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PetSmart Q2 Profit Beats View, Provides Strong Forecast (PETM)

8/19/2010 8:57:00 AM
Referenced Stocks:PETM

Pet products retailer PetSmart, Inc. ( PETM ) on Thursday said its second quarter profit rose 24% from last year, and provided guidance that would meet or exceed analyst expectations.

The Phoenix-based company reported second quarter net income of $48.4 million, or 41 cents per share, compared with $39 million, or 31 cents per share, in the year-ago period. Revenue rose almost 7% from last year, to $1.4 billion.

On average, Wall Street analysts expected a smaller profit of 36 cents per share, on lower revenue of $1.39 billion.

Looking ahead, the company forecast third quarter profits to range from 35 cents to 39 cents per share, which straddles the average analyst estimate of 37 cents.

For the full year, it said it expects earnings of $1.91 to $1.99 per share, which would exceed analyst estimates for $1.90 per share.

PetSmart shares rose $2.08, or +6.9%, in premarket trading Thursday.

The Bottom Line
Shares of PETM have a 1.66% dividend yield, based on last night's closing stock price of $30.15. The stock has technical support in the $26-$28 price area. If the shares can firm up, we see overhead resistance around the $32-$34 price levels. We would remain on the sidelines for now.

PetSmart, Inc. ( PETM ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

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