CHICAGO, July 15, 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: Hanesbrands Inc. (NYSE: HBI), Limited
Brands Inc. (NYSE: LTD), Maidenform Brands Inc. (NYSE:
MFB), Progressive Corp. (NYSE: PGR) and Allstate
Corporation (NYSE: ALL).
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Here are highlights from Thursday's Analyst Blog:
Earnings Preview: Hanesbrands Inc.
Hanesbrands Inc. (NYSE: HBI) is scheduled to report its
second-quarter 2011 financial results on Monday, July 18, 2011.
Currently, Zacks Consensus Estimates call for 86 cents per share on sales of around
$1,218 million.
First Quarter 2011: a Synopsis
Hanesbrands, which faces stiff competition from Limited
Brands Inc. (NYSE: LTD) and Maidenform Brands Inc.
(NYSE: MFB) reported first quarter earnings of 49 cents per share, which was 32% higher than
37 cents in the previous year.
Earnings surpassed the Zacks Consensus Estimate of 33 cents by 48.5%. Profits were primarily
impacted by acquisitions, organic growth and operational
efficiency.
Total revenue for the quarter climbed 11.7% to $1,306.41 million from $927.84 million in the year-ago period. The
growth in net sales was driven by strong performance of the
acquired 'Gear For Sports' business, organic Outerwear segment
growth and International growth.
Management Guided
Following strong results in the quarter, the company raised its
full-year 2011 diluted EPS guidance to a range of $2.70 to $2.90, ten
cents higher than the previous guidance of $2.60 to $2.80.
Hanesbrands expects net sales to remain in the range of
$4.9 billion to $5 billion, with the
low end of the range having increased from $4.85 billion.
Second-Quarter 2011 Zacks Consensus
Analysts covered by Zacks expect Hanesbrands to post
second-quarter 2011 earnings of 86
cents a share. The current Zacks Consensus is 28.35% higher
than the year ago period and ranges within a low of 85 cents to a high of 88
cents.
The current estimate remained the same over last 60 days as no
analyst revised estimates.
Our Recommendation
Hanesbrands is a leading player in the innerwear, casual wear
and active wear markets in the U.S. Moreover, the company commands
a portfolio of well-recognized flagship brands, including Hanes,
Champion, Playtex and Bali, which
provides a competitive advantage to the company and reinforces its
well established position in the industry.
Hanesbrands is undertaking prudent steps to optimize inventory
levels in accordance with sales trends, thereby improving margins
and cash flow from operations
However, Hanesbrands' debt-ridden balance sheet and unfavorable
foreign translations may weigh upon both the top and bottom
lines.
Hanesbrands currently holds a short-term Zacks #4 Rank (Sell).
On a long-term basis, we maintain a 'Neutral' rating.
Progressive Misses by a Penny
Progressive Corp.'s (NYSE: PGR) earnings per share for
the second quarter of 2011 were 38
cents, lagging the Zacks Consensus Estimate by a penny.
Results, however, compared favorably with the year ago earnings
of 32 cents. Net income increased 16%
from the year-ago period to total $245
million.
The company recorded net premiums of $3.8
billion during the quarter under review, up 3% year over
year. Net premiums earned were $3.7
billion, up 4% from the year-ago period.
Net realized gains on securities were $26
million during the second quarter of 2011, reversing the
loss of $39.5 million in the year ago
quarter. The combined ratio − the percentage of premiums paid out
as claims and expenses − deteriorated 70 basis points over the
prior-year period to 93.4% in the quarter under review.
Progressive reports its results every month. During June,
policies in force remained healthy, with the Personal Auto segment
increasing 5% year over year and 0.6% sequentially. Special Lines
also showed an improvement of 5% year over year and 1.2% over the
preceding month.
In Personal Auto, Direct Auto reported a growth of 8% year over
year and 0.3% from the preceding month. Agency Auto was up 3% year
over year and 0.2% from the last month. However, Progressive's
Commercial Auto segment continued to drag results, reporting
declines of 2% year over year.
Total expenses for the reported month increased 7.2% to
$1.12 billion from $1.04 billion in June
2010. The major components contributing to the increase in
total expenses were a 8.4% year over year increase in loss and loss
adjustment expenses, a 2.3% increase in policy acquisition costs
and a 6.4% increase in underwriting expenses.
Progressive reported a book value per share of $9.88, up from $9.44 as of June 30,
2010 but down from $9.97 as of
May 31, 2011.
Return on equity on a trailing 12-month basis was 18.4%, down
from 18.7% in June 2010 and 18.5% in
May 2011. The debt-to-total-capital
ratio was 23.6% as of June 2011, down
from 25.7% as of June 2010 but up
from 23.3% in the last month.
We maintain our Neutral recommendation on Progressive. The
quantitative Zacks #3 Rank (short-term Hold rating) for the company
indicates no clear directional pressure on the shares over the near
term.
Headquartered in Mayfield Village,
Ohio, The Progressive Corporation is one of the largest auto
insurers in the country. It competes with Allstate
Corporation (NYSE: ALL).
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