For Immediate Release
Chicago, IL – September 29, 2010 – Zacks.com Analyst Blog features:Praxair Inc. (PX), Air Products and Chemicals Inc. (APD), Airgas Inc. (ARG), The Boeing Company (BA) and Lockheed Martin Corporation (LMT).
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Here are highlights from Tuesday’s Analyst Blog:
PX China Signs Gas Supply Contact
Praxair (China) Investment Co. Ltd, the Chinese unit of Praxair Inc. (PX) and a leading industrial gas supplier signed a nitrogen supply contract with Hong Fu Jin Precision Industry (Shenzhen) Co. Ltd, the wholly-owned subsidiary of Hon Hai Precision Industry Company Ltd.
The contract strengthens Praxair’s foothold further as a leading industrial gas supplier in the Southern Chinese region.
Hon Hai, situated in Shenzhen, Guangdong province, China, is a Fortune Global 500 company. The company provides contract manufacturing services to industries like computer, communication and consumer electronics.
Praxair is a premier industrial gas supplier both in the Americas and internationally. The company’s intense focus on expanding its reach within its operating regions while continuing to add new customers has accelerated profit growth a trend which should continue in the future. Furthermore, Praxair currently stands well positioned to benefit from the favorable economic environment, given its broad end-market exposure to food and beverage, steel, glass and chemicals.
However, Praxair’s large international presence increases risks related to fluctuations in foreign currencies and geopolitical uncertainties. Besides, volatility in energy prices enhances risks of energy supply in adverse economic conditions.
The company expects diluted earnings per share to be in the range of $1.15 to $1.20 for the third quarter of 2010 and between $4.60 and $4.70 for full-year 2010. Total revenue for full-year 2010 is estimated to be about $10.0 billion.
Praxair faces stiff competition from Air Products and Chemicals Inc. (APD), Airgas Inc. (ARG); Linde AG; Chromalloy Gas Turbine Corporation and Bodycote. We are currently maintaining a Neutral recommendation on Praxair, which is supported by Zacks # 3(Hold) Rank.
Boeing’s Four 777s for Air China
The Boeing Company (BA) has inked a deal to supply four 777-300ERs (Extended Range) to Air China, the flagship carrier of the People’s Republic of China, for $1.1 billion.
The addition of the four Boeing airplanes to Air China’s kitty would help expand its international presence.
The 777-300ER model brings the attributes of efficiency and reliability of double engines in the long-range market. The airplane carries 365 passengers and can fly up to a maximum of 7,930 nautical miles (14,690 kilometer).
The company’s Commercial Airplanes segment suffered a year-over-year revenue decline of 11.8% in the second quarter of 2010. We, however, expect such order wins in the segment to help deliver solid results in the upcoming quarters. The segment ended the second quarter with a contractual backlog of $251.6 billion, up 0.4% from the 2009-end level.
Overall, the company reported encouraging second-quarter results based on strong performance across its core business in spite of flagging volumes.
The Zacks Consensus Earnings Estimate for third-quarter 2010 is 99 cents per share. For full years 2010 and 2011, the Zacks Consensus Estimates are respectively, $3.88 per share and $4.86 per share.
Earlier, in July, Boeing had entered into a deal with Air China to supply 20 Next-Generation 737-800 jetliners. The Boeing aircraft will cost approximately $1,398 million with deliveries scheduled in stages from 2013 through 2015.
The Boeing Company is among the best positioned in its sector given its balanced exposure to commercial aircraft and defense equipment. We expect freight and passenger traffic to improve as the economic recovery gains traction, leading to renewed demand in the commercial aerospace market. The company seems well poised to capitalize on the said recovery.
Counted among the negatives, a delay in the delivery of 787 Dreamliner might lead to negative investor sentiment, affecting the company’s valuation.
We maintain our “Neutral” recommendation on Boeing. 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 Chicago, The Boeing Company designs and produces commercial airplanes (787, 737, 747, 767, 777), defense systems and civil and defense space systems. It is also the largest contractor for NASA (National Aeronautics and Space Administration). It competes with major defense primes like Lockheed Martin Corporation (LMT).
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