For Immediate Release
Chicago, IL – April 5, 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: Research In Motion Ltd. (RIMM), Apple Inc. (AAPL), Hartford Financial Services Group Inc. (HIG), JPMorgan Chase and Co. (JPM) and Bank of America Corp. (BAC).
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Here are highlights from Thursday’s Analyst Blog:
RIMM Misses but Outlook Strong
Yesterday after market close, Research In Motion Ltd. (RIMM) declared its fourth quarter fiscal 2010 financial results, which were below the Zacks Consensus Estimate. Consequently, its stock price was down $3.42 (4.62%) to $70.55 in after-market trade on Nasdaq.
Nevertheless, management provided a solid financial guidance for the ongoing first quarter of fiscal 2011, which may act as a silver lining for the stock in the near term.
Fourth quarter 2010 total revenue of $4.08 billion was up 18% year-over-year and 4% sequentially. However, the quarterly revenue was far below the Zacks Consensus Estimate of $4.30 billion. This was primarily due to lower BlackBerry device shipments of 10.5 million units compared to the average expectation of 11 million units.
RIMM claimed that the lower device shipment was due to inventory reduction by a major wireless service provider. Although BlackBerry still holds its market leadership position in the North American region, it seems the company is losing out to the iconic touchscreen smartphones of Apple Inc. (AAPL).
Fourth quarter net income was $710.1 million or $1.27 per share compared to a net income of $628.4 million or $1.10 per share in the prior-year quarter and a net income of $518.3 million or 90 cents per share in the previous quarter. However, the quarterly EPS of $1.27 was marginally below the Zacks Consensus Estimate of $1.28.
Hartford Completes TARP Repayment
Following its accumulation of $3.05 billion funds from new securities, Hartford Financial Services Group Inc. (HIG) said on Wednesday that it has completed the repayment of the entire $3.4 billion of bailout money it received from the government for its participation in the Troubled Asset Relief Program (TARP) at the height of the credit crisis.
The complete repayment of TARP will free the life and property insurer from government involvement in its affairs and pay restrictions, even though the Treasury will still hold Hartford’s warrants for about 52 million shares at an exercise price of $9.79 each. Hartford does not intend to repurchase the warrants at this point.
As part of Hartford’s $3.05 billion fund raising, the company sold $1.1 billion in senior notes and issued $1.95 billion in stock ($1.45 billion in common stock and $500 million in convertible preferred stock).
After incurring sturdy credit losses, Hartford reduced its dividend and raised billions of dollars in private and public transactions last year. It has also reduced headcount to stabilize its financial position.
Nevertheless, during the fourth quarter of 2009, Hartford returned to profitability for the first time since mid-2008. Hartford’s core earnings during the quarter came in at $1.51 per share, substantially ahead of the Zacks Consensus Estimate of $1.40. This also compares favorably with the core loss of 72 cents in the year-ago quarter.
The upside was primarily attributable to the stability in Hartford’s life and property and casualty businesses. Also, Hartford ended the year with a strong capital position. Despite the overall market conditions remaining timid, Hartford delivered strong underwriting results. During the fourth quarter, rising stock markets helped strengthen investment income in the company’s life insurance business.
However, the results suffered from losses in Hartford’s investment portfolio and higher costs related to the variable annuity business. We remain concerned with Hartford’s exposure to variable annuities and pressure on Life segment as consumers seek relatively safe investment vehicles for their retirement assets.
Most of the major institutions in the financial market such as JPMorgan Chase and Co. (JPM) and Bank of America Corp. (BAC) have repaid the TARP loans. Also, the Treasury has started auctioning stock warrants it acquired from the banks that received taxpayers’ money and have fully repaid the same. According to the Treasury, losses on TARP investments are likely to be significantly trimmed with the improvement in the overall financial condition.
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