For Immediate Release
Chicago, IL – October 28, 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: Family Dollar (FDO), Costco (COST), Macy’s (M), JC Penney (JCP) and L-3 Communications Holdings Inc. (LLL).
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Here are highlights from Tuesday’s AnalystBlog:
Consumer Confidence Crumbles
As for expectations about the future, there are still more people out there who expect things to get better over then next six months rather than deteriorate, but the margin is closing. In October, 20.8% expected to see things get better versus 18.3% who thought things will get worst by next spring, a 2.5% margin. Last month 21.3% expected improvement while 14.6% expected things to get worse, a margin of 6.7%. Only 10.3% expect their personal incomes will be going up over the next six months, down from 11.2% last month.
If people are not confident about the future, they are less likely to open up their wallets. As we move into the Christmas shopping season, this drop in confidence could be setting the stage for a very weak retail season, although last year was not exactly great and so retailers will have the benefit of easy comps.
I suspect that the discount-oriented stores like Family Dollar (FDO) and Costco (COST) will be better positioned to weather the storm than mid-priced retailers like Macy’s (M) and JC Penney (JCP). Over the long term, less consumer spending is a good thing, since it is the only way that we will get the savings rate back up. However, in the short term it directly causes economic weakness, and with it even fewer jobs and less confidence.
L-3 Tops Estimates, Raises Guidance
Before the opening bell, L-3 Communications Holdings Inc. (LLL) released strong third quarter results. In the reported quarter, the company clocked earnings per share (EPS) of $2.12, soundly beating both the Zacks Consensus Estimate of $1.85 and the year-ago quarterly EPS of $1.73.
Net sales rose 5% to $3.8 billion in the reported quarter from $3.7 billion in the year-ago quarter. The upside came mainly from the Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C3ISR) and Aircraft Modernization and Maintenance (AM&M) segments. However, these were partially offset by decrease in the Government Services and Specialized Products segments sales year-over-year.
C3ISR segment sales rose 21% year-over-year primarily due to increased demand and new business from the U.S. Department of Defense (DoD) for airborne ISR and networked communication systems for manned and unmanned platforms. AM&M sales increased 17% due to higher revenues from systems field support services, Special Operations Forces logistics support and higher sales for Joint Cargo Aircraft (JCA).
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