For Immediate Release
Chicago, IL – October 6, 2010 – Zacks.com Analyst Blog features:Chevron Corp. (CVX), ExxonMobil Corp. (XOM), The Boeing Company (BA), Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).
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Here are highlights from Tuesday’s Analyst Blog:
Chevron Plans Buyback Resumption
Following a hiatus of nearly two years, energy major Chevron Corp. (CVX) yesterday announced plans to restart quarterly buybacks of up to $1 billion of its common stock starting from the fourth quarter of 2010. The oil and gas producer is targeting a quarterly repurchase rate of $500 million to $1 billion as part of a program earlier approved by the Board of Directors.
Chevron, which is slated to report its third-quarter results on October 29, has bolstered its cash flows in recent times on the back of the company’s ongoing capital discipline and impressive returns from newly developed projects. We believe that the resumption of the buyback program not only highlights the company’s commitment to create value for shareholders but also underlines the oil giant’s confidence on commodity prices.
The second-largest U.S. oil company by market value after ExxonMobil Corp. (XOM) is in good shape financially with enough cash flow in its kitty to support capital spending and dividend, as well as return cash back to shareholders.
San Ramon, California-based Chevron is one of the largest publicly traded oil and gas firms in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.
Chevron shares currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
Boeing Gets Another Bulk Order
The Boeing Company (BA) will supply 60 737-800 airplanes to Air Lease Corporation through 2017. Of the orders bagged, 54 are firm orders while the remaining 6 require reconfirmation.
Entering into the fourth quarter, this is the second order Boeing received for supplying 737-800 airplanes. Recently, Luxair Luxembourg Airlines, the national carrier of the Grand Duchy of Luxembourg, ordered an additional 737-800 airplanes. The 737-800 has an average list price of $77 million.
The company’s Commercial Airplanes segment suffered a 12% year-over-year revenue decline during the second quarter of 2010 largely due to lower new airplane sales. Lower 737 and 777 deliveries, primarily issuing from supplier production challenges relating to seats, were responsible for the much diminished new airplane sales.
The segment ended the second quarter with a contractual backlog of $251.6 billion, up 0.4% from the 2009-end level. We, however, expect order wins and scheduled deliveries in the segment to help deliver improved results in the forthcoming quarters.
The Zacks Consensus Earnings Estimate for fourth-quarter 2010 is $1.13 per share. For full years 2010 and 2011, the Zacks Consensus Estimates are, respectively, $3.88 per share and $4.84 per share.
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.
On the flip side, a delay in the delivery of the 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) and Northrop Grumman Corporation (NOC).
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BOEING CO (BA): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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