For Immediate Release
Chicago, IL – November 9, 2009 – 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: Avnet, Inc. (AVT), Arrow Electronics (ARW), VeriSign, Inc. (VRSN), Patterson-UTI Inc. (PTEN) and Nabors Industries (NBR).
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Here are highlights from Friday’s Analyst Blog:
Avnet Tops Estimates
Avnet, Inc. (AVT) recently reported revenues of $4.36 billion for the first quarter of fiscal 2010, down 3.1% from a year ago. Excluding the negative impact of foreign currency exchange rates, revenues declined 0.6%.
Management stated that the impact of global slowdown led to the year-over-year decline, but the business environment is improving.
Earlier, rival Arrow Electronics (ARW) reported a small profit and provided a disappointing forecast. Profit narrowed significantly at Arrow due to restructuring charges. The company provided a conservative guidance for the fourth quarter, due to limited visibility.
VeriSign Beats Forecast
Last night, VeriSign, Inc. (VRSN) reported revenues of $258 million from continuing operations in the third quarter of 2009.
Core businesses (Internet Infrastructure and Identity Services) generated revenues of $257 million, up 1% sequentially and up 6% year-over-year. Revenues from discontinued operations came in at $41 million.
Patterson Net Falls, but Beats View
Patterson-UTI Inc. (PTEN) reported a narrower-than-expected third-quarter loss of 12 cents per share, reflecting a recovery in rig demand as customers prepare for ramped up drilling activities in 2010. The Zacks Consensus Estimate was pegged at a loss of 16 cents per share.
In the year-ago period, the company earned 69 cents per share. Revenue was down 71.1% year over year to $176.2 million. The negative comparisons compared to the year-ago period reflect lower drilling activity. The number of rigs operating during the quarter averaged 73 (70 located in the U.S. and 3 in Canada), compared to 276 average rigs operating in the third quarter of 2008. However, it was up from 63 rigs operating in the June quarter.
We remain concerned about the North American land drilling scene and its impact on Patterson-UTI, one of the largest onshore drillers. We believe that the current supply overhang in the natural gas market will continue to weigh on the company’s dayrates and margins during the next few quarters.
On the positive side, Patterson-UTI’s premium newbuild fleet and stellar financial health (free cash flow positive and a debt-free balance sheet) should help it weather the downturn better than its peers, such as Nabors Industries (NBR). Considering these factors, we believe that Patterson-UTI shares are fairly valued at current levels. As such, we see the stock performing in line with the broader market and rate it as Neutral.
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