For Immediate Release
Chicago, IL – December 29, 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 Xilinx Inc. ( XLNX),
Broadcom Corporation ( BRCM), Altera
Corporation ( ALTR), Texas
Instrument ( TXN) and H&R Block
Inc. ( HRB).
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Here are highlights from Wednesday’s Analyst
Blog:
Estimates Decline for Xilinx
Earnings estimates for Xilinx Inc. ( XLNX) have
declined significantly in the last seven days after the company
recently downgraded its guidance for the third quarter of fiscal
2012.
Xilinx recently revised its sales guidance for the December
quarter. The company now expects sales to decline by 9% – 12%,
significantly lower than the previous guidance of a sales decline
of 3% to 8% sequentially.
The new guidance implies sales to come between $488.6 million
and $505.2 million compared to its previous estimate of $538.5
million and $510.8 million.
The decline in sales was primarily driven by a decrease in large
customer business in Communications end market.
Xilinx now expects gross margin to be approximately 65%, up from
its previous estimate of 64%. This is a revision from
previous guidance of approximately 64%.
With the second quarter earnings conference call, Xilinx stated
that sales from Virtex-6 and Spartan-6 families will increase
sequentially. Sales from Communications were projected to be
down sequentially as decline in wireless sales would offset an
increase from Wired Communications.
Xilinx had reduced its guidance for the September quarter as
well. Most semiconductor companies have downgraded their guidance
for the December quarter in view of the macroeconomic slowdown with
the exception of Broadcom Corporation ( BRCM).
Earlier in the month, prime rival Altera
Corporation ( ALTR) slashed its revenue guidance for the
fourth quarter of 2011.
Altera now expects revenues in the fourth quarter to decline by
13% to 16% on a sequential basis, compared to its previous guidance
of 7% – 11%. The new guidance implies revenues in the range of
$438.9 million – $454.6 million, significantly lower than the
previous guidance of $465.0 million – $485.9 million.
In particular, the severe weakening of demand in Europe has
majorly affected business for most semiconductor players.
Industry leader Texas Instrument (
TXN) also slashed its revenue guidance for the December quarter as
demand was adversely impacted with most customers bringing down
their high-level of inventories. Texas stated that the reductions
are due to broadly lower demand across a wide range of product
markets, customers, end products, the only exception being wireless
applications processors. In particular, recessionary environment in
Europe continues to impact the business followed by Asia and the
US.
Earnings estimates have already declined of late for Xilinx.
With the downgrade in guidance, we expect a more severe decline
hereafter.
We continue to maintain a Neutral recommendation on Xilinx. Our
recommendation is supported by Zacks #3 Rank which translates into
a short-term rating of Hold.
H&R Block Downgraded
We are downgrading H&R Block Inc. ( HRB) to
Neutral from Outperform because of the higher-than-estimated
net loss incurred in its fiscal second quarter results. The company
also had to drop plans to acquire 2SS Holdings after the federal
judge passed a ruling against the deal on antitrust
grounds.
H&R Block reported adjusted loss of $0.38 per share, wider
than the Zacks Consensus Estimate of a loss of $0.35 as well as
$0.36 a share incurred in the year-ago period. Litigation costs
coupled with charges related to the discontinuation of ExpressTax
also weighed on the results in the quarter.
After a long wait, H&R Block dropped its plan to acquire 2SS
Holdings, Inc, developer of Tax ACT digital tax preparation
solutions, in a $287.5 million all-cash deal. The decision came
after a federal judge passed a ruling against the merger
on antitrust grounds. The acquisition was intended to augment the
company’s digital tax offerings as well as aid performance. The
company had plans of consolidating its H&R Block At Home
digital business and the acquired TaxACT unit. Had the acquisition
materialized, H&R Block would have enjoyed an enlarged
client based.
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ALTERA CORP (ALTR): Free Stock Analysis Report
BROADCOM CORP-A (BRCM): Free Stock Analysis Report
BLOCK H & R (HRB): Free Stock Analysis Report
TEXAS INSTRS (TXN): Free Stock Analysis Report
XILINX INC (XLNX): Free Stock Analysis Report
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