Wal-Mart Fourth-Quarter Earnings Hampered by Lawsuit, but Beats Guidance
were up more than 3% in early trading Tuesday, after the company reported fourth-quarter earnings that exceeded its own estimates.
The world's largest retailer said its fourth-quarter income from continuing operations was $3.792 billion, or 96 cents per share, down 7.7% from the same quarter in the previous year, during which the company earned $4.096 billion, or $1.06 per share. These recent numbers include a $255 million charge related to a recent lawsuit settlement. Analysts had been expecting EPS of 99 cents per share, while the company itself had issued guidance recently of 91 to 94 cents per share.
Excluding the charge from the lawsuit, Wal-Mart earned $1.03 per share.
Total sales for the fourth quarter rose to $109.12 billion, up from sales of $107.34 billion in the year-ago period. Analysts were expecting $109.1 billion in sales. Sales at stores open at least a year (same-store sales) rose 2.8% in the quarter.
As for the full year, the company reported EPS for fiscal year 2009 of $3.35, up 6.0% from the previous year's EPS of $3.16. Excluding the litigation charge, full-year EPS was $3.42.
Wal-Mart issued guidance for first-quarter fiscal 2010 EPS of between 72 cents and 77 cents per share, placing full-year estimates between $3.45 and $3.60.
We had removed shares of Wal-Mart from our "Recommended" list back on Oct. 7, when they were trading at $57.90. The company has a dividend yield of 2.04%, based on Friday night's closing stock price of $46.53.
The stock recently broke some technical support in the $49 to $50 price area. We may now see the $42 to $43 level come into play. If the shares can firm up, we see overhead resistance in the $50 to $52. We would still avoid the shares at this current time.
Wal-Mart is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Daimler Reports Nearly $2 Billion Fourth-Quarter Loss
, which produces Mercedes-Benz automobiles, reported Tuesday that it lost nearly $2 billion in the fourth quarter of 2008.
The company said it lost 1.53 billion euros in the quarter, or nearly $2 billion, compared to a profit of 1.7 billion euros in the same quarter of the previous year.
Daimler owns a nearly 20% stake in Chrysler, which saw big losses and charges in the quarter as the auto industry plummeted amid the global economic slowdown. Daimler sold more than 80% of Chrysler to New York-based private equity firm Cerberus Capital Management LP in 2007. Daimler said that there were ongoing talks about selling the remaining nearly 20% stake in Chrysler.
Daimler auto sales dropped 12% in the fourth quarter, to 23.2 billion euros, or $29.6 billion, compared with 26.5 billion euros in the year-ago period. The number of vehicles the company sold fell 17% to 480,055 from year-ago sales of 575,353.
For the full year 2008, the company earned 1.4 billion euros, which is a 65% decline from what the company earned in 2007. On average, analysts expected annual profits of 3 billion euros for 2008. Sales also dropped 4% on the year, to 95.9 billion euros from 99.4 billion euros.
The automaker said that guidance for 2009 would be difficult given the current economic climate. The company estimated that global auto demand could drop as much as 10% this year. To combat the decline, Daimler said it will freeze salaries for managers, reduce real estate spending, and time production delays to better offset unsold inventories. The company said it is not planning any large-scale layoffs.
We have avoided shares of Daimler since our early June coverage began, when the stock was trading at $70.12. The company has a 10.3% dividend yield based on Friday night's closing stock price of $30.96.
We do not believe the current dividend payout can be sustained. The stock has technical support near the all-time low level of $24 per share. The stock is getting close to potentially breaking that critical level. If the shares can firm up, we see overhead resistance around the $39 level. We would look elsewhere for better investment opportunities at this time.
Daimler is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars.
Teva Pharmaceutical Reports Fourth-Quarter Loss on Buyout, but Raises Dividend
rose nearly 5% in early trading Tuesday, after the company reported a fourth-quarter loss due to a recent acquisition, but raised its quarterly dividend by 33%.
The Israel-based generic drug maker said it lost $688 million, or 88 cents per share, in the fourth quarter. In the same period a year ago, the company posted a profit of $570 million, or 69 cents per share. However, fourth-quarter revenue rose 11% to $2.85 billion, from $2.58 billion in the year-ago period.
Excluding special items, such as acquisition costs and other expenses, Teva earned 76 cents per share. Analysts expected profit of 73 cents per share on revenue of $2.94 billion.
Teva closed a $7.5 billion acquisition of rival Barr Pharmaceuticals back in December. The costs associated with this acquisition were mainly to blame for the fourth-quarter loss, the company said.
For the full year 2008, the company earned $635 million, or 78 cents per share, compared with profit of $1.95 billion, or $2.38 per share, in 2007. Full-year revenue rose to $11.09 billion from $9.41 billion.
Teva also announced an increase in its quarterly dividend payout, bumping its dividend up by 33% to nearly 15 cents per share. Teva, like many foreign stocks that pay a dividend, often varies its payouts from quarter to quarter, making its annual dividend yield difficult to gauge.
We have avoided shares of Teva since our early June coverage began and the stock was trading at $45.05. The company has a dividend yield of 1.23%, based on last night's closing stock price of $40.67.
The stock has technical support in the $34 to $37 price area. If the shares can continue to move up, we see overhead resistance around the all-time high levels of the $49 to $50 price area. We would remain on the sidelines for now, but we will be putting this on our "upgrade" watchlist.
Teva Pharmaceutical is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Medtronic Shares Flying High on Third-Quarter Earnings Jump
Shares of medical technology company Medtronic rose more than 6% in early trading Tuesday, after the company reported fiscal third-quarter earnings that beat analyst EPS estimates (when disregarding special charges).
For the third quarter, Medtronic said it earned $723 million, or 65 cents per share, compared with a profit of only $77 million, or 7 cents per share, in the year-ago period. Earnings in the same quarter of the previous year were hampered by lawsuit charges and acquisition costs.
Revenue for the quarter rose 3% to $3.49 billion, compared to $3.41 billion in the year-ago period.
Excluding special charges, Medtronic earned 71 cents per share, while analysts on average expected profit of 70 cents per share on revenue of $3.51 billion.
The following is a breakdown of the performance of the company's key divisions, compared to the year-ago period:
Cardiac Rhythm division -- sales fell 4% to $1.17
Cardiovascular unit -- sales gained 10%to $565 million
Spinal unit -- gained 3% to $832 million
Neuromodulation product sales -- rose 11% to $354 million.
We have avoided shares of Medtronic since our early June coverage began, and the stock traded at $50.37. The company has a dividend yield of 2.29%, based on Friday night's closing stock price of $32.81.
The stock has technical support around the $28 level. If the shares can firm up and move higher, the $37 to $40 price area is the first key level of overhead resistance. We would remain on the sidelines for now, but we did like the company's results.
Medtronic is not recommended at this time, holding a Dividend.com Rating of 3.2 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.