For Immediate Release
Chicago, IL – October 27, 2009 – 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: Verizon (VZ), AT&T (T), Google (GOOG), Apple (AAPL) and Oxygen Biotherapeutics, Inc. (OXBO).
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Here are highlights from Monday’s AnalystBlog:
Verizon Matches Zacks Forecast
Verizon (VZ) reported operating results for third-quarter 2009 with adjusted earnings per share (EPS) of 60 cents, coming in line with the Zacks Consensus Estimate while declining from 66 cents reported a year-ago.
Adjusted EPS excludes one-time severance, pension and benefit charges, merger integration and acquisition costs and expenses associated with the impending spin-off of specific wireline assets. The largest US wireless carrier reported net income of $2.89 billion (41 cents per share), representing a 9.8% decline from $3.2 billion (59 cents per share) registered in the year-ago quarter, largely due to rising costs and declining wireline business.
Operating results for the quarter were highlighted by healthy gains across strategic growth areas such as wireless, broadband Internet and video. Verizon reported revenue of $27.3 billion for the quarter, up 10.2% year over year, driven by contribution from Alltel Corp acquired in early 2009.
Verizon exited the quarter with 89 million wireless customers, up 25.7% year over year. Net customer additions for the quarter were 1.2 million (excluding acquisitions) which compares to 2 million net additions registered by its major rival AT&T (T). Net retail subscriber additions for the quarter were 1 million, bringing the total retail customer base to 86.3 million.
On the wireline side, revenue fell 4.8% year over year to $11.6 billion due to continued declines across global wholesale and enterprise businesses. Total switched access lines declined 10% year over year to 33.4 million. This was partly offset by respectable growth across the company’s FiOS footprint and broadband business.
During the quarter, Verizon added a net of 191,000 new FiOS TV customers and 198,000 net new FiOS Internet customers, both representing sequential declines. At the end of the quarter, the company had 2.7 million FiOS TV customers and 3.3 million FiOS Internet customers. The penetration rate of FiOS Internet and FiOS TV currently averages 28.5% and 24.9% across all markets, respectively. Total broadband connections reached 9.2 million, up 8.5% year over year, with 63,000 new connections registered in the quarter.
Verizon remains committed to offer incremental returns to its shareholders leveraging a healthy free cash flow ($10.7 billion for the first nine months of 2009). The company has increased its quarterly dividend by 3.3% to 47.5 cents per share. Annualized, this increases the company’s dividend to $1.90 per share (from $1.84 per share).
Verizon continues to extend its nationwide coverage of its high-speed 3G wireless network, covering roughly 284 million people. The company is also testing Long Term Evaluation (“LTE”) technology based 4G network and plans to launch the first commercial service in 2010 in up to 30 markets. Verizon is also gearing up to launch smartphones based on Google’s (GOOG) Android platform which are expected to strongly compete with Apple’s (AAPL) iPhones.
Initiating Oxygen Bio at Outperform
We are initiating coverage of Oxygen Biotherapeutics, Inc. (OXBO) with an ‘Outperform’ rating. Despite what has been a tumultuous past for the company and a abysmal fate for competitors attempting to develop similar products, the potential upside that Oxycyte offers is too significant to ignore.
In theory, Oxycyte has the potential to be a wonder drug — a sort of WD-40 of medicine. Preclinical data suggests that Oxycyte has astounding potential for the treatment of traumatic brain injury (TBI), decompression sickness, carbon monoxide poisoning, sickle cell crisis, organ preservation and as a neuroprotectant in patients with myocardial infarction or stroke.
The effects in TBI were clearly evident in the phase I program conducted by Oxygen Bio in 2006. Initial phase II data from STOP-TBI will become available in 2010. However, data from small animal studies show that intravenous injection of Oxycyte following lateral fluid percussion injury acts as a neuroprotectant in preserving neuronal cell counts and improving brain tissue oxygen consumption. Other small animal studies suggest that Oxycyte can improve circulating oxygen levels and cerebral blood flow following an induced ischemic stroke.
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