CHICAGO, June 30, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: PerkinElmer, Inc. (NYSE: PKI) as the
Bull of the Day and Hudson City Bancorp (Nasdaq: HCBK) as
the Bear of the Day. In addition, Zacks Equity Research provides
analysis on KB Home (NYSE: KBH), Family Dollar Stores
Inc. (NYSE: FDO) and Shaw Communications Inc. (NYSE:
SJR).
Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678.
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Here is a synopsis of all five stocks:
Bull of the Day:
We upgrade our rating for PerkinElmer, Inc. (NYSE: PKI)
to Outperform based on solid results and benefits from
reorganization. First-quarter 2011 earnings per share of
$0.34 surpassed the Zacks Consensus
Estimate of $0.30. PerkinElmer is a
leader in several life science segments. It has added new related
areas as part of its reorganization and divested unrelated
businesses. As a consequence, it has emerged as a higher-growth,
higher-margin company.
Its operations, both sales and manufacturing, are diversified on
a geographic basis. The company has implemented cost containment
measures. Growing recurring revenue stream and operating margin
expansion are its pillars of strength.
Based on the company's recent performance, we upgrade our rating
on the stock to Outperform with a price target of $31, which is based on a P/E of approximately
18.6X our fiscal 2011 EPS estimate.
Bear of the Day:
We are downgrading our recommendation on Hudson City
Bancorp (Nasdaq: HCBK) to Underperform. It reported a loss on a
GAAP basis in the first quarter of 2011 for the completion of the
balance sheet restructuring during the quarter. Lower interest and
dividend income, and increased non-interest expense, were on the
downside.
Going forward, the low interest rate environment would likely
result in a compression of the net interest margin from its new
higher level resulting from the restructuring transaction, and in
combination with the reduction in the size of its balance sheet
from the restructuring transaction, would lead to a reduction of
net interest income.
While its strong business model and solid capital position would
aid results, the dividend cut somewhat dampens investors appetite
for the stock. Increase in FDIC insurance costs also remains an
overhang. .
Latest Posts on the Zacks Analyst Blog:
KB Home's Loss Widens
KB Home (NYSE: KBH) reported a net loss of $68.5 million or 89
cents per share in the second quarter of fiscal 2011,
compared with a net loss of $30.7
million or 40 cents per share
a year ago.
However, excluding inventory impairments and land option
contract abandonment charges of $20.6
million and a loss of $14.6
million on loan guaranty related to the company's investment
in South Edge, LLC, the adjusted net loss stood at $33.3 million or 43
cents per share, which is much wider than the Zacks
Consensus Estimate of a loss of 32
cents per share.
Total revenue fell 27% to $271.7
million, mainly driven by a 28% decline in housing revenues
to $270 million. The decrease in
housing revenues reflected a 29% decrease in the number of homes
delivered to 1,265 homes, partly offset by a 3% rise in average
selling price to $213,400. However,
quarterly revenues were higher than the Zacks Consensus Estimate of
$266 million.
Meanwhile, net orders fell 11% to 1,998 homes from 2,244 homes a
year ago. As a percentage of gross orders, the company's
cancellation rate was 25% in the quarter compared with 24% in the
prior-year period.
Family Dollar Misses, Earnings Up
Family Dollar Stores Inc. (NYSE: FDO) recently posted
third-quarter 2011 results. The quarterly earnings of 91 cents a share missed the Zacks Consensus
Estimate of 95 cents, but jumped
18.2% from 77 cents earned in the
prior-year quarter due to healthy sales witnessed in the Consumable
and Home Products categories.
However, the shares of Family Dollar dropped 3.3% or
$1.76 to $51.26 in pre-market trading.
The company had earlier guided earnings in the range of
92 cents to 97 cents for the quarter
under review. Management now expects fourth-quarter 2011 earnings
between 62 cents and 70 cents, and
fiscal 2011 earnings between $3.08 and
$3.16. The current Zacks Consensus Estimates for the fourth
quarter and fiscal 2011 are 65 cents
and $3.15 per share.
We observe that Family Dollar's strategic initiatives to improve
merchandising and store operations have helped grow the top and
bottom lines.
The operator of self-service retail discount store chains posted
a 7.8% increase in revenue to $2,153.4
million from the prior-year quarter, and reflected sales
growth across Consumables categories (up 10.6%) and Home Products
(up 8.2%) but sales declined at Seasonal and Electronics (down
0.4%) and Apparel and Accessories (down 1.1%). Total revenue also
fell short of the Zacks Consensus Estimate of $2,166 million.
Shaw Communications Beats
Shaw Communications Inc. (NYSE: SJR) declared its third
quarter 2011 financial results, which beat the Zacks Consensus
Estimate.
In the reported quarter, the company laid off 550 employees
including 150 managers. Although the business restructuring is
estimated to cost between $29 million and
$30.7 million, it will result in early cost savings of more
than $50 million.
Second Quarter Results in Detail
Net income in the reported quarter was $209.5 million or 46
cents per share compared with a net income of $163.5 million or 38
cents per share in the prior-year quarter. Earnings per
share (EPS) of 46 cents comfortably
beat the Zacks Consensus Estimate of 40
cents per share.
Quarterly total revenue of approximately $1,327.6 million was up 36.1% year over year and
was above the Zacks Consensus Estimate of $1,290 million. The year-over-year improvement
was primarily attributable to the acquisition of the Shaw Media
coupled with customer growth and rate increases in the Cable and
Satellite segments.
Quarterly operating income before amortization was $598.9 million, up 33% year over year. Quarterly
operating margin was 45.1% compared with 46.2% in the prior-year
quarter. In the third quarter of 2011, Shaw Communications
generated $379.4 million in cash from
operations compared with $339.5
million in the year-ago quarter. Free cash flow in the
reported quarter was approximately $250.1
million versus $155.9 million
in the year-ago quarter.
Get the full analysis of all these stocks by going to
http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two
stocks that are likely to outperform (Bull) or underperform (Bear)
the markets over the next 3-6 months.
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