Welcome!

News Feed Item

The Zacks Analyst Blog Highlights: Research In Motion, Apple, Google, NYSE Euronext and IntercontinentalExchange

CHICAGO, Dec. 31, 2012 /PRNewswire/ -- 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., (Nasdaq:RIMM), Apple Inc. (Nasdaq:AAPL), Google Inc. (Nasdaq:GOOG), NYSE Euronext Inc. (NYSE:NYX) and IntercontinentalExchange Inc. (NYSE:ICE).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

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 Friday's Analyst Blog:

Earning Scorecard: RIMM

Following the third-quarter 2013 earnings announcement on December 20, 2012 for Research In Motion Ltd., (Nasdaq:RIMM), there was a huge downward revision of EPS estimates.

Third Quarter Highlights

GAAP net income in the third quarter of fiscal 2013 was $14 million or 3 cents per share compared with $265 million or 51 cents per share in the year-ago quarter. The company incurred a huge one-time income tax benefit of $226 million. Excluding this item, quarterly adjusted loss per share of 22 cents was better than the Zacks Consensus Estimate of a loss of 35 cents per share. Total revenue in the quarter was $2,727 million, down by a whopping 47.2% year over year but well ahead of the Zacks Consensus Estimate of $2,647 million. Quarterly gross margin was 30.4% well above 27.2% in the prior-year quarter. Quarterly operating loss was $230 million compared to an operating income of $328 million in the year-ago quarter.

Agreements of Analysts

For the fourth quarter of fiscal 2014, in the last seven days, out of the 29 estimates, 14 were revised downwards but at the same time there were seven upward revisions of EPS estimates. Likewise, for the first quarter of fiscal 2014, out of the 25 estimates, 10 have lowered their estimates while seven estimates moved in the opposite direction.

Currently, the Zacks Consensus EPS Estimate for the fourth quarter of fiscal 2013 is pegged at a loss of 29 cents, reflecting an annualized decline of 136.38%. Similarly, for the first quarter of fiscal 2014, the current Zacks Consensus EPS Estimate of a loss of 16 cents indicates an year-over-year increase of 56.54%.

We believe that stiff competition from Apple Inc.'s (Nasdaq:AAPL) iPhones and Google Inc.'s (Nasdaq:GOOG) Android-based smartphones coupled with a backdated operating system have caused downward revision of estimates. Moreover, delay in the launch of BlackBerry 10-based smartphones coupled with the lackluster performance of PlayBook tablets has resulted in further decrease in estimates.

Magnitude of Estimate Revisions

During the last 7 days, the current Zacks Consensus Estimate for the fourth quarter of fiscal 2013 was 2 cents above the loss per share of 27 cents of the previous Zacks Consensus Estimate. Similarly, for the first quarter of fiscal 2014, the current Zacks Consensus Estimate was 3 cents above the loss per share of 13 cents of the previous Zacks Consensus Estimate.

Likewise, for fiscal 2013, the current Zacks Consensus Estimate was 6 cents below the loss per share of $1.24 of the earlier Zacks Consensus Estimate. However, for fiscal 2014, in the last 7 days, the current Zacks Consensus Estimate was 4 cents above the loss per share of 52 cents of the previous Zacks Consensus Estimate.

Earnings Surprises

Research In Motion produced an earnings surprise of 13 cents or 37.14% in the last quarter with an average earnings surprise of a negative 150.48% in the trailing four quarters. There are downside potentials (essentially a proxy for future earning surprises) of 3.45% and 12.5%, respectively, for the ongoing quarter and the next quarter. However, for fiscal 2013, the Zacks Consensus Estimate's downside potential is 0.00% while 2014 contains a downside risk of 8.93%.

Our Recommendation

We maintain our long-term Neutral recommendation for Research In Motion. Currently, it has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

S&P Wary of NYSE-ICE Merger

Immediately after the announcement of the $8.2 billion acquisition of NYSE Euronext Inc. (NYSE:NYX) by IntercontinentalExchange Inc. (NYSE:ICE) last week, Standard & Poor's Ratings Services (S&P) has cast a concerned outlook on the merger, which is expected to culminate by the first half of 2013, subject to the fulfillment of regulatory compliances in the U.S. and Europe. The ratings agency is skeptical about the raised debt amid weak fundamentals.

Accordingly, S&P assigned an issuer credit rating of "A+/A-1" on NYSE. The company has also been kept under the CreditWatch with negative implications. A CreditWatch acts as a red flag and allows a company to monitor its actions before causing a detrimental effect on ratings.

S&P's concern hovers around NYSE's inflated debt position, which the company plans to carry in the merged company as well. Higher debt and lower working capital in the first half of 2012 also impelled the ratings agency to downgrade NYSE's outlook to negative from stable, in August 2012.

Further, with a long-term debt of $2.5 billion at the end of the first nine months of 2012, NYSE bears the brunt of higher borrowing costs, which further constricted the operating margins to about 33% during the same period from 9% in the year-ago period. At present, higher debt and capital expenditure has led NYSE's debt-to-EBITDA ratio to deteriorate to 2.4x at the end of September 2012 from 1.6x at 2011-end, which again underscores ample financial and operating risks.

The rating agency is wary of NYSE's liquid assets, which may hardly cover the operating expenses for three months. At such a juncture when heavy capital expenditure is expected until at least mid-2013, consistent dividends and share buybacks amidst declining operating margins and operating cash flow only augment business risks. Hence, S&P does not expect any rating upgrades over the next two years.

The financial risks from the higher debt obligations do not make this potentially strong merger any less risky.  This is due to the fact that IntercontinentalExchange plans to squeeze all of its cash of $1.0 billion and raise another $1.8 billion from its revolving credit facility. This leaves the combined entity with a debt burden of about $4.7 billion and debt-to-EBITDA ratio of 2.2x, according to the S&P, which remains in a perilous state.

Nevertheless, the ratings agency is optimistic about ICE Clear Europe providing clearing services to NYSE Liffe, as part of the merger. This clearing pact allows NYSE to diminish the cost and risk of building its own clearinghouse in London and mutually benefit from the diverse product portfolio. Moreover, S&P believes that NYSE is making efforts to reduce its debt obligations through refinance and other activities. Even post merger, the joint entity has the potential to improve its operating cash flow and produce cost synergies worth about $300 million by 2014.

However, these actions would take quite a long time given the company's capital and other extraordinary cost requirements of about $150 million in 2013. Hence, a risky financial and operating leverage could also shake investor confidence, and call for an appropriate check and control system instantaneously.

IntercontinentalExchange carries a Zacks #3 Rank, which implies a Hold rating in the short term, while the long-term recommendation remains Neutral. However, NYSE holds a Zacks #4 Rank, which translates into a short-term Sell rating, while the long-term recommendation remains Underperform.

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 Leon Zacks. As a PhD from MIT 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.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

http://www.zacks.com

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Cloud promises the agility required by today’s digital businesses. As organizations adopt cloud based infrastructures and services, their IT resources become increasingly dynamic and hybrid in nature. Managing these require modern IT operations and tools. In his session at 20th Cloud Expo, Raj Sundaram, Senior Principal Product Manager at CA Technologies, will discuss how to modernize your IT operations in order to proactively manage your hybrid cloud and IT environments. He will be sharing bes...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
Regardless of what business you’re in, it’s increasingly a software-driven business. Consumers’ rising expectations for connected digital and physical experiences are driving what some are calling the "Customer Experience Challenge.” In his session at @DevOpsSummit at 20th Cloud Expo, Marco Morales, Director of Global Solutions at CollabNet, will discuss how organizations are increasingly adopting a discipline of Value Stream Mapping to ensure that the software they are producing is poised to o...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point where organizations begin to see maximum value is when they implement tight integration deploying their code to their infrastructure. Success at this level is the last barrier to at-will deployment. Storage, for instance, is more capable than where we read and write data. In his session at @DevOpsSummit at 20th Cloud Expo, Josh Atwell, a Developer Advocate for NetApp, will discuss the role and value...
SYS-CON Events announced today that Outscale, a global pure play Infrastructure as a Service provider and strategic partner of Dassault Systèmes, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2010, Outscale simplifies infrastructure complexities and boosts the business agility of its customers. Outscale delivers a secure, reliable and industrial strength solution for its customers, which in...
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
IBM helps FinTechs and financial services companies build and monetize cognitive-enabled financial services apps quickly and at scale. Hosted on IBM Bluemix, IBM’s platform builds in customer insights, regulatory compliance analytics and security to help reduce development time and testing. In his session at 20th Cloud Expo, Tom Eck, Industry Platforms CTO at IBM Cloud, will discuss how these tools simplify the time-consuming tasks of selection, mapping and data integration, allowing developers ...
In order to meet the rapidly changing demands of today’s customers, companies are continually forced to redefine their business strategies in order to meet these needs, stay relevant and continue to see profitable growth. IoT deployment and development is integral in this transformation, and today businesses are increasingly seeing the value of investing their resources into IoT deployments. These technologies are able increase ROI through projects such as connecting supply chains or enabling sm...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus intern...
Everywhere we turn in our industry we can find strong opinions about the direction, type and nature of cloud’s impact on computing and business. Another word that is used in every context in our industry is “hybrid.” In his session at 20th Cloud Expo, Alvaro Gonzalez, Director of Technical, Partner and Field Marketing at Peak 10, will use a combination of a few conceptual props and some research recently commissioned by Peak 10 to offer a real-world consideration of how the various categories of...
Cloud applications are seeing a deluge of requests to support the exploding advanced analytics market. “Open analytics” is the emerging strategy to deliver that data through an open data access layer, in the cloud, to be directly consumed by external analytics tools and popular programming languages. An increasing number of data engineers and data scientists use a variety of platforms and advanced analytics languages such as SAS, R, Python and Java, as well as frameworks such as Hadoop and Spark...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...