For Immediate Release
Chicago, IL – February 22, 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: Dell Inc. (DELL), Ford (F), Toyota (TM), Honda (HMC) and Johnson Controls (JCI).
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Here are highlights from Friday’s Analyst Blog:
Dell Revenue Up, EPS Exceeds
Dell Inc. (DELL) reported fourth quarter 2010 EPS of 28 cents, exceeding the Zacks Consensus Estimate of 27 cents.
Revenue
Revenue for the quarter was $14.9 billion, up 11.0% from $13.4 billion reported in the year-ago quarter and up 16.0% from $12.9 billion reported in the previous quarter. The company’s fourth quarter revenue growth can be attributed to an improvement in revenue in all business segments, especially due to growth in the commercial business, fueled by growth in Enterprise Technology and also due to increase in product shipments, as the company reported its first consolidated results after the Perot acquisition.
Revenue by Segment
Large Enterprise posted revenue of $4.2 billion, an increase of 23.0% sequentially and 8.0% year-over-year. In the fourth quarter, the company witnessed a very strong pickup in demand, with large enterprise units improving 14% versus the third quarter.
Public revenue for the quarter was $3.8 billion, up 16.0% from the year-ago quarter. Under this segment, Services revenue more than doubled, derived from efficient solutions provided by Perot Systems to the company’s government and healthcare customers.
Small and Medium Business revenue for the quarter was $3.3 billion, up 10.0% from the year-ago quarter. Shipments increased 9% sequentially. This can be attributed to stronger sales of mobile computing products and servers, which increased 18.0%.
Revenues for Consumer Business grew 11.0% year-over-year to $3.5 billion, with shipments growing 29% year over year and 23.0% sequentially. Under this segment, revenue from consumer mobility products was up 26.0%.
In fiscal year 2010, the company expanded its consumer product portfolio and worldwide customer reach through different channels, which resulted in a 2 million unit increase in product shipments compared to the previous year.
Total sales from BRIC countries (Brazil, Russia, India and China) increased strongly, as revenue was up 72.0% to 81.0% in China, driven by increases in SMB and Large Enterprise businesses.
Chicago Auto Show: The Future Is Now?
This year’s concept cars at the Chicago Auto Show (the second of 11 auto shows held globally this year) seem to reflect this sentiment. Largely foregoing extravagant outer designs — and clearly dumping the gas-guzzling behemoth concept cars from auto shows a few years ago — this year’s auto show features many cars with hybrid engine technology and some with straight-up electric engines. Even GM’s Cadillac XTS Platinum concept is a hybrid V6 at this year’s auto show.
Elsewhere, new auto show models with 40+ miles per gallon are not uncommon, and many designs have taken a decidedly European (read: short-body) turn. In fact, both the new Ford (F) Focus and Fiesta have been developed by Ford of Europe. Hmm…suddenly, Chrysler merging with Fiat sounds a little less crazy…
OK, so what does the Chicago Auto Show mean for investors looking to take advantage of a burgeoning new auto market? Well, if what we’re seeing at this auto show in terms of advanced fuel efficiency does indeed point to the future of the industry, then one of the most promising new releases this year remains GM’s Chevy Volt.
GM Chairman/CEO Ed Whitacre has been quoted as saying the Chevy Volt will create an entire new ecosystem of battery developers, charging stations and electric motor suppliers (“The Truth About Cars“). But only a successful launch of the Chevy Volt late this year will begin to back up such lofty projections.
Besides, GM won’t be publicly traded again until this spring or summer, the earliest. And with GM’s other problems — chiefly the many billions of dollars GM owes to the U.S. Treasury, the UAW and the Canadian government — can one little electric car really turn around GM’s fortunes overnight? Probably not.
So while GM’s issues get sorted out — and speaking of GM’s issues, it’s hard to believe I’ve gone this long without even mentioning Toyota’s (TM) and Honda’s (HMC) recent spates of auto recalls — a good place to turn for investors would be select auto suppliers.
Even though the auto supplier sub-industry has been hit as hard if not harder overall than the major automakers during the sector’s deep downturn, and contains dozens of well-known companies currently awash in pink slips and over-the-counter trading, there is at least one bright spot to consider.
Wisconsin-based Johnson Controls (JCI) is a Zacks #1 Rank stock. Importantly, Johnson Controls’ businesses are diversified beyond the automotive industry, but 42% of Johnson Controls’ total 2009 revenue came from its Automotive Experience segment. An important part of this is Johnson Controls’ hybrid battery business, and Johnson Controls’ recent Delphi global battery acquisition is another big step to grow market share.
Following record-high earnings in its fiscal first quarter, Johnson Controls raised guidance for fiscal 2010 by 16%. 15 analysts covering Johnson Controls stock took notice and raised estimates for Johnson Controls’ current fiscal year; 11 of these raised fiscal second quarter estimates for Johnson Controls.
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