For Immediate Release
Chicago, IL – February 24, 2010 – 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: Nordstrom Inc. (JWN), Daimler AG (DAI), Medtronic, Inc. (MDT), St. Jude Medical (STJ) and Boston Scientific Corporation (BSX).
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Here are highlights from Tuesday’s Analyst Blog:
Nordstrom Earnings Improve
Nordstrom Inc. (JWN), a leading fashion specialty retailer, reported fiscal 2009 fourth quarter earnings of $172 million or 77 cents per share compared to $68 million or 31 cents in the year-ago quarter. The quarterly earnings marginally missed the Zacks Consensus Estimate by a penny.
For fiscal 2009, Nordstrom reported earnings of $441 million or $2.01 per share versus $401 million or $1.83 per share in the previous fiscal year. The fiscal earnings beat the Zacks Consensus Estimate by 5 cents.
During the quarter, net sales increased 10.3% year-over-year to $2.54 billion, while total revenue rose 10.5% to $2.64 billion. The increase in sales was primarily due to an improved merchandise offering. Same-store sales during the quarter increased 6.9% compared to the year-earlier quarter, as most of the company’s merchandise categories generated positive same-store sales.
Same-store sales of Nordstrom Rack increased 4.6% in the fourth quarter compared with the same period in fiscal 2008. Gross profit of the company (as a percentage of net sales) increased approximately 530 basis points during the quarter due to improvement in merchandise margin. Furthermore, Nordstrom improved its inventory position during the quarter and ended the year with an inventory turn of 5.4, the highest in its recent history.
Selling, general and administrative expenses increased $56 million during the quarter due to higher expenses related to new store openings, and higher variable expenses. However, growth in revenues and higher gross margin more than offset the increase in operating expenses. Consequently, Nordstrom recorded a strong 98.7% growth in operating income to $310 million from $156 million in the year-ago period.
Daimler Loses Nearly $4 Billion
Daimler AG (DAI) lost €2.6 billion ($3.7 billion) or €2.63 ($3.67) per share in 2009, in sharp contrast to a profit of €1.4 billion ($2 billion) or €1.41 ($1.97) per share in the previous year. The loss was attributable to a 24% decline in unit sales to 1.6 million vehicles due to the global economic crisis.
Revenue dipped 20% to €78.9 billion ($110 billion); adjusted for exchange-rate effects, the decrease was 21%. EBIT (earnings before interest and taxes) in the year was minus €1.5 billion ($2.1 billion) compared to plus €2.7 billion ($3.8 billion) in 2008. Daimler expects to post an EBIT of more than €2.3 billion ($3.2 billion) for 2010.
Medtronic Beats Zacks Estimate
Medtronic, Inc. (MDT) recently reported third quarter fiscal 2010 earnings per share of 77 cents, beating the Zacks Consensus Estimate of 76 cents and the year-ago earnings of 71 cents.
Sales
Total revenues in the third quarter increased 10% year over year to $3.851 billion. Medtronic witnessed sales growth across all its seven business segments. Cardiac Rhythm Disease Management (CRDM) revenues increased 6% year over year to $1.243 billion, driven by strong demand for implantable cardioverter defibrillators (ICDs). Spinal revenues increased 1% year over year to $842 million. Growth was fueled by higher demand for Biologics products.
CardioVascular revenues increased 28% year over year to $722 million. An increase in revenues can be attributed to strong sales growth across the company’s Coronary, Structural Heart Disease and Endovascular segments.
Neuromodulation revenues increased 11% year over year to $394 million, primarily due to higher sales of Activa PC, RC Deep Brain Stimulation systems and InterStim Therapy products.
Diabetes, Surgical Technologies and Physio-Control revenues increased 12%, 15% and 11% year over year to $311 million, $239 million and $100 million, respectively.
On a geographic basis, U.S. sales contributed roughly 58% to total revenues and increased approximately 3.0% year over year. International sales increased 22% year over year.
Margins
Gross margin in the third quarter increased 60 basis points (bps) year over year to 76.3%. Research and development expenses (excluding IPR&D charges) as a percentage of sales declined 70 bps year over year to 8.9%. Selling, general and administrative expenses as a percentage of sales declined 150 bps year over year to 34.5%.
Balance Sheet & Cash Flow
Medtronic ended the third quarter with cash, cash equivalents and short-term investments of $2.292 billion, an increase of approximately 37% in the first nine months of fiscal 2010. The company had an outstanding long-term debt of $6.396 billion at the end of the reported quarter. Cash flow from operations and free cash flow were $1.488 billion and $1.365 billion, respectively, for the third quarter.
Outlook
Medtronic raised its earnings per share guidance for fiscal 2010 at the lower end of the range. For the year, earnings per share are expected in the range of $3.20 to $3.22, compared to the prior guidance of $3.17 to $3.22.
Medtronic is one of the world’s leading medical technology companies, specializing in implantable and interventional therapy devices and products. The company’s main competitors include St. Jude Medical (STJ) and Boston Scientific Corporation (BSX).
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