Weight Watchers Q2 Profit Falls, but Still Beats View; Raises Low-End of Guidance (WTW)

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Weight management services company Weight Watchers International, Inc. ( WTW ) on Friday said its second quarter profit fell 4% from last year, due to higher marketing spending.

The New York-based company reported second quarter net income of $56.3 million, or 73 cents per share, compared with $58.8 million, or 76 cents per share, in the year-ago period. Revenue rose 1% from last year, to $376.7 million.

On average, Wall Street analysts expected a slightly smaller profit of 72 cents per share, slightly lower revenue of $366.9 million.

Looking ahead, the company raised the low-end of its full-year guidance. It now expects 2010 earnings to range from $2.35 to $2.50 per share, compared with a prior outlook of $2.25 to $2.50 per share. Meanwhile, analysts expect $2.44 for the year.

Weight Watchers shares rose 21 cents, or +0.8%, 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 $27.60. 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 The NASDAQ OMX Group, Inc.

Created by Dividend.com

This article appears in: Investing , Stocks

Referenced Stocks: WTW



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