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.

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