For Immediate Release
Chicago, IL – February 10, 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: Wal-Mart (WMT), Target (TGT), Molson Coors Brewing Co. (TAP), UBS AG (UBS) and Pulte Homes (PHM).
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Here are highlights from Tuesday’s Analyst Blog:
Not Layoffs, but Lack of New Jobs
While not a huge industry to start with, the Arts and Entertainment field has seen a particularly steep drop in the number of job openings relative to a year ago, falling 45.0%. Meanwhile the number of separations has barely fallen at all, down just 1.9%.
In retail (these are seasonally adjusted numbers so it is not just Christmas), the number of job openings rose sharply in December from November, up 24.9%, but they remain 27.0% below a year ago. While retail jobs tend to be at the low end of the pay spectrum, firms like Wal-Mart (WMT) and Target (TGT) are among the biggest employers in the country (Wal-Mart is the biggest).
The pick-up in December could be just because of bad seasonal adjustments, but if it is real, it is a good sign about the total number of jobs in the economy. However, it is not that great an omen about the quality of the jobs being created.
In other words, what we are seeing is a big drop in the mobility of the job market. One potential reason for this could be the housing market. If people cannot sell their house because they are underwater on their mortgage, they are less likely to move to take a new job.
However, the short length of the time series makes any conclusions of that sort very tentative. That said, it does seem clear that the real problem is the lack of new job creation, not the rate of job losses.
Molson Coors Misses Expectations
Molson Coors Brewing Co.’s (TAP) second-quarter earnings came in at $222.1 million, compared to $93.7 million in the year-ago quarter. Excluding certain one-time items, pro forma earnings came in at $1.02 per share, which missed the Zacks Consensus Estimate of $1.10 per share derived from 9 covering analysts. The worse-than-expected results were primarily caused by sluggish volumes and cost inflation in the U.S. and the U.K.
Net sales recorded a growth of 11.0% to $820.8 million from $739.2 million in the year-ago quarter, primarily due to positive pricing and favorable mix. In terms of segments, sales grew 8.9% to $442.8 million in Canada, 13.6% in the U.K. to $358.6 million and 15.5% in the international segment to $19.4 million.
Overall beer volumes slipped 4.0% year-over-year to 12.11 million hectoliters. The company’s Canadian segment volumes remained essentially flat at 2.099 million hectoliters, while the U.K. segment recorded a decrease of 9.3% to 2.462 million hectoliters.
Molson Coors’ gross margin improved by 260 bps year-over-year to 42.1%, mainly due to favorable mix and lower commodity and packaging-related costs in Canada. However, marketing, general and administrative expenses rose by 25.8% to $247.5 million, primarily due to higher compensation and brand investments. Accordingly, operating margin declined by 310 bps to 16.6% from 19.7% in the year-ago quarter.
Molson Coors ended the quarter with cash and cash equivalents of $723.2 million, compared to $390.9 million in the year-ago period. During 2009, the company deployed $170.4 million towards dividend payments, $124.7 million towards capital expenditure and $66.3 million towards investment in the MillerCoors JV.
UBS Profits, Outflows Continue
UBS AG (UBS) has reported a fourth quarter net profit of CHF 1.21 billion ($1.1 billion) compared to a loss of CHF 564 million in the prior quarter and a loss of CHF 9.56 billion in the year-ago quarter. This is the first positive quarter since the third quarter of 2008. Results were aided by lower costs and a tax credit. However, the company experienced an increase in client money outflows.
UBS reported a 21% year-over-year decline in expenses to CHF 5.18 billion, primarily reflecting the cost cut initiatives and the headcount reduction. The reported quarter’s results include a CHF 480 million tax credit is mainly attributable to the revaluation of deferred tax assets, principally in the U.S.
However, outflows of client money continued in the quarter. The company reported outflows of CHF 56.2 billion during the quarter, which picked up from CHF 36.7 billion incurred in the prior quarter but decreased from CHF 85.8 billion in the year-ago quarter.
Invested assets of CHF 2,233 billion on Dec 31, 2009, were down 1% sequentially but up 3% year-over-year. In the reported quarter, net new money outflows were CHF 33.2 billion for Wealth Management & Swiss Bank, CHF 12.0 billion for Wealth Management Americas and CHF 11.0 billion for Global Asset Management.
UBS AG’s tier-1 capital ratio increased to 15.4% from 15.0% at the end of the prior quarter and 11.0% at the end of 2008. Total risk-weighted assets were down 32% year-on-year to CHF 207 billion on Dec 31, 2009.
The global economic turmoil severely hurt the Swiss banking major’s balance sheet when the subprime crisis led to record losses. Additionally, the issues emanating from the dilution of Swiss banking secrecy significantly challenges the company’s sustainable recovery.
Pulte Homes Loss Widens
Pulte Homes (PHM) has shown a loss of $835 million or $2.21 per share (before special items) for the fourth quarter of 2009, driven by weak demand for new homes. This is much broader than the loss of $480 million or $1.89 per share (before special items) in the same quarter a year ago and the Zacks Consensus Estimate of 17 cents per share.
Consolidated revenue for the quarter went up 6% to $1.7 billion, including the operations of the recently completed merger with Centex Corporation. Revenue from Homebuilding rose 7% to $1.6 billion. The increase in revenue reflected a 13% increase in closings to 6,200 homes, partially offset by a 7% decrease in average selling price to $258,000.
The net new home orders in the quarter, inclusive of Centex operations for the entire period, increased 113% to 3,748 homes. The quarter-end backlog as of December 31, 2009, was 5,931 homes, valued at $1.6 billion compared to a backlog of 2,174 homes, valued at $631 million for the fourth quarter of 2008.
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