Zacks Analyst Blog Highlights: NYT,C,MTLQQ,TM,HWAY – Press Releases

Chicago, IL – October 19 2010 – Zacks.com Analyst Blog features:

The New York Times Company (NYSE: NYT), Citigroup Inc. (NYSE: C), General Motors(PINK: MTLQQ), Toyota Motor Corp (TM) and Healthways, Inc. (HWAY).

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Here are highlights from Monday’s Analyst Blog:

Earnings Preview: New York Times

The New York Times Company (NYT), a diversified media conglomerate, is scheduled to report its third-quarter 2010 financial results before the bell on Tuesday, October 19, 2010. The current Zacks Consensus Estimate for the quarter is 5 cents a share.

Third-Quarter 2010 Consensus

Analysts expect The New York Times Company to post third-quarter 2010 earnings of 5 cents a share. The current Zacks Consensus Estimate represents a year-over-year decline of 68.8%. In the last 7 days, only 1 out of 3 analysts covering the stock revised his estimate upwards, which led to an increase of one cent in the Estimate.

With respect to earnings surprises, The New York Times Company has met as well as topped the Zacks Consensus Estimate over the last four quarters in the range of 0.0% to 700%. The average remained at 245.3%. This suggests that The New York Times Company has outperformed the Zacks Consensus Estimate by an average of 245.3% in the last four quarters.

New York Times in Neutral Lane

The ongoing slump in the advertising market continues to weigh upon The New York Times Company. The company now expects third-quarter 2010 total revenue to decline by 2% to 3%, after registering a growth of 1.2% in the previous quarter, stemming from the uncertainty among advertisers weighed down by the sluggish economic recovery.

The company is witnessing a fall in print advertising and circulation revenues, as well as a slowing growth in digital advertising. The company now expects print advertising revenue to drop by 5% in third-quarter 2010 versus a decline of 6% in the previous quarter. Circulation revenue is expected to fall by 5% compared with a growth of 3.2% in second-quarter 2010.

The New York Times indicated a decelerating growth in digital advertising revenue to 14% in the quarter under review from a growth of 21% in second-quarter 2010.

We observe that the company faces a significant risk of high dependence on advertising revenues, which are driven by the health of the economy. To mitigate this, The New York Times is transmuting its business model by adding diverse revenue streams, which include a circulation pricing model and a pay-and-read model for NYTimes.com (in 2011).

The company is also adapting to the dynamics of the multiplatform media universe, which currently includes mobile, social media networks and reader application products.

Given the pros and cons we prefer to be Neutral on the stock with a target price of $8.25. However, The New York Times Company holds a Zacks #4 Rank, which translates into a short-term Sell recommendation, reflecting the company’s disappointing third-quarter 2010 outlook.

Citigroup Beats Zacks Estimates

Citigroup Inc. (C) reported third quarter 2010 earnings of 7 cents per share, ahead of the Zacks Consensus Estimate of 5 cents. Excluding the pre-tax loss of $800 million ($435 million after-tax) related to the sale of The Student Loan Corporation, net income came in at $2.6 billion or 8 cents per share.

Though the results were below the prior quarter earnings of 9 cents, they compared favorably with the loss of 27 cents per share during the same quarter last year.

Third quarter 2010 results reflect an improvement in the credit quality and lower loan loss provisions. However, revenues remained pressured and reported a drop. Revenues came in at $20.7 billion, down 6% from the prior quarter and also below the Zacks Consensus Estimate of 21.0 billion.

The decrease was primarily due to a drop in revenues from Local Consumer Lending and Securities and Banking business. Though revenues at Citicorp Latin America and Asia advanced 7% and 1%, respectively, revenues at North America and EMEA were down 6% and 2%, respectively, from the prior quarter.

However, provisions for credit losses and for benefits and claims continued to decrease to $5.9 billion, down 11% sequentially. This represents the lowest level since the second quarter of 2007. Net release of reserves for loan losses and unfunded lending commitments were $2.0 billion, compared with $1.5 billion in the prior quarter

GM Recalls 300,000 Impalas

General Motors (MTLQQ) has announced to recall more than 300,000 units of its four-door sedan, Chevrolet Impala, due to a problem with its seat belts. The National Highway Traffic Safety Administration has indicated that the seat belts in the front seats are likely to fail to restrain people during a crash.

The recall affected Impalas manufactured in 2009 and 2010. Of the total recalled vehicles, 303,100 vehicles were sold in the U.S. and more than 19,000 in Canada. GM is not aware of any injuries or deaths related to the defective seat belts in the vehicles.

Since the beginning of the year, GM has recalled more than 3 million vehicles in the U.S., Canada, Mexico and South Korea. Among these, the largest recall occurred in June, involving 1.5 million vehicles, in order to fix a problem with a heated windshield wiper fluid system that has been causing fire in the vehicles.

The June recall affected 2006 to 2009 model years of Buick Lucerne, Cadillac DTS, and Hummer H2; 2008-2009 Buick Enclave and Cadillac CTS; 2007-2009 Cadillac Escalade, Escalade ESV and Escalade EXT; 2007-2009 Chevrolet Avalanche, Silverado, Suburban and Tahoe; 2007-2009 GMC Acadia, Sierra, Yukon and Yukon XL; 2007-2009 Saturn Outlook; and 2009 Chevrolet Traverse.

In fact, it was GM’s second recall over the same issue in two years. In August 2008, the automaker recalled 900,000 vehicles due to the same problem of a heated washer fluid system on the back of a short circuit on the circuit board that overheated the ground wire in the vehicles.

Recently, the automaker has announced to recall 4,000 units of Cadillac SRX crossovers in order to fix a problem with the power steering that could lead to engine fires. The recalled vehicles were manufactured in December 2009 and are sold in the U.S. and China.

Automotive safety recalls have become the talk of the town after Toyota Motors’ (TM) announcement of the largest-ever global recall of about 11 million vehicles since September last year. The Japanese automaker’s recall was related to problems such as faulty accelerator gas pedals and slipping floor mats as well as defective braking systems.

U.S. Well-Being Index Slides Again

Healthways, Inc. (HWAY) and Gallup recently announced the results of the Gallup-Healthways Monthly U.S. Well-Being Report for the month of September 2010. The overall measure, the Gallup-Healthways Well-Being Index, declined slightly for the fourth consecutive month in September, dropping to 66.4, its lowest point during the current year.
 
The reduced composite measurement of well being, as provided by the Well-Being Index, confirms mediocre readings from other key barometric measures, such as unemployment figures, during the month. The extended impact of the recession and the negative effect of the downturn on the American workplace were clearly evident in the results of this report.
 
The decline of the Well-Being Index was largely due to the Life Evaluation Index hitting its lowest level in 14 months. In addition, the Healthy Behavior Index and the Physical Health Index experienced statistically significant declines. Moreover, the Work Environment Index slipped to record lows for the second month in a row. 
 
Among the notable indices, the Physical Health Index fell to its nadir of 76.2, since May 2009. The decline in September was due to a record 24.9% of Americans complaining of physical distress. Further, Americans were more exhausted than before, with 30% reporting fatigue during the month, the highest level post December 2008.
 
Healthways is a prominent vendor of specialized and composite solutions, enabling recipients to maintain or improve their well being and consequently, reduce systemic healthcare costs. The company’s solutions are intended to keep people healthy and mitigate lifestyle risk factors that can cause disease and optimize care for those with chronic illness.

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