For Immediate Release
Chicago, IL – December 23, 2011 – 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 Electronic Arts Inc.
( EA), Activision Blizzard Inc. ( ATVI),
Jacobs Engineering Group Inc. ( JEC),
Fluor Corporation ( FLR) and Foster
Wheeler AG ( FWLT).
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Here are highlights from Thursday’s Analyst
Blog:
EA-Activision Rivalry Goes to
Court
Electronic Arts Inc. ( EA) and
Activision Blizzard Inc. ( ATVI) have been
battling it out on the games front, but now they face each other in
the court room. California Superior Court Judge Elihu Berle ruled
out EA’s claim to dismiss Activision’s $400-million
contract-interference claims. The judge in Los Angeles admitted
that Activision had provided sufficient evidence against EA in the
aforesaid suit. Thus, the judge ordered the case to move to
trial.
When it all started…
It was in March 2011 that Activision had filed the $400 million
suit against EA and alleged that the latter had talked to two of
the formers’ employees who were still under contract. The employees
happened to be Jason West and Vince Zampella, the founders of
Infinity Ward, famous for the Call of Duty series.
Activision alleged that the two developers had hired agents and
secretly met and negotiated with EA executives while still working
at Activision in 2009.
Activision complained that EA, aided by Creative Artists Agency,
allegedly flew West and Zampella by a private jet from Southern
California to San Francisco to attend a barbecue at Electronic Arts
CEO John Riccietello's house, in August 2009.
Activision also said that EA had planned to finance and co-own a
new studio that was run by West, Zampella and other employees of
the Infinity Ward studio, which Activision had bought from West and
Zampella in 2003.
West and Zampella had previously filed a $36 million lawsuit
against Activision alleging that they were terminated to avoid
making royalty payments on “Call of Duty: Modern Warfare 2,” the
top-selling game in 2010.
Our Take
Basically, EA had the intention of snatching Activision’s
intellect behind the Call of Duty series, as it has been
rapidly gaining market share against its own Medal of
Honor series. In the present scenario, Activision does not
seem to be under any pressure as Call of Duty has been its most
successful franchise to date. The latest release of Call of
Duty: Modern Warfare 3 has been working wonders for the
company’s top line. In this particular case, Activision is in a
comfortable position as its stands to gain $400 million if it wins
the trial.
EA’s Battlefield 3 also has been going good since
release and the company has high expectations from Star Wars:
The Old Republic. However, EA could be in a bit of a bind if
it has to pay off Activision, as it would definitely dent its cash
balance.
EA and Activision are two of the biggest developers in the
gaming industry. Both companies wield franchises that are worth
millions and their rivalry is also well known in the video-game
industry.
EA with its strong product pipeline for fiscal 2012 and beyond
will drive top-line growth going forward. We believe that high
quality titles, an impressive product line, increasing online
exposure, social games and portfolio diversification guarantee
market share gains over the long term.
We believe that Activsion Blizzard’s strong product pipe line
and expansion into the online digital segment will drive the
top-line. However, the company’s limited presence in the social
gaming circuit may act as a headwind going forward.
In the long run, we maintain our ‘Neutral’ rating for both
Activision and EA. We currently have a Zacks #2 Rank for Activision
Blizzard Inc., which implies a ‘Buy’ rating in the short term. For
EA, we have a Zacks #3 Rank implying a ‘Hold’ rating in the short
term.
Contracts Galore for Jacobs
Engineering
Jacobs Engineering Group Inc. ( JEC) recently
announced winning of a series of contracts.
The company’s Chemetics unit in Pickering, Ontario, Canada was
awarded a design and fabrication contract by Aurubis Bulgaria AD.
The contract involves installation of two proprietary designed
sulfuric acid coolers in the acid plant in Pirdop, Bulgaria.
The range of operations entails the design and fabrication of
drying and interpass anodically protected sulfuric acid
coolers.
The contract has been awarded to Jacobs by Aurubis, a leading
integrated copper group and the world's largest copper recycler.
Jacobs' Chemetics unit had a long and successful work relationship
with the Pirdop facility since 1998 for projects starting from acid
coolers to Electrolyte Heaters.
Jacobs’ recent contract from the U.S. Army Corps of Engineers
Baltimore District for architect-engineering services in support of
multi-disciplined construction projects along with alterations and
renovations deserves special mention. This contract will not only
deliver facilities in support of the Army missions, but will also
revive and perpetuate the long history of supporting the Baltimore
District. The contract is valued at the firm-fixed-price of $12
million.
In a separate announcement, Jacobs proclaimed winning of a
contract from Honeywell to provide engineering services for the
expansion of its Baton Rouge, La. manufacturing facility. Jacobs
will be executing the project work from its offices in Mt. Laurel,
N.J.
The Baton Rouge facility, one of the leading refrigerants
suppliers in the U.S., will now be supported by Jacobs to produce
Honeywell's new low-global-warming-potential (GWP) blowing agent
and propellant (technical name: HFO-1234ze) on a commercial scale.
Production of HFO-1234ze is scheduled to begin in late 2013.
The project involves Jacobs being part of a cutting edge
next-generation technology targeted to improve the energy
efficiency for a multitude of applications.
Jacobs’ worldwide ever-increasing presence is thus a splendid
indication of its strong growth trajectory in the infrastructure
market across the globe. This has also been winning investor
confidence over time and is expected to continue with such an
outlook in future. The company directly competes with its peers,
viz. Fluor Corporation ( FLR) and Foster
Wheeler AG ( FWLT).
We currently hold a Neutral recommendation on the stock. Jacobs
has a Zacks #2 Rank, implying a short-term (1-3 months) Buy
rating.
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ACTIVISION BLZD (ATVI): Free Stock Analysis Report
ELECTR ARTS INC (EA): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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