General Dynamics Overcomes Slower Combat Sales

General Dynamics ( GD) reported that its third-quarter earnings rose 16% on higher sales in its shipbuilding unit and information technology business.

The company's product mix led to the good sales figures. The company saw a nearly 13% jump in its marine division, which makes warships and submarines for the Navy. Sales in the company's information technology division gained nearly 5%, while the Gulfstream private jet unit saw sales rise about 4%. The only sales dip was in the company's combat systems division, which makes tanks, armored vehicles and other battle equipment.

The company slightly raised its full-year forecast to $6.10 per share, from a previous range of $6 to $6.05 per share. Consensus estimates currently sit at $6.13 per share.

We had removed GD from our "recommended" list back on Sept. 22, when shares were trading at $82.39. The company has a dividend yield of 2.52%, based on last night's closing stock price of $55.48. The company is fairly attractive at 9 times 2009 EPS estimates, and we may reconsider our current ratings stance if shares and the economy can stabilize a bit.

General Dynamics is not recommended at this time, holding a Dividend.com rating of 3.4 out of 5 stars.

Higher Coal Volumes Propel Norfolk Southern

Norfolk Southern ( NSC) just reported that its revenue for the third quarter rose 23% to $2.89 billion. The results were 16 cents ahead of estimates.

The company saw a big jump in its coal revenue, which spiked 52% to $876 million in the quarter. Management said total traffic fell 1% in the quarter, as sinking carloads of automobiles and housing-related products were countered by higher coal volumes. Production and plant shutdowns at U.S. automakers will be a negative and will likely hurt the company's results next quarter.

NSC has been the best performer of all the railroad stocks this year, despite giving up the bulk of this year's earlier gains.

We had taken shares of NSC off our "recommended" list back on Aug. 19, when shares were trading at $69.45. The company currently has a 2.38% dividend yield, based on last night's closing stock price of $53.87. We will be watching the economic numbers closely and put NSC on the list of potential upgrades if the current slowdown shows signs of letting up. For now, we would be cautious on these shares, as well as on the overall railroad sector.

Norfolk Southern is not recommended at this time, holding a Dividend.com rating of 3.2 out of 5 stars.

Tupperware Sales Jump 13% on Overseas Growth

Tupperware Brands ( TUP) just reported a 13% increase in sales to $513.1 million for its third quarter, good for 8 cents better than consensus EPS estimates.

The company's sales in emerging markets accounted for 56% of overall sales. The company saw strong growth from its Tupperware segment in Russia, South Africa, Turkey, Indonesia, China and Malaysia/Singapore.

The company also announced it would buy back about $10 million of stock in the fourth quarter and $40 million in 2009.

We had removed shares of TUP from our "recommended" list back on Sept. 2, when shares traded at $34.26. The company currently has a dividend yield of 4.56%, based on last night's closing stock price of $19.30. We believe the strong dollar may start to dampen earnings if recent currency trends continue. The risk/reward has improved for this stock, and we may look for an entry point soon if shares can stabilize.

Tupperware Brands is not recommended at this time, holding a Dividend.com rating of 3.4 out of 5 stars.

Travelers Stock Rebounds, Despite Big Profit Drop

The Travelers Companies ( TRV) reported that hurricane-related losses drove the company's third-quarter profit down 82%.

The company's combined ratio for the quarter rose 20.3 points to 104.7%, with catastrophe losses adding 19.1 points. The combined ratio measures the amount of money insurers pay in claims and expenses compared with how much they receive from writing new business. A ratio above 100 means the insurer pays out more in claims and expenses than it takes in from writing new premiums.

The company also had net realized investment losses of $116 million, which includes impairments of $44 million due to securities issued by failed investment bank Lehman Brothers Holdings.

The company's outlook for 2008 is now an EPS range of $4.90 to $5.10 per share, below its prior estimates of $5.55 to $5.85. Consensus estimates had been for a profit of $5.33 per share.

We have been avoiding TRV shares since our early June coverage began, when shares were trading at $47.25. The company has a dividend yield of 3.19%, based on last night's closing stock price of $36.33. The stock is trading at 8-9 times the low end of 2009 earnings estimates. We believe the shares are flat as far as risk/reward goes, hence we would look elsewhere for potentially better opportunities.

The Travelers Companies is not recommended at this time, holding a Dividend.com rating of 3.3 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.