CHICAGO, July 14, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: SLM Corp. (NYSE: SLM),
Nelnet Inc. (NYSE: NNI), Jacobs Engineering Group
Inc. (NYSE: JEC), Fluor Corporation (NYSE: FLR) and
Foster Wheeler AG (Nasdaq: FWLT).
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Here are highlights from Wednesday's Analyst Blog:
We have recently downgraded our recommendation on shares of
SLM Corp. (NYSE: SLM) (better known as Sallie Mae) to
Neutral.
We believe that the company's leading position in the student
lending market, expense curtailment initiatives and the acquisition
of federal student loan assets bode well. Dividend reinstatement
and share buyback efforts also inspire investors' confidence in the
stock.
However, the positives have already been factored in the current
price.
First Quarter Earnings
Sallie Mae reported first-quarter 2011 core earnings of
$260 million or 48 cents per share, beating the Zacks Consensus
Estimate of 41 cents. The result
compares favorably with prior-year quarter's core earnings of
$215 million or 40 cents per share.
The results were primarily driven by a decline in loan loss
provisions and improved net interest income. Concurrent with the
earnings release, Sallie Mae declared a quarterly dividend of
10 cents per share on its common
stock, the first time since early 2007. In addition, the company
announced a share repurchase authorization of up to $300 million of outstanding common stock.
Outlook
Management at Sallie Mae expects to generate core earnings of
$1.70 per share in 2011, a full-year
private credit provision of $1
billion, operating expenses of $1.2
billion, and private loan volume of $2.5 billion. Reducing operating expenses is the
company's primary concern and by the end of fourth quarter 2011,
management expects to achieve a run rate of $250 million.
Going Forward...
Pausing new federal student loan origination to comply with the
legislation would affect revenue generation at student lenders like
Sallie Mae and Nelnet Inc. (NYSE: NNI). But we think that
Sallie Mae's diversifying efforts coupled with an economic
recovery, though at a sluggish pace, would bolster its earnings by
expanding its private education loan business and reducing its loan
loss provision expenses.
Additionally, Sallie Mae shares currently have a Zacks #3 Rank,
which translates into a short-term 'Hold' recommendation.
Jacobs Wins Two Major Contracts
Jacobs Engineering Group Inc. (NYSE: JEC) has been
awarded two significant contracts, one from the North West Redwater
Partnership, and the other from EDF's NNB Generation Company Ltd.
The values of both the contracts have not yet been disclosed.
Jacobs will be providing detailed engineering, procurement and
construction services to North West Redwater Partnership for the
development of a new oil refinery in Alberta, Canada. Under this contract, Jacobs
will be supporting the critical phases of project development of
the North West Redwater Refinery through sustaining operations.
The refinery is expected to utilize carbon capture technology,
ceasing the natural gas usage, thereby sustaining and promoting oil
sands development under the Bitumen Royalty in Kind (BRIK) policy
partnership between North West
Redwater and the Province of Alberta .
Project development and coordination of overall project delivery
will be led by the integrated team of individuals from both
North West Redwater and
Jacobs.
On the other hand, Jacob's will be providing consultancy
professional services to NNB Generation Company Ltd (NNB GenCo) on
its new UK nuclear build program. NNB GenCo is the prospective
licensee for future nuclear plants, expected to be owned and
operated by EDF Energy within UK.
According to the two-year agreement, Jacobs will be providing
technical support to the Design Authority department. The
department, on behalf of NNB GenCo, owns and protects the integrity
of design and safety case of the UK EPR, a pressurized water
reactor. The department is responsible for meeting the regulatory
requirements, minimizing safety, environmental, regulatory and
commercial risk.
Jacobs Engineering Group Inc. is one of the world's largest
engineering and construction companies providing services to a
variety of industrial, commercial and government clients across a
global network. The company directly competes with its peers, such
as Fluor Corporation (NYSE: FLR), Foster Wheeler AG
(Nasdaq: FWLT).
We currently maintain a long-term Neutral recommendation on the
stock. Jacobs has a Zacks #3 Rank, which translates into a
short-term Hold rating (1-3 months).
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