CHICAGO, July 20, 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: Clorox Corporation (NYSE:
CLX), Colgate-Palmolive Co. (NYSE: CL), Procter &
Gamble Co. (NYSE: PG), Yahoo! (Nasdaq: YHOO) and
Microsoft (Nasdaq: MSFT).
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Here are highlights from Tuesday's Analyst Blog:
Clorox Rejects Icahn Offer
Clorox Corporation (NYSE: CLX) rejected the recent offer
of a conditional acquisition from activist investor Icahn
Enterprises L.P. Icahn offered $76.50
per share for Clorox, the offer being subject to due diligence,
financing and other conditions. After evaluating and discussing the
proposal, Clorox's financial and legal advisers came to the
conclusion that the offer undervalues the company.
The advisers pointed out that the company to its credit
continues to create shareholder value in the form of dividends and
share repurchases. From fiscal 2006 to date, the company has
distributed $2.6 billion in cash to
stockholders in the form of dividend payouts and share repurchases.
The company has consistently increased its dividends, doubling it
from $1.20 to $2.40 per diluted share over the past five
years
Clorox is one of the world's leading manufacturers of consumer
products. Its strong portfolio of brands, including Clorox, Glad,
Brita, Armor All, Burt's Bees, STP and Kingsford, offers a
competitive edge to the company and bolsters its well-established
position in the market.
Moreover, Clorox has established definite financial goals to
measure its progress. These goals include 3% to 5% annual sales
growth before acquisitions, and 75 to 100 basis points of annual
improvement in the operating margin. It speaks for the company that
it has competed effectively with peers of the likes of
Colgate-Palmolive Co. (NYSE: CL) and Procter & Gamble
Co. (NYSE: PG).
We maintain a long-term Neutral recommendation on Clorox
Corporation. Moreover, the company has a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
Yahoo! Reports In-Line, Misses on Revenue
Yahoo! (Nasdaq: YHOO) reported second quarter EPS of
18 cents, in-line with the Zacks
Consensus Estimate. This snaps the company's streak of five
consecutive positive earnings surprises.
It was an 18% increase over the same quarter in 2010,
however.
Revenue Falls Short
Revenue excluding traffic acquisition costs (revenue ex-TAC)
came in at $1.076 billion, a 5%
decline from the same quarter in 2010. Revenue fell short of the
Zacks Consensus Estimate of $1.104
billion.
The decline was due in large part to the revenue share related
to the search agreement with Microsoft (Nasdaq: MSFT). Under
the terms of the deal, Microsoft receives $12 of every $100
in ad revenue generated from clicks alongside ads next to search
results.
Excluding this item and other special items, revenue ex-TAC for
the first quarter of 2011 rose 1% year-over-year.
Overall, search revenue ex-tac fell 15% from the same quarter in
2010 but jumped 31% from Q1. Display revenue, which accounted for
43% of total revenue, climbed 5% year-over-year but fell 1% from
the previous quarter.
Meanwhile, operating income increased 9% over the second quarter
of 2010 due to lower operating expenses.
Buying Back Shares
Yahoo! repurchased 30 million shares in the quarter for
$472 million. Most of these
repurchases came from its existing cash balance as free cash flow
for the quarter came in at just $96
million, 25% below the same period in 2010.
The company ended the quarter with $3.255
billion in cash, cash equivalents, and marketable
securities.
Outlook
Management expects third quarter revenue ex-TAC between
$1.050 billion and $1.100 billion.
Total expenses less TAC are expected to be in the range of
$915 million to $935 million.
The company projects operating income between $135 million and $165 million.
It did not give specific EPS guidance, but the Zacks Consensus
Estimate for the third quarter is currently 19 cents.
Shares were down more than 2% after hours. Yahoo! is a Zacks #3
Rank (Hold) stock.
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