City-based company reported fiscal first-quarter net income of $2.73 billion, or 40 cents per share, compared with $2.78 billion, or 41 cents per share, in the year-ago period. Excluding special one-time items, profit was 54 cents per share, down from 61 cents.
Revenue fell 8.3% from the previous year to $10.87 billion, hurt by the stronger dollar.
On average, Wall Street analysts expected net income of 49 cents per share on revenue of $11.08 billion.
Pharmaceutical sales fell 7% from the year-ago quarter, hurt by slowing sales of drugs Zyrtec and Camptosar, which began facing generic competition in January and February 2008, respectively. Flagship cholesterol drug Lipitor's sales fell 13%, while arthritis treatment Celebrex dropped 8%.
Pfizer also lowered its 2009 full-year forecast, to $1.20 to $1.35 per share, from $1.34 to $1.49 per share. These estimates include costs related to the company's acquisition of fellow drugmaker
. Excluding items, however, it still expects earnings of $1.85 to $1.95 a share.
Pfizer shares fell 23 cents, or -1.7%, in morning trading Tuesday.
We had removed the shares of PFE from our "Recommended" list on Nov. 12, when the stock was trading at $16.77. The company has a dividend yield of 4.74%, based on last night's closing stock price of $13.49. The stock has technical support in the $11 price range. If the shares can firm up, we see overhead resistance in the $15-$16 price area. We would remain on the sidelines for now.
Pfizer is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.
Fortune Brands Shares Rise After Slashing Dividend by 57%
said Tuesday that it would cut its dividend by more than half, but its shares rose after the diversified holding company reaffirmed its 2009 full-year guidance.
The Chicago-based company said it expects to report fiscal first-quarter earnings of about 5 cents a share. Excluding one-time items, the company expects about 30 cents per share. On average, Wall Street analysts expect earnings of 18 cents per share.
Fortune also reaffirmed its full-year guidance of $2.00 to $2.50 a share, excluding items.
In order to preserve its cash position, the company said its board approved a 53% reduction in its dividend to an annual rate of 76 cents per share.
Fortune Brands owns such famous consumer products brands as Jim Beam whiskey, Moen faucets and Titleist golf products. The company is set to report first-quarter earnings on May 1.
Fortune Brands shares rose $3.13, or +8%, in morning trading Tuesday.
We removed shares of FO from our "Recommended" list this morning, after the news of the dividend cut. We would prefer to book the gains here and look elsewhere for better dividend stock opportunities.
Fortune Brands is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.
U.S. Steel Swings to $439 Million Loss, Slashes Dividend More Than 80%
United States Steel Corporation
slashed its dividend by 83% Monday, after announcing it lost more than $400 million in the latest quarter, and will offer stock and senior notes in order to help pay off loans.
The Pittsburgh-based company reported a fiscal first-quarter net loss of $439 million, or $3.78 per share, compared with a profit of $235 million, or $1.98 a share, in the year-ago period. The latest quarter included pretax gains of 6 cents per share, while last year's results included 38 cents per share in charges.
Net sales in the first quarter plummeted 40% to $2.75 billion.
These results greatly missed analyst estimates. On average, Wall Street analysts expected a loss of $1.69 per share on revenue of $3.14 billion.
U.S. Steel said that steel shipments dropped 52% in the quarter, while the average selling price of flat-rolled products fell 11% sequentially, but rose 11% from last year.
In order to further control costs, the company announced it would cut its dividend by 83%, to 5 cents per share quarterly. The steelmaker also said it will offer 18 million shares of its common stock and $300 million of senior convertible notes in order to pay off loans due in 2010 and 2012. This stock offering will dilute existing shareholders by 16%.
The company said it expects an operating loss for the second quarter, as uncertainty continues to surround the financial markets and key steel-consuming industries.
U.S. Steel shares fell $1.70, or -6.2%, in morning trading Tuesday. The stock has now fallen more than 86% from its all-time highs reached in June of last year.
We removed shares of U.S. Steel from our "Recommended" list back on July 23, when shares traded at $146.01. It was one of our top calls, along with other energy and commodity-related moves we recommended at the time. The company will now have a .72% dividend yield, based on the company's dividend cut and last night's closing stock price of $27.71.
The stock has technical support in the $20-$21 price area. If the shares can firm up, we see overhead resistance around the $29-$34 price level. We would remain on the sidelines for now.
United States Steel is not recommended at this time, holding a Dividend.com DARS Rating of 2.8 out of 5 stars.
Masco Misses View, Swings to $81 Million Loss, Lowers Guidance
Building products maker
said Monday that it swung to a loss for the first quarter, as the economic recession dented housing construction and consumers spent less money on home improvement projects.
The Taylor, Mich.-based company reported a fiscal first-quarter net loss of $81 million, or 23 cents per share, compared to a profit of $14 million, or less than 1 cent per share, in the year-ago period. Revenue fell 26% to $1.82 billion from $2.45 billion.
On average, Wall Street analysts expected a loss of 12 cents per share on revenue of $1.88 billion.
Masco said that North American sales dropped 24% year over year, while international sales fell 31%. The company closed two operating plants during the quarter, and shed about 3,000 jobs in order to control costs in the face of the sales decline.
The company also lowered its full-year 2009 guidance, now expecting a loss of 15 cents and 35 cents per share, with sales falling 20% to 25% from 2008 levels. Previously, it had predicted a range between breakeven and a loss of 30 cents per share for the year. On average, Wall Street analysts expect a loss of 24% cents per share.
Masco shares fell $1.12, or -11%, in morning trading Tuesday.
We removed shares of MAS from our "Recommended" list on Sept. 23, when the stock was trading at $17.87. We had put it on the list at a price of $19.06 a month earlier. The company has a dividend yield of 3.08%, based on last night's dividend cut and closing stock price of $9.75.
The stock has technical support in the $6-$7 price area. If the shares can firm up, we see overhead resistance around the $12 price point. We would remain on the sidelines for now.
Masco is not recommended at this time, holding a Dividend.com DARS Rating of 2.5 out of 5 stars.
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.