Tag: analyst-report

St. Jude’s Settlement with the DOJ – Analyst Blog

Filed in earnings, Gold Investing, Guidance, lead, silver by on June 7, 2010 0 Comments

Recently, St. Jude Medical ( STJ ) entered into an agreement with the US Department of Justice (DOJ) to pay $3.7 million for the settlement of a fraud case related to illegal payments made to hospitals for securing heart device business. The settlement followed an action filed under the False Claims Act by a whistleblower. The allegations made by the Department of Justice included payments made to hospitals as well as small and isolated product rebates over the last five years. St. Jude Medical generally provided rebates on heart device equipment to encourage buyers to purchase the equipments from them rather than from competitors. These payments led to false claims being submitted to federal health care programs and thus violated the False Claims Act. The company asserts that this settlement will have no material impact on its financial position or operations. St. Jude Medical posted strong financial results for the first quarter of fiscal 2010. For the first quarter, earnings per share came in at 75 cents, beating the Zacks Consensus Estimate of 68 cents and the year-ago earnings of 58 cents. The company expects earnings per share to be in the range of $2.80 to $2.85 for fiscal 2010, compared with the previous guidance range of $2.71 to $2.76. For the second quarter, earnings per share are expected between 73 cents and 75 cents. The Zacks estimates of 74 cents for the second quarter and $2.84 for fiscal 2010 lie midway in the company’s guidance range. St. Jude Medical is a leading worldwide manufacturer, and distributor of innovative medical devices. The company offers high-quality products to physicians in cardiac rhythm management (CRM), heart valves, electrophysiology and specialty catheters/introducers. The company is a leader in the mechanical heart valve market. St. Jude’s closest competitors are Medtronic Inc. ( MDT ) and Boston Scientific Corporation ( BSX ). We currently have a Neutral rating on St. Jude Medical. Read the full analyst report on “STJ” Read the full analyst report on “MDT” Read the full analyst report on “BSX” Zacks Investment Research

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Baldor Increases Sales Guidance – Analyst Blog

Filed in economy, Gold Prices, Guidance by on June 4, 2010 0 Comments

Manufacturer of energy efficient motors Baldor Electric Co. ( BEZ ) updated its sales guidance for the second quarter of 2010. The company increased its sales guidance to a range of $435.0 million to $445.0 million from its previous guided range of $415.0 million to $430.0 million, driven primarily by strong incoming orders for all its products. A higher expectation for sales has also enhanced Baldor’s confidence to achieve slightly better operating margin for the second quarter of 2010 than its quarterly peak operating margin of 14.2%. An improved future outlook represents healthy industrial spending and strengthening global economy, better capacity utilization, customers demand for energy efficient products, reduced costs and huge replacement demand due to the company’s large installed base. Baldor Electric’s prime source of revenue is sales to original equipment manufacturers (OEMs), to whom approximately 60.0% of industrial motor products and 20.0% of mechanical power transmission products are sold directly. The rest of the products are sold to distributors. During the first quarter of 2010, Baldor Electric experienced a steady improvement in orders for all of its products, especially small and medium-sized motors. Overall, orders exceeded shipments by $25.0 million in the quarter for a book-to-bill ratio of 1.06. At quarter end, the company had approximately $160.0 million in backlog. Operating through one segment in the industrial electrical equipment industry, Baldor Electric Co. specializes in designing and manufacturing industrial electrical motors, drives, generators, and other mechanical power transmission products. The company faces competition from AO Smith Corp. ( AOS ), Regal Beloit Corporation ( RBC ) and Bodine Electric Company. Read the full analyst report on “BEZ” Read the full analyst report on “RBC” Read the full analyst report on “AOS” Zacks Investment Research

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Noble Energy Sees Production Up – Analyst Blog

Filed in Gold Prices, shares, silver by on June 4, 2010 0 Comments

U.S. oil and natural gas company Noble Energy Inc. ( NBL ) Wednesday releases its future strategy including production, reserves and capital spending plans. The company expects a five-year annual compounded production growth rate of 10%, bringing the production of 350 thousand barrels of oil equivalent per day (MBOE/d) in 2015. Noble also anticipates a five-year annual compounded growth of 14% for proved reserves from the year end 2009. The company intends to spend an average of $2.6 billion per year for the next five years as capital expenditure and has agreed to sell certain non-core high cost mid-continent and Illinois basin assets for about $550 million. In addition to the deepwater Gulf of Mexico projects, the company is gaining momentum with an increasing U.S. onshore resource base, extending its footprint to over 2.5 million net acres. It expects major ongoing projects to deliver approximately $1 billion in free cash flow in 2015. The company’s next five years’ production growth target is supported by its key major projects in the Gulf of Mexico, West Africa and Israel. We believe that Noble’s potential exploration program, disciplined capital allocation and major asset restructuring have already been reflected into its present premium valuation. We are currently Neutral on Noble shares as we think that the upside potential has been neutralized by the tentative commodity price environment. Read the full analyst report on “NBL” Zacks Investment Research

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AutoNation Outpaces U.S. Sales – Analyst Blog

Filed in Gold Prices by on June 4, 2010 0 Comments

AutoNation Inc. ( AN ) has posted a 22% rise in sales to 19,283 vehicles during May. With this, the automotive retailer has outpaced the sales gain of 19% in the U.S. during the month. Sales in AutoNation’s Domestic segment — comprising stores that sell vehicles manufactured by General Motors ( MTLQQ ), Ford ( F ) and Chrysler — advanced 28% to 5,852 vehicles. Sales in the Import segment — including stores that sell vehicles manufactured primarily by Toyota ( TM ), Honda ( HMC ) and Nissan ( NSANY ) — went up 21% to 10,232 vehicles. Sales in the Premium Luxury segment — consisting of stores that sell vehicles manufactured primarily by Mercedes, BMW and Lexus — escalated 15% to 3,199 vehicles. Light vehicle sales in the U.S. stood at 11.63 million units at a seasonally adjusted annualized rate in May. All the major automakers reported double-digit rises in U.S. sales except Toyota. The sales gains were driven by a surge of new models in the market and an expansion of fleets by rental car companies and governments. AutoNation showed a 55% increase in profits to $58 million or 34 cents per share in the first quarter of 2010 from $40 million or 22 cents per share in the prior-year quarter. With this, the automotive retailer has exactly matched the Zacks Consensus Estimate. Revenues in the quarter appreciated 19% to $2.8 billion, driven by a marked improvement of 24% in new and used retail vehicle revenues. New retail vehicle revenue escalated 24% to $1.47 billion. This translated into revenue per vehicle of $32,253, an increase of 4% from the year-ago level. The retailer’s new vehicle sales rose 19% to 45,438 units. Used retail vehicle revenues went up 23% to $646 million. Used retail vehicle sales rose

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Millipore Acquisition on Track – Analyst Blog

Filed in Debt, Gold Investing, shares, silver by on June 4, 2010 0 Comments

Merck KGaA’s acquisition of Millipore Corporation ( MIL ) remains on track with Millipore recently announcing that its shareholders have voted in favor of the acquisition. The company said that about 79% of outstanding shares voted, of which approximately 98% were in favor of the acquisition. The acquisition agreement was announced in late Feb 2010. According to the agreement, Merck KGaA will acquire all outstanding shares of common stock of Millipore for $107 per share in cash, or a total transaction value, including net debt, of approximately €5.3 billion ($7.2 billion). Millipore and Merck KGaA will create a €2.1 billion ($2.9 billion) partnership in the life science sector, achieving significant scale in high-margin specialty products with an attractive growth profile. This acquisition will help the combined company strengthen its presence in high-growth areas and expand its geographical presence.   Following the acquisition, contribution from Merck KGaA’s chemicals business is expected to increase to 35% of total group pro forma revenues of €8.9 billion. The business currently accounts for 25% of total revenues. The combined business is expected to generate cost synergies of $100 million (€75 million) annually. Merck KGaA expects to realize these synergies within three years of closing of the deal. The acquisition is scheduled to close early in the third quarter of 2010. We currently have a Neutral recommendation on Millipore. Millipore’s business model ensures that its performance is not severely hampered by economic turbulence. The company’s business is well diversified across end-markets, product lines, and geographies — this helps maintain growth even in challenging economic scenarios. Read the full analyst report on “MIL” Zacks Investment Research

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ProLogis Leases Strong in Europe – Analyst Blog

Filed in euro, Gold Investing, Gold Prices, lead by on June 4, 2010 0 Comments

ProLogis ( PLD ), a leading global provider of distribution facilities, has recently signed new leasing agreements spanning about 661,000 square feet of its development portfolio with four customers in Europe. About 236,000 square feet of space were leased to DB Schenker, the third-party logistics company of the German national railway company Deutsche Bahn. The lessee will occupy the space at ProLogis Park Jonkoping Building One in Torsvik, Sweden.   The company also leased 230,000 square feet of space to Gap Inc. ( GPS ), one of the leading specialty retailers across the globe. The Gap would occupy the space at ProLogis Park Stafford Building Four in the U.K. In addition, ProLogis leased 117,000 square feet of space at ProLogis Park Lodi Building Seven, near Milan, Italy, to an unnamed logistics company. At the same time, the company leased 78,000 square feet of space to Wurth Logistik Center, a third-party logistics company, at ProLogis Park Neuenstadt in southwest Germany. With improving property values and growing institutional demand for quality properties, ProLogis has witnessed a growing customer interest in new build-to-suit development projects across the globe. In addition, leasing decisions that were earlier postponed due to volatility in the markets are gradually coming off the shelf. ProLogis owns and manages interests in

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IBM Wins Big Deal in India – Analyst Blog

Filed in Debt, Gold Investing, Gold Prices, lead by on June 4, 2010 0 Comments

Technology giant International Business Machines ( IBM ) announced a 10-year, multi-million dollar agreement with India-based ElectraCard Services (ECS), a leading provider of software solutions for electronic payment systems. Under the terms of agreement, IBM will provide technical support for ECS’s disaster recovery infrastructure, giving ECS the scope to focus on core business while lessening its capital expenditures. Armed with IBM’s solution support, ECS’s electra solution suite will enable its clients, including State Bank of India, Deutsche Bank ( DB ), Life Insurance Corporation of India, Corporation Bank, and many other leading private national and international banks to better manage their growing customer base. The growth trends in e-commerce or online payments indicate a shift in consumer preference towards more transparent and flexible payment solutions. We feel more companies like ECS will find it easier to delegate responsibilities to IBM for its domain expertise and technology competence with regard to scalability and security, paving the way for recurring revenue growth. Recently, IBM took another step towards expanding its software portfolio by entering into a joint venture with five other tech giants. The company joined with ARM Holdings Plc ( ARMH ), Samsung Electronics Co., Texas Instruments Inc. ( TXN ), Freescale Semiconductor Inc. and ST-Ericsson to form a non-profit company, Linaro. The newly formed company will facilitate the speedy development of Linux-based software compatible with ARM designs for mobile phones, tablet PCs and other hybrid products. This initiative is expected to be of significance to IBM, as the company will be able to take a larger share in the wireless market, thereby increasing competition to tech giants such as Intel Corp ( INTC ) and Microsoft Corp ( MSFT ), which are looking to move beyond their traditional personal computing market. In the first quarter, the company reported a 5.0% year-over-year increase in revenue due to strength across its business segments (except the Global Financing segment) and geographic regions. The company ended the quarter with a hefty cash balance of $12.5 billion, but also carries a long-term debt burden of $21.3 billion. We maintain our short-term Hold recommendation on IBM. Read the full analyst report on “IBM” Read the full analyst report on “DB” Read the full analyst report on “ARMH” Read the full analyst report on “TXN” Read the full analyst report on “INTC” Read the full analyst report on “MSFT” Zacks Investment Research

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Wendy’s/Arby’s Grows Internationally – Analyst Blog

Filed in earnings, Gold Investing, ubs by on June 4, 2010 0 Comments

Wendy’s/Arby’s Group Inc. ( WEN ) opened its first international dual-branded Wendy’s and Arby’s restaurant in Dubai, UAE last month. This was an important milestone achieved by the company to fulfill its international expansion goal. Wendy’s/Arby’s recently announced its growth plans in Turkey through its subsidiary Arby’s Restaurant Group, Inc. The subsidiary signed a development agreement with Tab Gida Sanayi ve Ticaret A.S. to open 100 restaurants over the next ten years in Turkey, out of which 50 will open in next five years. Tab Gida owns or sub-franchises more than 430 restaurants in Turkey; this is an important step for Wendy’s/Arby’s to fulfill its international growth objective. We think the limited presence of Wendy’s/Arby’s in the international markets provides it with ample opportunities to enhance its reach. The company believes that there is room for more than 8,000 restaurants outside of North America. The less saturated developing markets offer Wendy’s/Arby’s an enormous growth opportunity, in our opinion. The company competes with McDonald’s Corp. ( MCD ) and Yum! Brands, Inc. ( YUM ), and both the companies have a strong international presence. Wendy’s/Arby’s reported first quarter 2010 earnings of 2 cents per share, surpassing the Zacks Consensus Estimate by a penny. The company achieved a 14.7% year-over-year growth in adjusted EBITDA in the first quarter, primarily as a result of positive same-store sales at Wendy’s and a 430-basis point increase in Wendy’s company-operated restaurant margin. Wendy’s/Arby’s also reaffirmed its fiscal year 2010 outlook. Wendy’s/Arby’s was formed through the merger of Triarc, the franchisor of the Arby’s restaurant chain, and Wendy’s, the owner-operator-franchisor of the eponymous fast food chain. Wendy’s and Arby’s continue to operate independently, with Wendy’s headquartered in Dublin, Ohio and Arby’s in Atlanta, Georgia. Read the full analyst report on “WEN” Read the full analyst report on “MCD” Read the full analyst report on “YUM” Zacks Investment Research

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Visa Blocks UnionPay Transactions – Analyst Blog

Filed in Gold Investing, shares, silver by on June 4, 2010 0 Comments

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Eastman Chemical Guides Higher – Analyst Blog

Filed in alcoa, earnings, economy, Gold Investing, Guidance, shares by on June 3, 2010 0 Comments

Shares of Eastman Chemical Company ( EMN ) increased 4.03% or $2.35 to close at $60.65 per share after the company increased its earnings guidance for the second quarter and full-year 2010. Inspired by the recovering economy and stabilizing raw material and energy costs, Eastman Chemical upped its earnings forecasts to $5.25 to $5.50 per share (excluding one-time charges) for the year from its prior guidance of $5.00 to $5.25 per share. For the second quarter, Eastman is expecting a profit of more than $1.60 per share, higher than the previous guidance of $1.50 to $1.60 per share. The Zacks Consensus Estimate is pegged at $1.57 per share for the current quarter and $5.30 per share for the full year 2010. Eastman expects the demand to continue to improve and the raw material and energy costs to remain steady in the latter half of the year. Recently, Eastman and aluminum giant Alcoa ( AA ) have entered into a partnership with the U.S. Department of Energy to reduce energy consumption by 25% per unit of output over a 10-year period. Other partners in the agreement are CalPortland (a building materials and construction solutions provider), Lufkin Industries (producer of machinery such as oilfield pumping units and electrical equipment) and Raytheon ( RTN ) (a major American defense contractor and industrial corporation with core manufacturing concentrations in defense systems and defense and commercial). Zacks Recommendation Eastman Chemical’s diversified chemical portfolio, along with its integrated and varied downstream businesses, is driving earnings. Eastman benefits from business restructuring and cost-cutting measures. Recently, the company has sold unprofitable units and closed businesses that could not be sold. Eastman’s fibers business continues to outperform and its strong specialty margins look increasingly credible. However, Eastman is facing weak demand in its Performance Polymer segment, which has led to lower sales volume and continued under-utilization of capacity, resulting in higher unit costs. Production disruptions on power outages are also pressuring volumes. We maintain our Neutral recommendation on Eastman Chemical. Read the full analyst report on “EMN” Read the full analyst report on “AA” Read the full analyst report on “RTN” Zacks Investment Research

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AT&T Kills Unlimited Data Plans – Analyst Blog

Filed in Gold Investing, ubs by on June 3, 2010 0 Comments

In a major move, AT&T ( T ) has introduced new data plans for its smartphone and iPad users, thereby bringing its existing unlimited data plans to an end. The new price plans, which replace AT&T’s current $30 monthly unlimited wireless data plan, however, do not affect the carrier’s existing subscribers who can continue with the benefits of unlimited usage. Nevertheless, existing smartphone users have the option to switch to the new plans without extending their service contracts. AT&T’s announcement comes ahead of the introduction (likely June 7) of the next-generation iPhone by Apple ( AAPL ). Ma Bell’s new strategy indicates a paradigm shift in wireless tariff structure as the industry is again becoming more and more inclined towards a tiered (or metered) pricing system, replacing the existing flat-monthly unlimited plans. Carriers abandoned tiered plans years ago when they launched unlimited plans to encourage customers to spend more on data services. Under the new structure (effective June 7, 2010), AT&T’s customers have the option to choose from two data plans, namely, DataPlus and DataPro, according to their needs. The $15 per month DataPlus plans offer 200 megabytes (MB) of data and are tailor- made for subscribers, who use their handhelds for web surfing, email and social networking. If a customer exceeds the monthly usage quota, he/she will be allocated another 200 MB for an extra $15. DataPro has been designed for heavy data users and offers 2 gigabytes (GB) of data for a monthly charge of $25. Customers who exceed the usage limit will be provided 1 GB of data for another $10. Users of this plan can tether their smartphones to laptops to access the Internet for an additional $20 a month. Tethering for iPhone will be available on the forthcoming model. AT&T’s move comes as a consequence to the data overload on its networks, especailly due to heavy usage by iPhone and iPad users. The carrier remains challenged by serious mobile data traffic congestion as a result of high-bandwidth demand on its network due to excessive data usage. AT&T has stated that roughly 3% of its smartphone customers (essentially the iPhone and iPad users) account for 40% of overall smartphone data usage. AT&T is making significant investment on network infrastructure improvements across highly congested areas to offload traffic from its overcrowded network. The carrier expects the new price plans to curb heavy data usage. The sunny side of AT&T’s new policy is that customers who use less volume of data have to pay much less than those using their smartphones to access high-bandwidth applications (such as HD video streaming, Internet music or downloading huge data files). AT&T claims that 65% of its smatphone customers use less than 200 MB of data and will thus benefit from the DataPlus plan. On the other hand, customers using more data may experience a bill shock, especially if they exceed the allocated monthly data limit, given the overage charges. So “tiered-pricing” has reappeared to affect heavy data users. It will be now interesting to see whether AT&T’s Tier-1 rivals follow suit with similar strategies. Archrival Verizon ( VZ ) recently revealed its plans to shift to a tiered pricing policy for its 4G data plans, which are based on data usage. However, Sprint Nextel ( S ) seems to be stuck with the unlimited approach while Deutsche Telekom’s ( DT ) US unit T-Mobile USA appears indifferent. Nevertheless, AT&T&#…

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Suntech Power Falls Short – Analyst Blog

Filed in euro, Gold Prices, lead, ubs, US Dollar by on June 3, 2010 0 Comments

Suntech Power Holdings Company Ltd. ( STP ) posted lower first quarter results of 11 cents, compared to the Zacks Consensus Estimate per American Depositary Share (EPADS) of 15 cents. Operational Results Suntech registered total net revenues of $588.0 million, an increase of 0.8% from $583.6 million in the fourth quarter of 2009 and an increase of 86.3% from $315.7 million in the first quarter of 2009. Total photovoltaic (PV) products shipment increased 11% over the fourth quarter of 2009 and 182% year-over-year. In the reported quarter, Suntech’s consolidated gross profit was $114.5 million and gross margin was 19.5%, compared to consolidated gross profit of $138.7 million and gross margin of 23.8% in the fourth quarter of 2009. The sequential gross margin decline was primarily due to a lower average sales price as a result of the substantial depreciation of the Euro versus the U.S. Dollar. Operating expenses decreased to $51 million compared to $51.7 million in the fourth quarter of 2009. Income from operations was $63.5 million compared to $87.0 million in the fourth quarter of 2009. Suntech digested foreign currency exchange losses of $24.5 million in the reported quarter compared to $13.2 million in the fourth quarter of 2009. The foreign currency losses in the reported quarter were primarily related to the substantial depreciation of the Euro versus the US Dollar. Net income was $20.7 million compared to net income of $44.0 million in the fourth quarter of 2009. Financial Condition Suntech reported Cash and cash equivalents of over $677.2 million at first quarter-end 2010 compared to $833.2 million at fiscal-end 2009. The decrease was primarily due to an additional investment made into Global Solar Fund (GSF), its repurchase of its 0.25% Convertible Senior Notes due 2012, and sequential increases in restricted cash, accounts receivable and inventory. GSF is an investment fund created by the company to make investments in private companies that own or develop projects in the solar energy sector. Suntech’s capital expenditure — totaling $72.4 million during the reported quarter — primarily relates to the addition of new production equipment. The company at the end of the reported quarter had outstanding long-term bank borrowings of $132.4 million and convertible notes worth $524.2 million. Outlook Wuxi, China-based Suntech is a leading global solar energy company. The company designs, develops, manufactures and markets photovoltaic (PV) cells and modules. Looking forward, Suntech expects shipments to experience single-digit percentage growth in the second quarter of fiscal 2010 compared to the first quarter of fiscal 2010. Consolidated gross margin in the second quarter of fiscal 2010 is expected to be in high teens or in the range of 17% – 19%. The Zacks Consensus EPADS estimate currently stands at 21 cents for the second quarter of 2010. Due to strong demand, Suntech has…

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