Chicago, IL – November 16, 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: Apple Inc. (AAPL), Microsoft Corp (MSFT), Quality Systems Inc. (QSII), Allscripts-Misys Healthcare Solutions, Inc. (MDRX) and Cerner Corp. (CERN).

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Here are highlights from Friday’s Analyst Blog:

Apple Opens New Store in New York

Apple Inc. (AAPL) will open its newest retail store with an 8,500 square feet retail space in New York tomorrow. The store will help Apple deliver more Macs, iPods and iPhones, taking advantage of the coming holiday season. The new store is the fourth in Manhattan and fifteenth in New York.

To ensure a high-quality buying experience for its products, in which service and education are emphasized, the company has expanded and improved its distribution capabilities by opening its own retail stores in the U.S. and internationally.

The company operates a network of 280 retail stores in 10 countries across the world, including the U.S., U.K., Italy, Australia, Canada, Japan, China, Switzerland, Germany and France to drive the demand for its other products. Further, Apple is soon to open two new stores in Shanghai as well as London and Paris.

The company further plans to open 40 to 50 new larger retail stores next year, about half of which are expected to be outside the U.S. Apple had earlier estimated that it would open 25 to 50 new stores.

Retail sales increased 4.0% to $6.57 billion (averaging $26.0 million per store annually). Store traffic grew to around 170 million in fiscal 2009. The company has extended its footprint in international retail markets. Growing its presence in the international retail market, Apple opened its first store in Sydney and Beijing and opened stores in Switzerland, France and Germany during the calendar year 2008.

Apple's business strategy leverages its ability, through the design and development of its own operating system, hardware and many software applications and technologies, to provide its customers around the world with compelling new products and solutions, superior ease-of-use, seamless integration and innovative industrial design.

To attract customers during the holiday season, the company plans to offer gift-wrapping of any iPod or portable Mac for just $5. It will also allow customers to set aside a gift and pick it up at their local Apple store for free from Dec. 15 to Christmas Eve.

Apple’s stores hosted 42.7 million visitors during the last quarter, an increase of 7% from the year-ago period. The stores posted revenue of $1.87 billion ($7.6 million per store) in the quarter, the highest level ever and up 15% from the year-ago period.

Last month, Microsoft Corp (MSFT) announced the opening of its own first retail store in Arizona. But we do not expect Microsoft to catch up anytime.

Quality Systems Barely Beats

Quality Systems Inc. (QSII) reported fiscal second-quarter earnings of 41 cents, beating the Zacks Consensus Estimate by a penny and the year-ago earnings by 4 cents.

Total revenues for the quarter increased 21.5% to $71.69 million from $58.98 million. The company’s NextGen Healthcare Information Systems division posted revenue of $67.4 million for the reported quarter, representing a 23% increase from the previous year.

Category-wise, System sales, including software, hardware and supplies, increased 5.9% to $26.24 million from $24.78 million. Revenues from maintenance, electronic data interchange (EDI), revenue cycle management (RCM) and other services grew 32.9% to $45.46 million from $34.19 million in the year-ago period.

The total cost of system sales, including software, hardware and supplies increased 16.8% to $7 million. Total cost of maintenance, EDI, RCM and other services for the quarter were $21.27 million as against $15.2 million in the year-ago quarter, up 39.9%. Consequently, total cost of revenues for the quarter increased 33.4% to $28.3 million. The company reported a gross profit of $43.4 million for the quarter opposed to $37.8 million in the year-ago period, up 14.8%.

Research & development spend for the quarter increased 30% to $4.34 million for the quarter. Selling, general and administrative expenses for the reported quarter increased 11.7% to $20.4 million.

Quality Systems exited the quarter with cash and cash equivalents of $75.4 million opposed to cash and cash equivalents of $70.2 million at the end of fiscal 2009.

Quality Systems, headquartered in Irvine, California, develops and markets healthcare information systems that automate certain aspects of medical and dental practices, networks of practices such as physician hospital organizations and management service organizations, ambulatory care centers, community health centers, and medical and dental schools. The company competes with players like Allscripts-Misys Healthcare Solutions, Inc. (MDRX) and Cerner Corp. (CERN).

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Based in Phoenix, Arizona, Avnet is one of the world’s largest distributors of electronic components and computer products. MosChip provides high performance multimedia and connectivity solutions for consumer, industrial and computing applications.

According to the deal, Avnet’s Electronics Marketing unit will distribute MosChip products throughout Asia. The distribution agreement spans Australia, China, India, Korea, Hong Kong, New Zealand, Taiwan and Southeast Asia. MosChip products include Network Appliance Processors and co-processors, audio / video processors, USB and PCI / PCI Express connectivity semiconductors.

Last month, Avnet reported weak fourth-quarter results as its top line remained challenged by adverse business conditions amid the global economic slowdown. The company’s organic growth continues to be lackluster and it continues to expand only through acquisitions.

Although both bookings and billings increased during the period and backlog was up for the first time in several quarters, rival Arrow Electronics (ARW) maintained that the weakness in top line is yet to bottom out and visibility still remains limited. In particular, business conditions in Europe remain challenging.

Management stated that growth in Asia continues to offset sales decline in other regions. Business in Asia is associated with lower selling prices and lower costs. While this might help margins in the short term, it would not be sustainable until Avnet sees some strength in the high-margin Americas and EMEA regions.

Although PMI is licensed in 50 states and operates a subsidiary in Europe, it domiciled in Arizona, meaning its primary insurance regulator is that state's government. Thus, the company will also enjoy this additional flexibility.

Legislators and the DOI recognized that while MPP is a factor, it should not become the sole determinant in evaluating mortgage insurers' ability to write new business. The reform, effective from November, can provide necessary relief to mortgage insurers as they restructure portfolios and rebuild capital levels.

Presently, 16 states have mortgage insurance statutes or regulations that prescribe either a maximum risk-to-capital ratio or MPP. The remaining 34 states do not have explicit minimum capital requirements.

We believe that this guidance to the mortgage insurance industry should enable it to write new business and act as a significant step towards stabilizing the US housing market.

While PMI may benefit from the recent US regulatory moves and positive rating actions taken by Moody’s and S&P in June, we expect continuous losses in the coming quarters till the housing situation bottoms out. Also, the rise in delinquencies and defaults on loan payments may stretch longer than expected, leading to increased losses for mortgage insurers. Thus, we do not expect any significant improvement in its valuation in the near future.

We maintain a Neutral recommendation on the shares of Wells Fargo.

Weyerhaeuser, one of the largest forest-products companies in the world with operations across 10 countries, reported its fourth straight quarterly loss as it continues to reel from the effect of sluggish demand from the housing industry. However, the company feels that the sector is witnessing signs of stabilization after negotiating the worst of headwinds. The Federal Way, Washington-based company’s sales slumped 36% year over year to $1.39 billion.

Revenue from the Timberlands segment fell 7.1% year over year to $208 million, primarily on a slump in log prices and lower harvest levels driven by the collapse of the California housing market. The Wood Products segment slid 44.5% year over year to $594 million as the company slashed capacity amid weak demand for softwood lumber and depressed prices for engineered products.

Sales from Cellulose Fibers dropped 24.1% year over year to $349 million mainly on account of an extensive boiler repair at a facility in Columbus, Mississippi coupled with annual maintenance outages at two other facilities. The Real Estate segment, which operates under Weyerhaeuser Real Estate Co., reported an almost 44% year-over-year decline to $199 million as traffic decreased 33% and home closings dropped by 47%.

Weyerhaeuser reported gross margin of 24.5%, a decline of 570 basis points over the same quarter last year on lower price realizations and sluggish volumes. Meanwhile, the company’s operating loss came in at $62 million, compared to the loss of $404 million in the year-ago quarter. The narrower loss was caused by cost-restructuring initiatives, including job cuts, which led to a 37.8% year-over-year fall in SG&A expenses to $153 million and a substantial 81% drop in impairment of long-lived assets to $53 million.

Weyerhaeuser’s cash and cash equivalents at the end of the quarter was $1.75 billion, an improvement of $92 million over the previous quarter on higher cash from operations and a gain of $29 million from the sale of non-strategic lands in southwest Washington. The cash was primarily utilized for the payment of dividends ($53 million), capital expenditure ($32 million) and repayment of debt ($18 million).

Moving forward, management continues to expect a difficult third quarter despite signs of stabilization. Weyerhaeuser anticipates the Timberlands unit’s performance to deteriorate further on additional deferrals in timber harvest and lower price realizations.

Continued weakness in demand for Wood Products is expected to be partially offset by slight improvement in prices of certain products. Real Estate is also likely to decline further due to a temporary shift to mid-to-lower priced Arizona properties from higher-priced California homes. Cellulose Fibers is the only division that the company sees benefiting from stabilization in pulp prices and lower downtime.

The full-year Zacks Consensus Estimate, derived from 14 covering analysts, is currently pegged at a loss of $2.46 per share, which has worsened by 4 cents in the past month. The most accurate estimate, however, is slightly better at a loss of $2.35 per share.