Cisco’s (CSCO) dividend increase and Wal-Mart’s (WMT) overseas growth are among this morning’s earnings headlines. But the two stocks are headed in opposite directions.
Cisco shares – which had fallen on hard times since April – are up 7.5% this morning on the strength of the company’s 56% earnings increase. Investors are also flocking to the tech stock for the bigger dividend it plans to pay. The company announced that it is upping its quarterly dividend from 8 cents to 14 cents.
Wal-Mart’s second-quarter profits also grew. But shares of America’s largest retailer have retreated 3% this morning.
The company’s $1.18-per-share in earnings was a 5.7% improvement from the $1.09 per share it earned in the same quarter a year ago. However, sales fell short of analyst expectations, negating the better-than-anticipated profits and strong full-year earnings outlook.
Despite today’s pullback, Wal-Mart’s future looks bright. International sales are growing rapidly, increasing 6.4% last quarter. And full-year earnings guidance improved to a $4.83-$4.93 range from a $4.72-$4.92 back in February.
But Wal-Mart’s growth outlook couldn’t match Cisco’s.
Revenue from Cisco’s recent purchase of video company NDS will start to kick this quarter – one reason the company expects revenue growth as high as 6%.
Should profits continue to increase at the clip they did last quarter, perhaps the company’s dividend – which is just a year old – will continue to swell.
If so, that should attract more investors back to what was once the world’s most valuable company.
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