Dividend.com: Yum! Brands' Profit Pangs

The company said its fourth-quarter earnings were lower, but it expects to beat estimates in 2009.
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Yum! Brands Fast-Food Profit Falls 12% in the Fourth Quarter

Yum! Brands

(YUM) - Get Report

, operator of the Pizza Hut, KFC and Taco Bell brands, reported fourth-quarter profit fell 12% to $204 million, or 43 cents per share, compared with $231 million, or 44 cents per share, last year.

Same-store sales, or sales at locations open at least one year, rose 2% during the fourth quarter in the U.S., as sales rose 8% to $11.28 billion from $10.42 billion a year earlier.

Looking ahead, management sees 2009 EPS coming in around $2.10, which is slightly above analyst expectations for $2.08 for the year.

We have avoided shares of Yum! Brands since our early June coverage began, when the stock was trading at $37.89. The company has a 2.69% dividend yield, based on last night's closing stock price of $28.27. The company does have technical support in the $20 to $22 area if shares hit any bumps in the road. The company does have initial overhead resistance in the $33 to $35 area. We would remain on the sidelines for now.

Yum! Brands is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.

ITT Fourth-Quarter Results Benefit From Defense Sales

Shares of

ITT

(ITT) - Get Report

are up 2% so far today after the company reported fourth-quarter profit rose 17% to $185.5 million, or $1.02 per share, from $158.3 million, or 86 cents per share.

The company said revenue rose over 16% to $2.94 billion, on the performance of the company's defense electronics and services segment, which reported a 39% spike in sales.

Looking ahead, management is reaffirming its prior 2009 EPS guidance of $3.60 to $4.

We had removed shares of ITT from our "Recommended" list on Sept. 9, when the stock traded at $ 61.73. The company has a 1.55% dividend yield, based on last night's closing stock price of $45.05. The stock has technical support at the $35 price level. If that fails to hold, we could possibly see the $27 area come into play. If the shares can firm up, we see overhead resistance around the $51 to $52 price points.

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

Kraft Foods Shares Fall on Pension Worries

Kraft Foods

(KFT)

shares are down over 8% after the food maker and owner of many different household brands cut its 2009 guidance because of the stronger dollar and pension costs.

The company's volume took a hit in the fourth quarter, after consumers were resistant to higher prices the company took to offset higher input costs.

Looking ahead, management reduced its 2009 earnings guidance to $1.88 per share from at least $2 per share.

We put the stock on our "Recommended" list on Jan. 4, when the stock traded at $27.34. The company has a 4.04% dividend yield, based on last night's closing stock price of $28.74. Despite the shortfall, we are sticking with the stock at this point. Pension issues are a concern for many companies that have a huge workforce. Kraft Foods has 103,000 employees. We will closely monitor the stock as we move forward, in the event a ratings change may be warranted.

Kraft Foods is a "Recommended" stock at this time, holding a Dividend.com Rating of 3.5 out of 5 stars.

Time Warner Takes $16 Billion Fourth-Quarter Loss

Time Warner

(TWX)

shares are flat so far today, after the company reported a fourth-quarter loss of $16 billion, or $4.47 a share, compared with a profit of $1.02 billion, or 28 cents a share, a year earlier.

The company said declines in advertising revenue at AOL and Time were partly offset by strong performances at its cable networks. Overall, revenue dropped 3% to $12.3 billion.

Looking ahead, management sees profit flat with 2008 results.

We had removed shares of Time Warner from our "Recommended" list back on Sept. 15, when the stock traded at $14.12. We had added the shares to the list on Aug. 12 at a price of $15.88. The company has a dividend yield of 2.56%, based on last night's closing stock price of $9.78. The stock has technical support in the $7 to $9 price area. If the shares can stabilize and begin to move up, the $11 to $13 provides the key level of initial overhead resistance.

Time Warner is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.

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.