For Immediate Release
Chicago, IL – February 3, 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: Whirlpool Corporation (WHR), Toyota Motor Corp. (TM), Archer Daniels Midland Company (ADM), Becton, Dickinson and Company (BDX) and Baxter International Inc. (BAX).
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Here are highlights from Tuesday’s Analyst Blog:
Whirlpool Tops Estimates
Whirlpool Corporation (WHR) posted a profit of $141 million or $1.64 per share for the fourth quarter of 2009, beating the Zacks Consensus Estimate of $1.30 per share and year-ago level of $44 million or 60 cents per share. The company cited cost reduction and productivity initiatives as well as increased sales volume to be the contributing factors behind the earnings surprise.
Operating profit in the quarter totaled $199 million compared to $10 million in the prior-year quarter. Net sales totaled $4.9 billion, an improvement of 13% from the previous year. Excluding the impact of foreign exchange translation, the sales increased 5%.
In 2009, earnings were $4.34 per share compared to $5.50 per share in 2008. This nearly touched the Zacks Consensus Estimate of $4.46 per share. Net sales were $17.1 billion, a decrease of 10% from the year-ago level. Excluding the impact of foreign currency translation, sales declined 6% from the prior year.
Toyota Has Gas-Pedal Fix
Customers of Toyota Motor Corp. (TM) were relieved when Jim Lentz, President of the company’s U.S. division, announced that the company will start repairing the recalled as well as on-road vehicles this week. Each vehicle would take about half an hour to be repaired. Millions of Toyota drivers lived in anxiety after the revelation on January 21, 2010, of a sticking accelerator gas pedal on specific Toyota models.
Lentz has provided a permanent solution to the problem, which involves installing a steel shim a couple of millimeters thick in the pedal assembly behind the top of the gas pedal that would eliminate the excess friction between two pieces of the accelerator mechanism. The solution was behind Toyota’s finding that the friction could cause the pedal to become stuck in the depressed position.
Toyota has stated that the car owners would be notified by mail, asking them to set up appointments with their dealers in order to repair their vehicles. The cars already on the road would get priority over those in the lot.
Toyota has not yet projected the cost of its recalls and lost sales. However, the effect of recall on Toyota’s business, which has enjoyed a loyal customer base and a reputation for quality, can easily be gauged. According to Edmunds.com, an automotive research website, the company’s sales in January are expected to fall 11% from the year-ago level and its market share is likely to fall to its lowest point since 2006 in the U.S.
However, Toyota’s shareholders seem to be pleased by Lentz’s announcement. The company’s stock, which took a hit last week, went up nearly 4% on Monday, although this gain has been more than cut in half by mid-day Tuesday.
Archer Daniels Beats Estimates
Archer Daniels Midland Company (ADM), one of the leading food processing companies in the world, reported fiscal 2010 second quarter earnings of $567 million or 88 cents per share, compared to $578 million or 90 cents per share in the year-earlier quarter. Earnings exceeded the Zacks Consensus Estimate by a hefty margin of 16 cents.
The year-over-year decrease in quarterly earnings was primarily due to a $177 million pre-tax decline in corporate results related to the change in LIFO inventory valuations, partially offset by increased segment operating profit. The company recorded a 5% decline in quarterly net sales to $15.9 billion from $16.7 billion in the year-ago period, primarily due to lower average selling prices resulting from year-over-year decreases in underlying commodity costs.
Total segment operating profit for Archer Daniels increased 19% to $970 million during the quarter compared to the year-ago period. Operating profit for Oilseeds Processing segment increased $33 million year-over-year due to higher volumes and improved margins.
Becton Beats, Bumps Up Guidance
We recently reiterated our Neutral rating on Becton, Dickinson and Company (BDX) with a target price of $78 based on a P/E of approximately 15.3x our fiscal 2010 EPS estimate of $5.10.
Becton recently reported first quarter fiscal 2010 results. Earnings per share of $1.30 easily beats the Zacks Consensus Estimate of $1.20 and the year-ago earnings of $1.26. The company also reported an expansion in its top-line with growth across all major business segments.
BD Medical revenues increased 16% year over year to $1.019 billion. Growth can be attributed to higher sales of Medical Surgical, Pharmaceutical Systems and Diabetes Care products.
BD Diagnostics revenues increased 10% year over year to $595 million. Growth was primarily due to higher demand for the company’s safety-engineered devices and infectious disease testing systems.
BD Biosciences revenues were approximately flat year over year at $303 million. Becton’s capital funding constraints negatively impacted sales of clinical and research instruments in this business category.
Becton has also raised its sales and earnings per share guidance for full fiscal 2010. For the year, Becton now expects revenues to increase roughly 7% year over year, compared to the previous guidance of 6%. Earnings per share should increase approximately 2%−4% year over year to $5.05−$5.15. Becton’s previous guidance was an increase of 1%−3% year over year in earnings per share.
Becton, Dickinson and Company develops, manufactures and markets medical devices, supplies, laboratory equipment and diagnostic products globally. The company is a world leader in safety needle products. Becton competes with players like Baxter International Inc. (BAX).
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