For Immediate Release
Chicago, IL – February 8, 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: Kelly Services (KELYA), Manpower (MAN), Aetna Inc. (AET), Arrow Electronics Inc. (ARW) and Sony Corp. (SNE).
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Here are highlights from Friday’s Analyst Blog:
Employment Report – In-Depth
There were some very encouraging signs in the report. For starters, the average workweek rose to 33.3 hours from 33.2 hours in both December an November. While a 0.1 hour per week increase might not sound like much, remember that there are still 107.1 million people working in the private sector, and 129.5 million people working including all levels of government. That works out to an additional 1.295 million more hours worked each week.
If the average workweek had remained the same, then we would have had to add an additional 39,000 workers to have the same total number of hours worked. When coming out of a recession, the first thing an employer will do when business picks up is ask the people already on the payroll to work a bit longer. That is particularly true if businesses had previously cut back on the hours of the employees. They don’t have to pay any extra benefits, and more often than not, they don’t even have to pay overtime.
Only after they have increased the hours of existing employees as much as they reasonably can (or until they start having to pay significant amounts of overtime) do employers move to the next stage. Usually employers are tentative at first, not knowing if the upturn they are seeing is just a blip or the start of a real upturn in business.
So after they have been working their current employees more, the first thing they tend to do is call up the Temp agencies like Kelly Services (KELYA) or Manpower (MAN). Only when they are confident that the upturn is for real will they bring on permanent employees. Thus, along with the average workweek, the number of temporary employees is an excellent leading indicator of employment. Temp jobs increased by 52,000 in January and are up a total of 206,000 over the last three months.
Aetna Misses, Outlook Disappoints
Aetna Inc. (AET) reported fourth quarter operating earnings per share (EPS) of 40 cents, missing the Zacks Consensus Estimate of 42 cents and was 58% lower than the 96 cents reported in the year-ago quarter. The primary reason for the decline was lower commercial underwriting margin, lower operating earnings in the Group Insurance business and an increase in pension expenses, partially offset by the lower number of outstanding shares. For the full year of 2009, operating EPS came in at $2.75, a 30% decline from last year.
Revenues (excluding capital gain/losses) during the quarter increased 9% to $8.7 billion, driven by a 9% increase in premium revenues and a 2% increase in fees and other revenue. For the full year, Aetna recorded a 10% increase in revenues to $34.7 billion.
Total medical membership rose 6.9% to 18.9 million at the end of the reported quarter compared to the year-ago period, but declined 113,000 sequentially. In case of pharmacy and dental categories, membership declined both sequentially as well as from the year-ago period. Sequentially, membership has come down by 122,000 to 14.061 million for the pharmacy segment and 142,000 to 11.013 million for the dental segment.
Arrow Electronics Beats
Arrow Electronics Inc. (ARW) reported sales of $4.20 billion in the fourth quarter of 2009, up 3% from a year ago and up 15% sequentially.
Global components sales of $2.59 billion increased 6% year over year driven by better-than-expected performance in all the core geographies. On a sequential basis, sales were up 2%. North America and Europe continued to show improving sales trends, with both regions delivering sales growth well ahead of normal seasonality. Asia-Pacific continued to grow, with sales increasing more than 25% year over year.
Global enterprise computing solutions reported sales of $1.61 billion, down 2% year over year but up 42% sequentially.
Gross margin came in at 11.8%, down 90 basis points year over year due to an increase in the mix of business from Asia-Pacific as a percentage of total sales, ongoing pressure in the more profitable European components business compared to a year ago, and changes in product mix. On a sequential basis, gross margin increased 30 basis points, driven by increases in the North American and European component businesses.
Sony’s Q3 Profit Jumps
Sony Corp. (SNE) recently reported fiscal third quarter results. The company recorded earnings of ¥79.2 billion ($861 million), which was sharply higher compared to ¥10.4 billion in the year-ago quarter. The growth was primarily driven by strong Financial Services revenue, robust sales of Vaio PCs and PlayStation 3 gaming consoles as well as stringent management efforts to control costs.
During the quarter, consolidated sales grew by 3.9% year-over-year to ¥2.15 trillion ($24.3 billion). The growth was mainly attributable to improved performance in Financial Services, Networked products and Pictures segments, partially offset by lower revenues in Consumer Products and Devices segment.
Revenue declined by 10.7% year-over-year to ¥1.09 trillion ($10.5 billion) primarily due to sluggish sales of LCD televisions, system LSIs and optical pickups. Operating income came in at ¥49.4 billion ($537 million), compared to an operating loss of ¥19.8 billion in the year-ago period primarily due to reduced selling, general and administrative expenses, improved product mix and favorable foreign currency translations.
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