Dividend.com: BofNY Mellon Offers Slice

BofNY Mellon Announces $1.2B Share Offering

The bevy of share offerings continued after the bell Monday, as The Bank of New York Mellon ( BK) said it would sell $1.2 billion worth of its own shares.

The New York City-based bank said it would price 42 million shares at $28.75 each, which is slightly below its Monday closing price of $29.55.

Like several other major banks recently, including BB&T ( BBT), U.S. Bancorp ( USB), and Capital One Financial ( COF), Bank of New York seeks to use the money raised via the share offering to pay down its governmental TARP debt.

Bank of New York received about $3.4 billion in TARP funds in the form of a preferred stock investment from the federal government.

Bank of New York shares fell $1.12, or -3.8%, in morning trading Tuesday.

We have avoided shares of Bank of NY Mellon since we initiated coverage back in early June, when shares were trading at $41.15. The company has near-term technical support in the $23-$25 price area. If the shares can continue the recent rebound, we see overhead resistance around the $32-$35 price levels. We would remain on the sidelines for now.

The Bank of New York Mellon is not recommended at this time, holding a Dividend.com DARS Rating of 3.0 out of 5 stars.

Fluor Corp Profit Jumps 60%, Full-Year Outlook Reduced

Engineering and construction company Fluor ( FLR) said Tuesday that its first-quarter profit improved by 60% from a year ago.The Irving, Texas-based company reported first-quarter net income of $204.8 million, or $1.12 per share, up 60% from $137 million, or 74 cents per share, in the year-ago period. Revenue jumped 21% to $5.8 billion, from $4.81 billion in the same quarter last year.

These results beat the average Wall Street analyst expectation for earnings of 93 cents per share on revenue of $5.76 billion.

Fluor's First-Quarter Business Segment Breakdown

  • Oil and gas segment revenue rose 29% to $3.4 billion

  • Industrial and infrastructure segment revenue jumped 48% to $1.2 billion

  • Global services revenue fell 23% to $542 million

  • Power segment revenue slid 20% to $339 million from $422 million

Despite beating estimates in the quarter, Fluor reduced its 2009 full-year profit guidance, now expecting earnings of $3.80 to $4.10 per share. The company had previously forecast $3.90 to $4.20 per share, while analysts, on average, expect $3.76 per share.

Fluor Corp shares rose $1.92, or +4.46%, in morning trading Tuesday.

We recently added shares of FLR to our "Recommended" list and were happy with this quarter's results. We will closely monitor the news flow and keep subscribers updated as to any ratings changes.

Fluor Corporation is a "recommended" dividend stock, holding a Dividend.com DARS Rating of 3.5 out of 5 stars.

Ctrip Shares Spike on Earnings Results

Shares of Ctrip.com ( CTRP) were up 19% in early trading after the leading travel service provider in China said revenue rose to $63 Million, a 17% increase from the same period in 2008.

Hotel reservation revenue amounted to US$27 million for the first quarter of 2009, representing a 9% increase from the same period in 2008 primarily driven by a 17% increase in hotel room reservation volume, which was partially offset by a decrease in commission per room.

Air-ticketing revenue for the first quarter of 2009 were US$27 million, representing a 16% increase from the same period in 2008 primarily driven by a 40% increase in air-ticketing sales volume, which was partially offset by a decrease in commission per ticket.

For the second quarter of 2009, management expects to continue the year-on-year net revenue growth of approximately 10%-15%.

Shares of CTRP are off 52-week highs of $65 per share. The stock has technical support in the $24-$30 price area. If the shares can build off of today's bounce, we see near-term overhead resistance around the $40-$46 price levels. We do not currently rate this non-dividend paying stock, but do follow this China Internet play closely.

Ctrip.com does not currently pay a dividend.

Alpha Natural Resources to Buy Foundation Coal in All-Stock Deal

Foundation Coal Holdings ( FCL) said Tuesday that it is being acquired by fellow coal producer Alpha Natural Resources ( ANR) in all all-stock deal.

The all-stock buyout is valued at approximately $2 billion, the companies said in a joint statement. The terms of the deal include Alpha Natural assuming about $530 million in debt.

The combined company would become the third largest coal producers in the world, with revenue of $4.2 billion last year, along with ownership of a total of coal 59 mines, 14 preparation plants, and combined reserves of more than 2.3 billion tons of coal.

Terms of the deal state that Foundation Coal shareholders will receive 1.084 shares of the new company for each share held, representing around $32.73 per share, which is a 41% premium over Foundation's Monday closing price.

Foundation Coal shares rose $5.40, or +23%, in morning trading Tuesday.

This was good news for our coal stocks that we added to our "Recommended" list last week. We will keep track of further developments within the space, and keep subscribers posted.

Foundation Coal Holdings is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 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.

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