State Street Shares Get Chopped in Half
State Street shares are down 50% this morning after the bank reported fourth- quarter profit dropped 71%.
The company reported fourth-quarter earnings of $65 million, or 15 cents per share, compared with $223 million, or 57 cents per share, in the year-ago quarter.
Results were hurt by $51 million in investment losses during the quarter -- compared with a loss of just $4 million in the fourth quarter of 2007. Additionally, expenses rose 19% to $2.59 billion.
Management surprise the Street with its disclosure that the company faces the risk of further big losses due to credit exposures.
We have avoided the shares of State Street since our early June coverage began, when shares were trading at the $68 level. The stock is now trading at technical support levels it had been at in 1997. If the $19 fails to hold, we may see next support area which is back to 1993 lows of $10 to $11 a share. We would avoid bottom-fishing in the stock and look elsewhere for now.
State Street is not recommended at this time, holding a Dividend.com Rating of 2.5 out of 5 stars.
Northern Trust Shares Bouncing Off Earlier Lows After State Street News
is trying to come back from earlier lows hit this morning on the weak report and outlook from State Street.
Investors were selling some of the regional banks aggressively this morning, as many try to get out of financials that they feel may get hit next. Many investors have been bottom-fishing in the financials, and are paying the price for playing in a sector that has many uncertainties.
Northern Trust announced plans last month to cut about 4% of its staff to reduce costs and streamline operations amid the weakening economy.
We removed Northern Trust from our "Recommended" list on Sept. 29, when the stock was trading at $79.90 a share. The company has a 2.19% dividend yield, based on Friday's closing stock price of $51.08. The company does have long-term technical support around the $30 per share level, last hit in 2003. If the shares can firm up and begin to move higher, we see overhead resistance in the $57 to $62.
Northern Trust is not recommended at this time, holding a Dividend.com Rating of 2.9 out of 5 stars.
Regions Financial Hit Historic Lows
shares are down over 10% so far this morning, after the company reported record fourth-quarter losses tied to a $6 billion impairment charge.
The company posted a loss of $6.24 billion, or $9.01 per share, compared with a profit of $70.6 million, 10 cents per share, during the fourth quarter of 2007.
The company set aside $1.15 billion to cover loan losses in 2008. The bank reserved just $358 million for loan losses during the fourth quarter of 2007.
Management said they were encouraged by steps the government has taken to stabilize the housing market and revitalize the economy, but that there is no quick fix for credit quality issues currently plaguing the financial services industry.
We have avoided shares of Regions since our early June coverage began, when the stock was trading at $15.45. The company has a 6.59% dividend yield, based on Friday's closing stock price of $6.07. The stock is now trading at historic lows with little technical support at this point. If the company is able to turn things around, we see overhead resistance in the $8 to $10 price area. We would look elsewhere for better investment opportunities.
Regions Financial is not recommended at this time, holding a Dividend.com Rating of 2.5 out of 5 stars.
Parker Hannifin Trims 2009 Profit Numbers
shares are down slightly after warning that 2009 profit guidance will be lower, as it expects demand to continue to fall.
Management said it has put implemented workforce and expense reductions throughout the company and contingency plans are in place should further actions become necessary.
The new EPS guidance is for between $3.85 and $4.25 for the fiscal year ending in June, down from previous guidance of $5.35 to $5.75.
We had removed shares of Parker Hannifin from our "Recommended" list back on June 26, when shares traded at $70.05. The company has a dividend yield of 2.51%, based on Friday night's closing stock price of $39.77. The stock has technical support in the $31 to $33 price area. If that fails to hold, we could see the $22 to $23 level come into play. On the flipside, if shares can begin to firm up, we see overhead resistance first at the $45 level and then again at the $50 level. We would remain on the sidelines for now.
Parker Hannifin is not recommended at this time, holding a Dividend.com Rating of 3.3 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.