Nike is near new highs but still a great buy. Darden Restaurants might be tempting but we’re taking a pass.
Nike’s Q2 Profit Beats View
Athletic footwear and apparel maker Nike, Inc. late Thursday said its second quarter profit fell 4% from last year, but results still beat analyst expectations.
The Beaverton, Ore.-based company reported fiscal second quarter net income of $375 million, or 76 cents per share, compared with $391 million, or 80 cents per share, in the year-ago period. Revenue fell 4% from last year, to $4.4 billion.
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On average, Wall Street analysts expected a smaller profit of 71 cents per share, on matching sales of $4.4 billion.
Nike shares rose 2% to $64.55 early Friday.
The Bottom Line
We have been recommending shares of NKE since Sept. 17, when the stock was trading at $57.18. The company has a dividend yield of 1.71%, based on Thursday night’s closing stock price of $63.25.
Nike is a “recommended” dividend stock, holding a Dividend.com rating of 3.5 out of five stars.
Darden Restaurants Q2 Profit Edges Higher
Restaurant chain operator Darden Restaurants ( DRI – news – people ) said Friday that its second quarter profit edged up 1% from last year, beating estimates, but narrowed its full-year earnings forecast.
The Orlando-based company, which operates the Red Lobster and Olive Garden chains, among others, reported fiscal second quarter net income of $60.3 million, or 43 cents per share, compared with $59.7 million, or 43 cents per share, in the year-ago period. Revenue fell 2% from last year, to $1.64 billion.
On average, Wall Street analysts expected a slightly smaller profit of 42 cents per share, albeit on slightly higher revenue of $1.65 billion.
Looking ahead, the company said it now expects full-year 2010 profits to range from $2.65 to $2.76 per share, compared to a prior forecast of $2.59 to $2.85 per share. Analysts currently expect $2.75 per share for the year.
Darden Restaurants shares were up 5.3% to $34.49 in early morning trading.
The Bottom Line
We removed shares of DRI from our “recommended” list back on Sept. 30, when the stock was trading at $36.15. The company has a dividend yield of 3.05%, based on last night’s closing stock price of $32.75. The stock has technical support in the $26-$30 price area. If the shares can firm up, we see overhead resistance around the $35 price level. We would remain on the sidelines for now.
Darden is not recommended at this time, holding a Dividend.com rating of 3.4 out of five stars.
