For Immediate Release
Chicago, IL – October 27, 2010 – Zacks.com Analyst Blog features: United States Steel Corp. (X), Bristol-Myers Squibb Company (BMY), AstraZeneca plc (AZN), BHP Billiton Ltd. (BHP) and Wyndham Worldwide Corporation (WYN ).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Thursday’s Analyst Blog:
U.S. Steel in the Red
The leading steel manufacturer in the U.S. and the fifth largest in the world, United States Steel Corp. (X), posted a net loss of 35 cents in the third quarter of 2010. Reported losses narrowed from the year-ago losses of $2.11 per share. The quarter, however, reported a foreign currency gain of 96 cents.
The Zacks Consensus Estimate was pegged at a profit of 22 cents for the third quarter. The lower-than-expected results were attributed to the uncertain economic recovery that is hurting demand for the company’s products. Quarterly revenues declined 4% to $4.5 billion on a 5% fall in shipments. Revenues, however, matched the Zacks Consensus Estimate. Operating losses of $138 million were significantly lower than last year’s loss of $412 million.
Bristol Beats on EPS, Not Revenues
Bristol-Myers Squibb Company’s (BMY) third quarter 2010 earnings (excluding special items) of $0.59 per share surpassed the Zacks Consensus Estimate by $0.06. The company had earned $0.47 per share in the year-ago quarter.
On a reported basis (including special items), Bristol-Myers’ earnings in the reported quarter climbed 22% to $0.55 per share. Even though Bristol-Myers’ lead product Plavix and therapies indicated for HIV and hepatitis performed well in the quarter, the better than expected earnings were mainly driven by cost controls and lower taxes.
Net sales in the reported quarter came in flat at $4.8 billion. Revenues were short of the Zacks Consensus revenue Estimate of $4.9 billion mainly because of lower sales of Abilify, approved for the treatment of schizophrenia and depression, cancer drug Erbitux and hypertension treatment Avapro. The healthcare reform enacted earlier in the year negatively impacted net sales in the reported quarter by 1.6%.
US net sales in the quarter climbed 4% to $3.1 billion. However, international sales slipped 6% to $1.7 billion mainly because of a 3% negative foreign exchange (Fx) impact.
Global net sales of Plavix, an anti-platelet blood thinner indicated to reduce the risk of heart attack in patients with atherosclerosis (the build-up of plaque and hardening of the arteries), climbed 7% to $1.66 billion in the quarter.
Worldwide sales of HIV treatment drugs Sustiva and Reyataz jumped to $342 million (up 9%) and $375 million (up 4%), respectively. Sales of Baraclude (entecavir), one of the top prescribed therapies for hepatitis B virus (HBV), camein at $228 million, up 19%. Sales of the rheumatoid arthritis drug, Orencia, stood at $184 million, up 14%, while the leukemia drug, Sprycel, registered sales of $144 million, up 35%.
Furthermore, Onglyza, a type II diabetes treatment, co-developed with AstraZeneca plc (AZN) contributed approximately $47 million to sales in the quarter as against $20 million in the third quarter of 2009. Global sales of Abilify came in at $608 million, down 7% from the year-ago quarter. Global net sales of Ixempra for the reported quarter came in at $29 million, up 4%.
Cancer drug, Erbitux, generated sales of $159 million in the reported quarter, down 11%. Global sales of Avapro came in at $303 million in the reported quarter, down 8%.
Gross margin as a percentage of net sales stood at 73.3% in the reported quarter. Marketing, selling and administrative expenses in the reported quarter declined 6% to $892 million. Advertising and product promotion for the quarter fell 10% to $231 million. Research and development expenses for the quarter came in flat at $824 million.
BHP Billiton Outperforms
We upgrade our recommendation on BHP Billiton Ltd. (BHP) from Neutral to Outperform on increased production in the first quarter of fiscal 2011.
BHP Billiton reported higher production with a 6% year-over-year increase in its iron ore production and growth of 3%, 3% and 10% in its oil and natural gas, copper, and coking coal production, respectively. During the quarter, expenditure on minerals exploration and petroleum exploration was $129 million and $74 million, respectively. BHP Billiton also provided guidance of $900 million for petroleum exploration expenditures in fiscal 2011. Based on the above, we increase our EPS estimate to $5.35 and $5.20 for fiscal 2011 and fiscal 2012, respectively. The gradual market recovery also supports our view on the company.
Further, we believe that the ongoing industrialization in China, the largest iron-ore importer, will improve the demand and price of its products in future. Fiscal 2010 bears evidence of the fact that both demand and prices improved due to strong recovery in China and India.
Wyndham Beats, Ups Guidance
Wyndham Worldwide Corporation’s (WYN ) third quarter 2010 adjusted earnings of 68 cents per share came well ahead of both the Zacks Consensus Estimate of 63 cents and the company’s guidance of 60 to 64 cents. In the year-earlier quarter, the company had earned 58 cents per share.
The increase was largely driven by strong operational performance by the Vacation Ownership business, higher revenue per available room (RevPAR) in the Lodging business and a lower effective tax rate. On a reported basis, Wyndham recorded 84 cents per share. Net revenue spiked 5% year over year to $1,065 million in the quarter under review, reflecting solid sales momentum in each of Wyndham’s three business units. However, revenues fell short of the Zacks Consensus Estimate of $1,070 million.
Inside the Headline Numbers
The Lodging segment’s revenues increased 11% year over year to $203 million. This increase was driven by the increase in RevPAR and other franchise fees as well as higher fees generated from ancillary services provided to franchisees. System-wide RevPAR grew 6.7% (6.4% on a constant currency basis). Revenues from Vacation Exchange and Rentals segment nudged up 1% year over year to $330 million. On a constant currency basis, revenues increased 5%. Vacation rental revenues and annual dues and exchange revenues shot up 3% from the prior-year period to $161 million buoyed by the recently acquired Hoseasons brand and favorable pricing for bookings.
Revenues from the Vacation Ownership segment rose 5% to $533 million. The increase was credited to lower loan loss provisions and substantial contribution from gross Vacation Ownership Interest (VOI) sales. Gross VOI or timeshare sales climbed 13% year over year to $412 million driven by an 8% increase in tour flow and a 7% increase in volume per guest.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks “Profit from the Pros” e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com
ASTRAZENECA PLC (AZN): Free Stock Analysis Report
BHP BILLITN LTD (BHP): Free Stock Analysis Report
BRISTOL-MYERS (BMY): Free Stock Analysis Report
WYNDHAM WORLDWD (WYN): Free Stock Analysis Report
UTD STATES STL (X): Free Stock Analysis Report
Zacks Investment Research
