For Immediate Release
Chicago, IL – January 15, 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: Intel Corp. (INTC), Sunoco Inc. (SUN), Tesoro Corp. (TSO), Valero Energy Corp. (VLO) and Western Refining Inc. (WNR).
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Here are highlights from Thursday’s Analyst Blog:
Intel Soundly Beats Estimates
Those who expected strong earnings data from Intel Corp. (INTC) this afternoon — which is to say practically everybody — were not disappointed. Intel brought $10.6 billion in revenue (up 13% sequentially) for its fiscal 4th quarter on a whopping record gross margin of 65% and Operating Income up $958 million year over year. Yes, the comparibles to INTC’s 2009 4th quarter were going to be easy to beat; Intel trounced them.
Intel’s 4th quarter EPS was 40 cents per share, soundly beating the Zacks Consensus Estimate of 34 cents. The Zacks EPS had been dipping somewhat over the past quarter, with a third of the analysts covering INTC revising quarterly estimates in the past month — 6 upwards, 7 downwards. Where most of the revision activity had been was for the 1st quarter 2010, where 13 analysts have increased EPS estimates in the past 30 days.
There, the forecast from Intel is steadily impressive — expect more good things. Gross margin is estimated to be between 59-63% in Q110, with revenues in the $9.4-10.1 billion range.
The anticipation for Intel numbers had been palpable all day. INTC stock rose 2.48% during regular trading (up 52 cents, to close at $21.48) and shot up another 36 cents per share (1.68%) after hours.
Not too shabby a way for the tech giant to help kick off 4th quarter earnings season.
Crude Oil Dips on Inventory Jump
The larger-than-anticipated buildup in crude and fuel supplies (gasoline and distillates) has again raised concerns about the U.S. crude demand and the sluggish pace of a global economic recovery. As a result, following the EIA release, crude oil prices pulled back below $80 a barrel, the lowest level the commodity has traded at since the end of 2009.
Further exerting downward pressure on the commodity were worries relating to expectations of warmer weather in the coming months, along with Chinese banking regulation that could threaten the appetite of the world’s second largest global crude oil consumer.
The EIA numbers prove that the specter of a continued glut in global crude/fuel supplies still exists, and all of the inventories remain higher compared to averages for this time of year. As a result, we are not fully convinced about the sustainability of crude oil’s current gains, which have staged a remarkable rally in 2009, increasing more than 75% (following a 54% dip in 2008). In particular, refining activity remains weak with utilization rates staying at historic lows for this time of the year amid too much supply of petroleum products in the face of sharply lower demand.
As such, we have a bearish stance on oil refiners like Sunoco Inc. (SUN), Tesoro Corp. (TSO), Valero Energy Corp. (VLO) and Western Refining Inc. (WNR), given that the overall environment for refining margins is likely to remain poor. The sharply lower refinery utilization (at just 81.3% of capacity) provides enough evidence that refineries are cutting back on production because the economy is still struggling on the demand side.
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