Weight Watchers Profit, Revenue Beat Expectations (WTW)


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Weight control specialists Weight Watchers International, Inc. ( WTW ) said late Thursday that its first quarter profit fell 5.7% from last year, but adjusted results still beat analyst expectations.

The New York-based company reported first quarter net income of $44.6 million, or 58 cents per share, compared with $47.3 million, or 61 cents per share, in the year-ago period. Revenue fell 1% from last year, to $388 million.

On average, Wall Street analysts expected a smaller profit of 56 cents per share, on lower revenue of $365.7 million.

Looking ahead, the company reaffirmed its full-year 2010 earnings outlook of $2.25 to $2.50 per share.

CEO David Kirchhoff said in a statement that "Trends in the second quarter of fiscal 2010 have been much more favorable following the launch of our Spring marketing campaigns."

Weight Watchers shares were mostly flat in premarket trading Friday.

The Bottom Line
We have avoided shares of WTW since our early June 2008 coverage began, when the shares traded at $42. The company has a 2.54% dividend yield, based on last night's closing stock price of $27.53. The stock has technical support in the $24 price area. If the shares can firm up, we see overhead resistance around the $30-$32 price levels. We would remain on the sidelines for now.

Weight Watchers International, Inc. ( WTW ) 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 here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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