For Immediate Release
Chicago, IL – February 23, 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: Schlumberger Ltd. (SLB), Smith International Inc. (SII), ExxonMobil (XOM), Halliburton Company (HAL) and First Solar Inc. (FSLR).
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Here are highlights from Monday’s Analyst Blog:
Schlumberger Acquires Smith Int’l
Oilfield services giant Schlumberger Ltd. (SLB) has acquired lesser rival Smith International Inc. (SII) for approximately $11 billion in an all-stock deal, which is the biggest acquisition in the United States so far this year.
The Wall Street Journal had reported on Friday that Schlumberger was in advanced talks to buy Smith. Following this news, Smith’s shares jumped 13% but Schlumberger’s shares fell 2.9%.
As the economy has shown signs of recovery and oil prices have seen an uptrend, industry giants want to acquire smaller rivals to increase their business. While the Schlumberger−Smith deal is in the oilfield space, last December’s ExxonMobil (XOM)-XTO deal was in the integrated space.
We view the transaction a win-win for the shareholders of both companies, as they would get a more diversified oilfield services exposure. Given that both companies cover the same geographical regions, Smith is a good strategic fit for Schlumberger.
Following the completion of this transaction, Schlumberger will rule the oilfield services industry with the merged company’s revenue (nearly $30.9 billion in 2009, comprising Schlumberger’s $22.7 billion and Smith’s $8.2 billion) will be more than double that of its nearest rival Halliburton Company’s (HAL) $14.7 billion.
With an increasing global energy demand, producers need to have drilling equipment and advanced technology to cope with drilling in increasingly difficult environments. In addition to Schlumberger’s product lines, customers of the merged company will be able to drill more economically in a challenging environment through Smith’s drilling fluids, drill bits and accelerated technology development.
First Solar Tops, Reaffirms View
First Solar Inc. (FSLR) surpassed the Zacks Consensus earnings per share (EPS) estimate of $1.49 by 16 cents to reach $1.65 in the fourth quarter of fiscal 2009. It also beat the year-ago quarterly EPS figure of $1.61 by 4 cents.
The upbeat trend was reflected in fiscal 2009 results as well, where an EPS of $7.53 exceeded the Zacks Consensus Estimate of $7.34 and almost doubled, compared to the fiscal 2008 EPS of $4.24.
Out of the 31 analysts covering the stock, 5 and 2 have revised their estimates downward for fiscal 2010 in the last 30 and 7 days, respectively. The fiscal 2010 Zacks Consensus EPS estimate is presently at $6.45. This is in line with the company’s EPS projection of $6.05 to $6.85.
The company has provided positive surprises over the last 4 quarters. First Solar has beaten the Zacks Consensus Estimate by 22.4% on average over that time period. Although reported earnings were upbeat, we are cautious over the near-term performance of the company.
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