CHICAGO, July 25, 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: General Electric Company
(NYSE: GE), Comcast Corp. (Nasdaq: CMCSA), Dover
Corp. (NYSE: DOV), Honeywell International Inc. (NYSE:
HON) and Reynolds American Inc. (NYSE: RAI).
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Here are highlights from Friday's Analyst Blog:
General Electric Beats Estimates
General Electric Company (NYSE: GE) released its second
quarter 2011 earnings results before the opening bell today,
reporting earnings per share from continuing operation of
34 cents. This was above the Zacks
Consensus Estimate of 32 cents and up
17% year over year.
This was the fifth consecutive quarter in which the company
witnessed double-digit growth in earnings. Profits were primarily
driven by strong demand internationally for heavy equipment
including jet engines and electric turbines.
Revenue
Total revenue for the quarter declined 4% year-over-year to
$35.6 billion, primarily due to the
sale of a majority stake in its NBC Universal business to
Comcast Corp. (Nasdaq: CMCSA). However, excluding this
impact revenue grew 7% year over year. Revenues were above the
Zacks Consensus Estimate of $34.6
million.
Total orders in the quarter increased by 24% year over year,
with the total backlog reaching a record level of $189 billion. Orders for equipments increased a
robust 33% and services orders were up 16%.
Balance Sheet
At the end of the quarter, GE had cash worth $91 billion. Year-to-date, the company has
executed $1 billion of stock buybacks
and $2.7 billion of stock
buybacks.
Year to date, cash generated from Industrial operating
activities totaled $4.4 billion.
General Electric currently holds a Zacks #3 Rank, which implies
short term Hold recommendation.
Dover Outperforms, Guides Higher
Dover Corp. (NYSE: DOV) reported its second quarter
earnings posting an EPS of $1.31, up
from 91 cents in the year-earlier
quarter. Excluding the charge of 12
cents pertaining to tax benefits, adjusted EPS increased
31.0% year over year to $1.19,
outperforming the Zacks Consensus Estimate of $1.13.
Total revenue as Dover reported was $2.16
billion versus $1.79 billion
in the year-earlier quarter, striding ahead of the Zacks Consensus
Estimate of $2.08 billion. Increase
in revenue was mainly due to strong energy markets and recovery in
some of the infrastructure markets.
Costs and Margins
Dover reported cost of sales of $1.34
billion versus $1.10 billion
in the year-ago quarter. Gross profit of the company increased to
$815.9 million versus $688.7 million in the prior-year quarter. This
led to a gross margin contraction of 70 basis points year over year
to 37.8%.
Selling and administrative expenses also increased to
$474.1 million in the reported
quarter versus $423.8 million in the
year-ago quarter. Operating profit soared to $341.7 million in the quarter versus $264.9 million in the prior-year quarter, thereby
expanding operating margins 100 basis points year over year to
15.8%.
Outlook
Prior to the acquisition of Knowles Sound Solutions, the company
now expects full year revenue growth in the range of 18% - 20%,
representing an organic revenue growth of 12% - 14% and 6% growth
from acquisitions. This is based on the assumption of higher
volume, tax benefit and a slightly lower effective tax rate. The
company also guides EPS in the range of $4.50 - $4.60.
Our Take
Dover continues to pursue strategic acquisitions in a bid to
improve its product offerings and complement its organic growth
strategy. The acquisition of Sound Solutions, the world's leading
manufacturer of dynamic speakers and receivers for cell phones and
other consumer electronics, will place Dover as the leading
provider of acoustic products serving the fast growing cellular
handset market.
Dover foresees strong growth in the global cell phone market as
cell phones become increasingly indispensable for consumers. Dover
also acquired pump manufacturer Harbison-Fischer Inc.
Dover expects the acquisition to facilitate the company's reach
in the attractive international oil and gas markets. We currently
have a Zacks #3 Rank (short-term Hold recommendation) on the
stock.
Honeywell Beats, Raises Guidance
Honeywell International Inc.'s (NYSE: HON) reported
second-quarter 2011 earnings per share from continuing operations
of $1.02, above the Zacks Consensus
Estimate of 98 cents and prior-year
earnings of 73 cents.
Total Revenue
Total revenue was $9.1 billion,
below the Zacks Consensus Estimate of $9.2
billion for the quarter. Organically, total revenue was up
8% year over year, led by growth driven by new products,
emerging-region growth and strong end-markets. Honeywell witnesses
continued momentum across its portfolio.
The company reported a revenue increase in all its segments.
Outlook
The company's quarterly results for the quarter were quite
impressive, supported by an improvement in global market
environment. Driven by strong first half of 2011 performance and
improving market condition, Honeywell increased its 2011 sales
outlook from $36.0 billion–$36.6
billion to $36.1 billion to
$36.7 billion.
Earnings per share outlook was raised from $3.80–$3.95 to $3.85 to $4.00.
Free cash flow guidance was maintained at $3.5 billion–$3.37 billion and cash flow from
operations in the range of $3.3
billion–$3.5 billion. Free cash flow expectation excludes US
pension contribution, which is included in cash flow from operation
outlook.
Honeywell currently holds a Zacks #1 Rank, which implies a
Strong Buy recommendation.
Reynolds American Misses
Reynolds American Inc. (NYSE: RAI) reported fourth
quarter 2011 results on July 22,
2011.
The company posted adjusted quarterly earnings of 67 cents per share, which was below the Zacks
Consensus Estimate of 70 cents but
inched up 1.5% compared to the prior-year quarter.
According to the management, profits were driven by excellent
results reported by Santa Fe Natural Tobacco Company, Inc.
(Reynolds American's subsidiary) in the second quarter on the back
of strong volume, share and earnings growth.
The North Carolina-based
manufacturer and distributor of cigarette and other tobacco
products narrowed fiscal 2011 earnings to the range of $2.60 to $2.70 per share. The current Zacks
Consensus Estimate of $2.67 is at the
higher end of the guidance range.
Revenues and Operating Margin
Reynolds' net sales in the
reported quarter were almost flat year over year, increasing
marginally by 1.0% to $2,267 million
from $2,245 million in the year-ago
quarter. Sales estimates surpassed Zacks consensus estimate of
$2,251 million in the
quarter.
Adjusted operating income came in at $683
million, a growth of 1.2% over $675
million recorded in the prior-year quarter.
Financial Update and Dividend Increase
Reynolds American ended the year with cash and cash equivalents
of $1.3 billion, long-term debt of
$3,218 million and shareholders
equity of $6.5 billion.
Reynolds American targets a dividend payout ratio of 80 percent.
The company increased total dividend payment by nearly 18 percent
over the past year.
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