Charles Schwab Profit Falls 29%, but Still Beats ViewCharles Schwab ( SCHW) said early Wednesday that its first-quarter profit fell 29% from the same quarter in the previous year. The San Francisco-based company said its first-quarter profit fell to $218 million, or 19 cents per share, compared with $305 million, or 26 cents per share, in the year-ago period. Total net revenue for the quarter fell to $1.11 billion from $1.31 billion in 2008. On average, Wall Street analysts expected a profit of 15 cents per share on revenue of $1.07 billion. Schwab said that the latest quarterly results include a $26 million pre-tax gain from a debt repurchase, $14 million in pre-tax net impairment losses, and $59 million in pre-tax charges for severance and additional costs relating to expense reduction measures. Schwab shares rose 69 cents, or 4.28%, in early afternoon trading Wednesday. We had removed shares of SCHW from our "Recommended" list on Sept. 15, when they traded at $22.70. The company has a dividend yield of 1.79%, based on Friday's closing stock price of $13.39. The stock does have technical support in the $12-$13 price area. If the shares can stabilize and resume their recent momentum, we see overhead resistance around the $18-$19 levels. We would remain on the sidelines for now. Schwab is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.
Abbott Labs Beats Estimates, Issues In-line GuidanceAbbott Laboratories ( ABT) said Wednesday that its first-quarter profit beat Wall Street estimates, helped by one-time items. The Chicago-based health care products company said its fiscal first-quarter profit came in at $1.44 billion, or 92 cents per share, compared with $938 million, or 60 cents per share, in the year-ago period. This profit was aided by a couple of one-time items, namely, a $797 million gain related to derecognition of a contingent liability, and some contractual payments from longtime partner Takeda Pharmaceutical of Japan.
Excluding these special one-time items, the company earned 73 cents per share. On average, Wall Street analysts expected earnings of 70 cents per share. Global sales edged down slightly to $6.72 billion in the quarter, falling below analyst estimates of $7.07 billion. Abbott cited a stronger dollar as a reason for the downturn. Abbott reaffirmed its full-year 2009 earnings forecast of $3.65 to $3.70 per share, excluding special items. For the fiscal second quarter, the company expects profits of 87 cents to 89 cents per share. Abbott shares fell $2.16, or 4.83%, in late-morning trading Wednesday. We had removed the shares from our "Recommended" list on Oct. 9, when the stock was trading at $55.29. The dividend yield is 2.93%, based on last night's closing price of $49.20. The stock has technical support in the $37-$38 price area. If it can firm up here, we see overhead resistance in the $55-$57 range. We would stay on the sidelines for now. Abbott Labs is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.