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HZHI, Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products is Opening the Door to a Multi Million Dollar Industry for Horizon Health International

Dr. Stock Pick — Tue, 24 Nov 2009 17:28:47 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday Nov 24, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK Horizon Health International Corp. Enters Into an Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products, Opening the Door to a Multi Million Dollar Industry NORTH VANCOUVER, BRITISH COLUMBIA–(CRWENEWSWIRE) - HORIZON [...]

Zacks Analyst Blog Highlights: Halliburton Company, Schlumberger Limited, Smith International Inc., National-Oilwell Varco and Weatherford International Ltd. – Press Releases

Zacks Market Commentaries — Tue, 24 Nov 2009 12:10:56 +0000

For Immediate Release

Chicago, IL – November 24, 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: Halliburton Company (HAL), Schlumberger Limited (SLB), Smith International Inc. (SII), National-Oilwell Varco (NOV) and Weatherford International Ltd. (WFT).

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 Monday’s Analyst Blog:

U.S. Rig Count Hits 8-Month High

Producers had scaled back oil and gas drilling operations over the past several months in the midst of falling commodity prices and tighter access to credit. However, during recent weeks, there have been signs that the companies were beginning to bring rigs back on line (especially oil rigs) amid signs of economic stabilization that could drive up energy demand. This pushed the nationwide rig count above 1,100 working units for the week ended Nov. 13, the first time since March.

The overall picture, though, remains weak, particularly for natural gas, whose inventories have recently hit a new record high of 3.83 trillion cubic feet (Tcf) and is threatening to test the maximum capacity of 3.89 Tcf. The supply picture is expected to reverse in the coming months as producers bet on colder weather and the lagging effect of the sharp drop in domestic drilling activity takes hold.

Until then, we believe that natural gas woes (especially in North America) will continue to haunt energy service firms like Halliburton Company (HAL), Schlumberger Limited (SLB), Smith International Inc. (SII), National-Oilwell Varco (NOV) and Weatherford International Ltd. (WFT). These oilfield service names have seen their revenues and earnings plunge in the last few quarters on the back of lower volumes and a very competitive pricing environment. We have Neutral recommendations on all the above-mentioned companies.

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Zacks Investment Research

HZHI, CVAT, PWRM, HCEI, PSFT, TAXS, CSRH, AQNM, Stocks at a Glance. DrStockPick.com Report!

Dr. Stock Pick — Mon, 23 Nov 2009 20:26:57 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday November 23, 2009 DrStockPick.com Stock Report! HZHI CVAT, PWRM, HCEI, PSFT, TAXS, CSRH, AQNM ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK HCEI is well positioned in the market place at the intersection of three mega-billion dollar industries: coffee, wellness and energy drinks, and has quickly established offices [...]

Marathon to Slash Spending – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 19:23:33 +0000

In its investor day meeting, integrated oil major Marathon Oil Corporation (MRO) offered a glimpse of its 2010 production and capital spending plans.

Capital Spending Trimmed

Marathon said that it will prune its capital expenditures by about $1 billion in 2010, as the company allocates a larger percentage of funds towards the Exploration & Production (E&P) segment as against the under-pressure refining business. The Houston-based firm has pegged its 2010 capital budget at about $5 billion, down nearly 7% from the $6 billion it expects to invest by the end of 2009. As per the plan, expenditure on the downstream business (refining, marketing and transportation), which constituted approximately 40% of this year’s budget, will fall to 23%, while the remaining portion will go to exploration and production projects.

Upstream Production Outlook

Marathon’s change in focus to the upstream business can be attributed to plummeting refining profits on the back of weak demand for gasoline, diesel and jet fuel. The company’s new area of emphasis will be deepwater exploration, unconventional resource plays in North America and development in Angola.

Marathon also guided towards 2009 E&P production growth of around 6% from the 2008 level. During the four-year period 2008–2011, the company expects upstream volumes to increase at a compound annual growth rate of approximately 4% (with contributions from new projects in the Gulf of Mexico, Canada's oil sands, Libya and Angola).

In 2010, Marathon plans to drill 3–4 significant wells in the Gulf of Mexico, 2 high-risk, high-potential wells in Indonesia, as well as commence activity in Norway, Libya, Angola and the domestic onshore resource plays.

Outlook

Marathon’s move to chop capital spending follows a similar decision by rival ConocoPhillips (COP), which earlier announced a 12% reduction in its 2010 budget. In contrast, super majors such as ExxonMobil (XOM) and Chevron (CVX) have maintained their capital spending even during the current downturn in an effort to lift production.

We like Marathon’s large and geographically diverse reserve base, competitive downstream operation, and solid project pipeline. However, the uncertain commodity-price environment and the company’s heavy downstream exposure will continue to weigh on Marathon’s revenue and profitability, at least in the near term. As such, we see the stock performing in line with the broader market and rate it as Neutral.
Read the full analyst report on "MRO"
Read the full analyst report on "COP"
Read the full analyst report on "XOM"
Read the full analyst report on "CVX"
Zacks Investment Research

Novellus Raises Guidance – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 18:44:52 +0000

Novellus Systems (NVLS) raised its fourth-quarter revenue and earnings outlook, as a result of the ongoing recovery in the semiconductor market.

The company now expects revenues of $225-245 million, compared to previous guidance of $215-245 million, which raises the mid-point from $230 to $235 million.

Management had previously guided to bookings increase of 25-50%, which were not subsequently revised. Therefore, we assume that bookings are expected to remain within this range.

GAAP gross margin expectations were also not revised and remain in the 44-47% range.

EPS expectations were raised to 25-40 cents from previous guidance of 20-40 cents. The Zacks Consensus Estimate for the fourth quarter is pegged at 31 cents, close to the middle of the revised range.

The company’s third-quarter earnings beat the Zacks Consensus Estimate by a penny. Order momentum, stronger DRAM and NAND prices, higher volumes, higher utilization rates and a lower cost structure contributed to the better-than-expected results.

The computing and smart phone markets drove strength in the third quarter and are expected to drive fourth quarter results as well.

The company generates the largest chunk of revenues from the Asia Pacific region, followed by North America and then Europe. We expect the Asia Pacific region to remain strong in the next quarter, as the strength in DRAM and NAND prices continue. Last quarter, revenues from the region increased double-digits both sequentially and year over year. We also expect improvement in both North America and Europe.

Not only Novellus, but other equipment makers such as ASML Holdings (ASML), Applied Materials (AMAT) and KLA Tencor (KLAC), microprocessor makers such as Intel (INTC) and Advanced Micro Devices (AMD), and analog makers such as Linear Technology (LLTC), Maxim Integrated Products (MXIM), Intersil Corp (ISIL) and Semtech (SMTC) reported stronger results in the last quarter.
Read the full analyst report on "NVLS"
Read the full analyst report on "ASML"
Read the full analyst report on "AMAT"
Read the full analyst report on "KLAC"
Read the full analyst report on "INTC"
Read the full analyst report on "AMD"
Read the full analyst report on "LLTC"
Read the full analyst report on "MXIM"
Read the full analyst report on "ISIL"
Read the full analyst report on "SMTC"
Zacks Investment Research

TAXS, CSRH, DrStockPick.com Stock Report! TaxMasters, Inc. and Consorteum Holdings Inc.

Dr. Stock Pick — Mon, 23 Nov 2009 18:11:38 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday November 23, 2009 DrStockPick.com Stock Report! ************************************************************** CSRH, Consorteum Holdings Inc, CSRH.OB CSRH will build on its extensive expertise within the Payments and Transaction Industry in North America, Europe and Internationally. By identifying new technologies and trends in the changing global marketplace, Consorteum Holdings Inc. aims [...]

Semtech Beats, Acquires SMI – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 14:40:00 +0000

Semtech Corp’s (SMTC) third quarter earnings beat consensus estimates by 6 cents. This follows better-than-expected results reported by the entire peer group, including Maxim Integrated Products (MXIM), Intersil Corporation (ISIL) and Linear Technology (LLTC).

Revenue

Revenue of $75.1 million was up 13.3% sequentially and down 5.7% year over year. The sequential strength was broad-based across all end-markets except industrial and was derived from sequential increases across all product lines except power discrete. The decline from the year-ago period was recession-related.

Asia remained the largest region, with a 61% revenue share. North America was next, representing 23% of total revenue and Europe third, generating the remaining 16%. All three regions witnessed higher demand, with Asia growing 15.2% sequentially, North America growing 4.2% and Europe 20.9%. Both distribution and OEM sales grew in the last quarter, and distributor inventories declined.

Revenue by End Market

All except the industrial end-market saw double-digit sequential growth. The 21.8% and 20.9% increases in the high-end consumer and computing markets, respectively were on account of positive seasonality. The 19.0% sequential increase in communications was driven by strength in infrastructure spending.

The 9.3% sequential decline in industrial was due to weak demand for power discrete products within the military and aerospace segments of the North America region. The advanced communication and sensing product line witnessed the strongest growth, with revenue increasing 27.0% due to momentum at communications infrastructure OEMs.

The power management business grew 20.0%, helped by a more diverse product line and particular strength in high-end consumer and computing applications. Revenue from protection products was up 16.0%, again driven by consumer, communications infrastructure and computing markets. The 31.0% decline in the power discrete business was below management’s expectations, although order rates showed some improvement.

The protection, power management, advanced communication and sensing, and power discrete product lines generated 53%, 24%, 14% and 9% of third quarter revenue, respectively.

Orders

Orders were up strongly in the last quarter and we estimate the book to bill at 1.03. Turns sales increased both sequentially and year over year. We estimate that the backlog increased mid single-digits. Lead times remained short, in the 2-6 week range. Historically, management has always met guided revenue numbers, and in the last quarter revenue exceeded the high end of the guided range. Given the order momentum and backlog growth, we expect the company to meet or exceed guidance in the Jan quarter as well.

Operating Results

The pro forma gross margin for the quarter was 55.4%, up 40 basis points (bps) from the previous quarter’s 55.0%. The gross margin benefited from higher volumes and better product mix. Operating expenses of $24.0 million were higher than the previous quarter’s $2.2 million. The operating margin was 23.4%, up 192 bps from 21.5% recorded in the previous quarter.

The improvement was because of lower SG&A expenses as a percentage of sales, as well as flattish COGS and offset by higher R&D as a percentage of sales. New product development expenses had a significant impact on R&D in the last quarter.

Excluding the impact of restructuring charges, acquisition-related costs, stock compensation expenses and option and restatement related legal expenses on a tax-adjusted basis as well as one-time tax items, the pro forma net income was $16.4 million or 21.9% net margin, compared to $11.8 million or 17.8% in the previous quarter and $16.3 million or 20.5% in the year-ago quarter. Including the special items (-$0.61 per share), the GAAP EPS was -$0.34 compared to $0.12 in the Jul 2009 quarter and $0.19 in the Oct quarter of last year.

Balance Sheet

Inventories were down 4.6%, raising inventory turns from 4.5x to 5.3x. Days sales outstanding (DSOs) decreased from 35 to around 31. The company ended with cash and short term investments of $4.40 per share. Capital additions were $3.8 million in the quarter, netting a free cash flow of $19.5 million.

Guidance

The fourth quarter guidance is for sequential revenue increase of 0-4%, with the GAAP gross margin increasing by up to 40 bps, GAAP R&D of $11.2 million, GAAP SG&A of $ 20 million, interest and other income of $300K, a GAAP tax rate of 14% and a weighted average diluted share count of around 62.2 million. Capital additions are expected to be $10-15 million and depreciation of around $4 million.

Sierra Monolithic Inc. Acquisition

Management announced that the company would be acquiring SMI for $180 million in cash, pick up $8 million of existing unvested stock options standing to the credit of SMI employees and pay out another $12 million in incentives to SMI employees. Transaction costs are currently estimated at around $2.5 million. SMI is expected to generate $15 million in revenue in 2009, which is expected to grow 20-30% in 2010.

The gross margin is expected to be 55-60% (slightly higher than Semtech’s current gross margin). Management also expects the business to require an additional $6-7 million in operating expenses and attract a non-GAAP tax rate of 22-25%. Management expects the business to be accretive to GAAP earnings within the next twelve months.
Read the full analyst report on "SMTC"
Read the full analyst report on "MXIM"
Read the full analyst report on "ISIL"
Read the full analyst report on "LLTC"
Zacks Investment Research

HZHI, Horizon Health International Corp. Enters Into an Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products, Opening the Door to a Multi Million Dollar Industry

Dr. Stock Pick — Mon, 23 Nov 2009 14:36:33 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday Nov 23, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK Horizon Health International Corp. Enters Into an Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products, Opening the Door to a Multi Million Dollar Industry NORTH VANCOUVER, BRITISH COLUMBIA–(CRWENEWSWIRE - Nov [...]

U.S. Rig Count Hits 8-Month High – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 13:20:43 +0000

According to data from Baker Hughes Inc. (BHI), the number of rigs searching for oil and gas in the U.S. rose for the week ended Nov. 20, reflecting ramped-up drilling activity by the producers amid recent optimism about economic recovery.

As shown in the first chart below from Baker Hughes, rigs exploring and producing in the U.S. totaled 1,113 during the week. This is up by 12 from the previous week’s tally and represents the fifth successive weekly gain. The current nationwide rig count is 27% higher from the 2009 low of 876 (set in the week ended June 12).

The combined oil and gas rig count is down by 828 from the year-ago period. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ended Aug. 29 and Sept. 12.

The number of natural gas rigs drilling in the U.S. decreased by 2 to 726 -- the second loss in as many weeks. The rig count remains 55% lower than its peak of 1,606 in late summer 2008. In the year-ago period, there were 1,511 active natural gas rigs. This is shown in the following chart, also from Baker Hughes.

The oil rig count was up by 14 to 375, maintaining the positive momentum from the past nine weeks. But the tally is down approximately 11% from the previous year’s count of 419, as shown in the following chart from Baker Hughes. Oil rigs peaked at 442 in early November last year.

The number of miscellaneous rigs, at 12, remains unchanged from the previous week.

Producers had scaled back oil and gas drilling operations over the past several months in the midst of falling commodity prices and tighter access to credit. However, during recent weeks, there have been signs that the companies were beginning to bring rigs back on line (especially oil rigs) amid signs of economic stabilization that could drive up energy demand. This pushed the nationwide rig count above 1,100 working units for the week ended Nov. 13, the first time since March.

The overall picture, though, remains weak, particularly for natural gas, whose inventories have recently hit a new record high of 3.83 trillion cubic feet (Tcf) and is threatening to test the maximum capacity of 3.89 Tcf. The supply picture is expected to reverse in the coming months as producers bet on colder weather and the lagging effect of the sharp drop in domestic drilling activity takes hold.

Until then, we believe that natural gas woes (especially in North America) will continue to haunt energy service firms like Halliburton Company (HAL), Schlumberger Limited (SLB), Baker Hughes, Smith International Inc. (SII), National-Oilwell Varco (NOV) and Weatherford International Ltd. (WFT). These oilfield service names have seen their revenues and earnings plunge in the last few quarters on the back of lower volumes and a very competitive pricing environment. We have Neutral recommendations on all the above-mentioned companies.

We also maintain our Neutral recommendations for contract drillers such as Nabors Industries (NBR), Patterson-UTI Energy (PTEN) and Helmerich & Payne, Inc. (HP), given the extent of excess capacity in the sector that is expected to weigh on dayrates and margins well into next year.

We are positive on oilfield companies like Cameron International (CAM) that derives about two-thirds of its revenue from outside North America. Cameron’s international operations are expected to be a key growth driver for the firm going forward and will play an offsetting role to the relatively soft U.S. drilling scene.
Read the full analyst report on "BHI"
Read the full analyst report on "HAL"
Read the full analyst report on "SLB"
Read the full analyst report on "SII"
Read the full analyst report on "NOV"
Read the full analyst report on "WFT"
Read the full analyst report on "NBR"
Read the full analyst report on "PTEN"
Read the full analyst report on "HP"
Read the full analyst report on "CAM"
Zacks Investment Research

SEED, CVAT, HZHI, DrStockPick.com Watch List! for Monday Nov 23, 2009, Origin Agritech Limited, Cavitation Technologies Inc. and Horizon Health International Corp.

Dr. Stock Pick — Sun, 22 Nov 2009 23:30:46 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ DrStockPick.com Watch List! My Picks for Monday Nov 23, 2009 are: ************************************************************** SEED, Origin Agritech Limited SEED, a leading agricultural biotechnology company and a top player in seed industry, specializes in research and development, production, sale and distribution of agricultural crop seeds. The Company’s major seed products [...]

CVAT, PWRM, HZHI, HCEI, PSFT, TAXS, CSRH, AQNM, Stocks at a Glance. DrStockPick.com Report!

Dr. Stock Pick — Sun, 22 Nov 2009 19:16:21 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Sunday November 22, 2009 DrStockPick.com Stock Report! CVAT, PWRM, HZHI, HCEI, PSFT, TAXS, CSRH, AQNM ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK HCEI is well positioned in the market place at the intersection of three mega-billion dollar industries: coffee, wellness and energy drinks, and has quickly established offices [...]

Exponential Growth, Finite World – Analyst Blog

Dirk Van Dijk — Fri, 20 Nov 2009 21:27:04 +0000

I want to talk about the challenge of exponential growth in a finite world. This is a concept that while on its surface seems easy to get, most people don’t fully grasp it.

Any growth rate that is positive will lead to a doubling in size eventually -- the higher the growth rate, the quicker the doubling. A quick "back of the envelope" method of figuring it out is known as the rule of 70. If you divide a growth rate into 70, it will roughly give you the time for something to double. Thus if something is growing at 2% a year, then it will double in about 35 years, at 5% only 14 years, etc. If you want to be more precise, you can always use your Y^x button on your calculator, but the rule of 70 will do for this discussion.

Clearly, exponential growth is what we are looking for when we invest -- better known as compound interest -- and it is vital to anyone’s financial health that they stay on the right side of it. People who get on the wrong side -- for example, by carrying a credit card balance -- are eventually headed towards financial oblivion. If that is you, then your best investment is probably not one of the stocks or ETFs that I recommend, it is paying down you damm Visa bill.

It is also why I try to watch the downside when I make investment decisions. It is far more important to avoid 50% losses than it is to have a 50% gain. After all, if you had a 50% gain in one year, but in the next year you suffered a 50% loss, at the end of two years that dollar would have turned into just $0.75 -- a 25% loss.

However, far more important to the world is the dark side of exponential growth. Let's start with the obvious one: population growth. The table below comes from Wikipedia, but is based on UN data. Note that from 1750 to 1800, the world population grew from 791 million to 978 million -- an increase of 187 million, or 0.4% per year. From 1850 to 1900, it grew from 1.262 billion to 1.650 billion -- an increase of 388 million or at 0.53% per year.

Thus, even very small growth rates can result in some very large increases extended long enough, and as the base grows, the absolute increase gets larger each year even if the rate of increase stays the same. Now look at what has happened more recently. From 1950 to 1999, world population increased by 3.457 billion, more than doubling from 2.521 billion, an increase of 1.78% per year. Lately we have seen a slowdown in the growth rate; from 1999 to 2008 it was just 1.29% per year, but that has meant an increase of 729 million in just nine years, or 92% of the entire world population in 1750.

Looking forward, the U.N does see a further reduction in the rate of growth, to just 0.68% per year, or almost back down to the growth rate in the very earliest days of the Industrial Revolution. But the base is so much larger, the absolute increase is 2.2 billion, or almost the world population of 1950. The effect is that a long-term graph of world population looks like a picture of a rocket launch. And unless you believe in the Mayan calendar or the equally silly "end times" nonsense, this is going to cause some very big problems (not that the end of the world in 2012 wouldn't be a very big problem on its own).

Now look at where the growth is coming from. The combined populations of North America (Mexico is included in the Latin American numbers, so basically the US and Canada) and Europe are actually expected to fall from the current 1.069 billion to 1.020 billion. All of the growth is coming from Asia, Africa and Latin America.

The only thing that can keep up with exponential growth is something that itself grows exponentially. Fortunately, the one thing that grows exponentially at a very fast rate is computing power, which in turn allows for technological advances. So far, technology has managed to hold off the worst of the problems that one might expect. After all, this analysis is not exactly original. It was first made by Thomas Malthus back before world population hit the 1 billion mark.

However, you can eat potato chips, not computer chips. One of the things that technology has done is level the playing field, so that people in Asia and eventually Africa will have the same shot at success as people in the U.S. and Europe. They can see how we live, and surprise, surprise -- they would prefer to live the way we do, and are increasingly able to do so. As they do, the economic growth opportunities will be huge.

That is why I like the emerging markets story so much. However, given the challenges of trying to research foreign firms who might be best positioned to take advantage of these trends, it probably makes sense to use ETFs such as the I-shares MSCI Emerging Market Fund (EEM) or more country-specific variants like the Claymore China Small Cap ETF (HAO) or the Wisdom Tree India Earnings ETF (EPI).

One of the things that has been absolutely key to our ability to have so much higher living standards today than back in, say, 1850 is that we use a lot more energy.

So let’s take a look at energy consumption per capita (the data I’m using comes from here if you want to investigate further). In 2005, people in North America used the equivalent of 8157.9 kilograms of oil per year (kgoe/y) per person, up from 7942.9 kgoe/y in 2000. Thus while our rate of increase in energy consumption was just 0.54% per year, it was on a high base so the absolute increase was 215 kgoe/y over that time.

Now look at Asia (excluding the Middle East). In 2000, they were using 865.2 kgoe/y, and by 2005 it was up to 1051.5 per year. That is an increase of 3.98% per year, or to go back to the rule of 70, it means that if it keeps up Asia’s energy consumption per capita will double by 2022. Combine that with a population that is expected to grow at 0.6% per year, and Houston, we have a problem.

However, note that the absolute increase in energy use per capita in Asia was just 186 kgoe/y, or just 86.5% of the increase in North America, despite the far higher growth rate. However, if the relative growth rates continue, that will not last. If we extrapolate out the growth rates of 2000 to 2005 then by 2015, Asia’s per capita consumption will grow to 1,553.0 kgoe/y, an increase of 501.5, while the absolute increase in North America will be "only" 451.4 kgoe/y.

Put another way, right now we use 7.76x as much energy per person as in Asia (keep in mind these figures include relatively rich countries like Japan and South Korea, as well as basket-cases like Burma and Bangladesh), and by 2015 that ratio will fall all the way down to 5.54x as much.

Now, the peak year for actual oil discovery in the world was in 1964, and as you pump oil out of the ground it is gone. Once you reach the point where you have pumped half the original oil in a field, it is basically impossible to increase the annual output from that field without causing serious damage that eventually results in that oil being trapped forever. Most of the currently producing fields are past their peak. As the International Energy Agency (IEA) found last year:

"Output from the world's oilfields is declining faster than previously thought, the IEA said in its annual report. Without extra investment to raise production, the natural annual global crude oil depletion rate is 9.1%. The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as in the North Sea, Russia and Alaska. The effort will become even more acute as prices fall and investment decisions are delayed. Even with investment, the annual rate of output decline is 6.4." (See here for full story.)

Now the situation is better for natural gas (NG) than it is for oil, but eventually that will run out as well. However, we have much more time thanks to the new shale plays here in the U.S. We need to shift to more usage of NG as a bridge towards the eventual goal of producing most of our energy from renewable sources like wind and solar. But given the tiny fraction of the world’s energy they now represent, we will need many years of very fast growth in them to make a substantial dent in world energy needs.

Natural gas also has the benefit of being located here in North America, rather than in rather unstable and hostile areas of the world, the way oil is.

The U.S. cannot continue to run massive trade deficits with the rest of the world. The trade deficit is the source of our external debt, not the fiscal deficit. Our external debt is now (as of 6/30/09) at $13.454 trillion -- up from just $7.744 trillion five years ago. That is a growth rate of 11.7% per year, and is clearly not sustainable (that might be overstating it since it is a gross number; we do hold some debts of other countries that offsets it in part). Still, even if the net growth rate is half that amount, it is clearly unsustainable, and is one of the reasons the dollar is going to be under long-term pressure.

Putting this all together it seems clear to me that the price of energy must continue to rise over the long term. Companies that are going to be able to increase their production of oil, such as Petrobras (PBR) are going to be exceptionally well positioned.

While natural gas should see a big growth in demand, it is not a perfect substitute for oil. Still, big gas producers like EnCana (ECA) have a very bright long-term future. I would also note that what I am saying about oil also holds true for other commodities. Energy and commodities are going to be the real stores of value and of wealth over the next few decades.
Read the full analyst report on "EEM"
Read the full analyst report on "HAO"
Read the full analyst report on "EPI"
Read the full analyst report on "PBR"
Read the full analyst report on "ECA"
Zacks Investment Research

CSRH, TAXS, DrStockPick.com Stock Report! Consorteum Holdings Inc.and TaxMasters, Inc.

Dr. Stock Pick — Fri, 20 Nov 2009 20:45:07 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Friday November 20, 2009 DrStockPick.com Stock Report! ************************************************************** CSRH, Consorteum Holdings Inc, CSRH.OB CSRH will build on its extensive expertise within the Payments and Transaction Industry in North America, Europe and Internationally. By identifying new technologies and trends in the changing global marketplace, Consorteum Holdings Inc. aims [...]

Buffett Borrows for Rail Acquisition – Analyst Blog

Zacks Market Commentaries — Fri, 20 Nov 2009 20:11:51 +0000

Warren Buffett, the CEO and Chairman of Berkshire Hathaway (BRK.A)/(BRK.B), announced on Thursday to borrow $8 billion of loan for the acquisition of Burlington Northern Santa Fe Corporation (BNI). Berkshire Hathaway, which already owns a 22% stake in Burlington Northern, announced earlier this month it would acquire the rest for a total value of $34 billion. Buffet agreed to pay $100 a share in cash and stock to buy the rest of the company.

The $8 billion loan that will be provided by JPMorgan Chase (JPM) and Wells Fargo (WFC) is intended to be paid back in three years’ time.

For Berkshire, the acquisition of Burlington Northern, or BNSF, the second largest railroad, will be its biggest to date. With it, Berkshire is adding a railroad transportation business with its already diverse range of businesses including retail, manufacturing and insurance, as well as several regional electric and gas utilities.

The acquisition is expected to close in early 2010 and is subject to Burlington Northern’s shareholder approval. Post acquisition, Burlington Northern will operate from its headquarters as a wholly owned subsidiary of Berkshire Hathaway.

Based in Fort Worth, Texas, Burlington Northern operates one of the largest railroad networks in North America through its subsidiary, with 33,500 route miles covering 28 U.S. states and two Canadian provinces. This network covers two-thirds of the western United States, stretching from major Pacific Northwest and Southern California. The company employs more than 40,000 people.
Read the full analyst report on "BNI"
Read the full analyst report on "BRK.A"
Read the full analyst report on "BRK.B"
Read the full analyst report on "JPM"
Read the full analyst report on "WFC"
Zacks Investment Research

HZHI, Horizon Health International Aims for Millions in Sales with its E-Commerce System – Now is Developing Two New Websites to Speed Up Online Transactions

Dr. Stock Pick — Fri, 20 Nov 2009 16:49:51 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Friday November 20, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI through its US and Canadian Subsidiaries is servicing all of North America through its E-Commerce System, providing services as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping [...]

DrStockPick.com Stock Report! 11/20/09, WAKE, CSRH, NTRI, ERTS, SOTK, WATG

Dr. Stock Pick — Fri, 20 Nov 2009 15:43:48 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Friday Nov 20, 2009 DrStockPick.com Stock Report! ************************************************************** Consorteum Holdings Inc. (OTCBB: CSRH) launched its consumer stored value rebate card. The consumer rebate card program will offer manufacturers and retailers a new way to process mail-in rebates that ensures increased customer loyalty and decreased [...]

Zacks Analyst Blog Highlights: Toyota Motors, Petroleo Brasileiro S.A., ExxonMobil Corp., Chevron Corp., and Royal Dutch Shell PLC – Press Releases

Zacks Market Commentaries — Fri, 20 Nov 2009 12:26:57 +0000

For Immediate Release

Chicago, IL – November 20, 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: Toyota Motors (TM), Petroleo Brasileiro S.A. (PBR), ExxonMobil Corp. (XOM), Chevron Corp. (CVX) and Royal Dutch Shell PLC (RDS.A).

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:

Toyota’s 1st Sales Gain in 15 Months

Toyota Motors (TM) has posted its first year-over-year monthly sales gain across the globe in 15 months during October. The company’s sales rose 4% to more than 630,000 vehicles. In the U.S., the company’s sales fell 3.5%.

However, in the domestic market Toyota’s sales grew 15% helped by tax breaks for purchases of environment-friendly cars. In China, the company saw a staggering rise of 40% in sales. Toyota returned to profitability in the second quarter of fiscal 2010 ended Sep 30, 2009, after reporting losses since the third quarter of fiscal 2009.

The company posted a profit of ¥21.8 billion ($232 million) or ¥6.96 per share (7 cents) per share. This profit was attributed to government incentive programs across the world – such as the U.S. “Cash for Clunkers"– that helped the company recoup its market share. Consolidated revenue in the quarter dipped 24% to ¥4.54 trillion ($48 billion).

Automotive revenue fell 24% to ¥4.11 trillion ($44 billion) while Financial Services revenue shrank 17% to ¥307 billion ($4 billion). This was on the back of a decline in vehicle sales in each region as well as a negative impact from the appreciation of yen. Sales volume declined 16% to 1.64 million units due to a decrease in volume in all the regions except North America.

Petrobras Profit Exceeds Ests

Brazilian energy giant Petroleo Brasileiro S.A. (PBR), or Petrobras S.A. announced encouraging third quarter results, helped by strong performance from the Supply segment. Earnings per ADR came in at R$1.66 (96 cents), comfortably beating the Zacks Consensus Estimate of 80 cents. However, on a year-over-year basis, Petrobras’ earnings per ADR was down approximately 28.7%, hurt by lower prices of oil and natural gas. Still, they were better than the high double-digit earnings decline suffered by other majors such as ExxonMobil Corp. (XOM), Chevron Corp. (CVX), and Royal Dutch Shell PLC (RDS.A).

Total oil and gas production during the third quarter of 2009 reached 2,534 million oil-equivalent barrels per day, from 2,524 million in the previous quarter and 2,437 million in the same period of 2008. Compared to the third quarter of 2008, Brazilian oil and natural gas liquids production increased 4.8%, while international production was up 24.6%. However, Brazilian natural gas volumes were down 3.3% from the year-ago period, while international output during the quarter was down 6.0% year over year.

During the third quarter of 2009, the average sales price of oil in Brazil decreased 36.4% from the year-earlier period to $64 per barrel. Average sales price of international oil was down 16.9% year-over-year, reaching $57.16 per barrel. Regarding natural gas, average international sales price decreased 21.5% from the third quarter of 2008, while domestic price was down 61.5%.

Refining costs per barrel in Brazil was down 2.6% to $3.37 and internationally, it fell 45.2% to $3.51. Lifting cost per barrel moved down 24.5% in Brazil to $22.86, while overseas costs rose 9.4% to $5.6. Petrobras exported an average of 724,000 barrels of oil per day, 10.2% higher compared to the same period last year.

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Zacks Investment Research

Crane Co. – Growth And Income – Zacks Rank Buy

Alex Kolb — Fri, 20 Nov 2009 05:00:00 +0000

Crane Co. (CR), which boasts an industry-leading yield of 2.7%, recently declared a quarterly dividend of 20 cents per share. The company also posted solid results for the third quarter, raising the lower end of its earnings outlook.

Company Description

Crane Co. manufactures highly engineered industrial products. Founded in 1855, the company provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. Crane's five business segments are: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia.

Solid Income

The company recently declared a quarterly dividend of 20 cents per share, noting that it is payable on December 10 to shareholders of record as of the close of business on November 30.

Crane's dividend yield of 2.7% tops the industry average of 1.6%

A Strong Quarter

The company also posted solid results for the third quarter, raising the lower end of its earnings outlook.

Third-quarter earnings per share of 60 cents surpassed the Zacks Consensus Estimate by 25% and matched the year-prior earnings. Sales of $551 million slipped 14% year-over-year.

Management noted that despite a 14% decline in sales from the third quarter of 2008, operating profit and earnings per share were flat compared to 2008, primarily reflecting the company's success in re-aligning its cost base, adding that operating margin improved by 160 basis points, to 10.1%, compared to 8.5% a year ago.

The company said its $305 million in cash, $300 million revolving bank credit agreement and no near-term debt maturities provide it with a solid financial foundation to continue to manage through the current environment, positioning Crane for growth as end markets recover.

Bullish Estimates and a Surging Share Price

The company upped the lower end of its full-year earnings guidance to a range of $1.90 - $2.05 from $1.75 - $2.05.

Analysts boosted the 2009 Zacks Consensus Estimate to $2.05 per share from last month's $1.90. For the following year, analysts polled by Zacks are projecting earnings of $2.21 per share, versus the previous month's $2.08.

Shares of Crane soared past the market by more than 100% over the past year. Zacks Investment Research

PWRM, HZHI, HCEI, CVAT, PSFT, TAXS, CSRH, AQNM, DrStockPick.com Stock Report!

Dr. Stock Pick — Thu, 19 Nov 2009 21:45:12 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Thursday November 18, 2009 DrStockPick.com Stock Report! PWRM, HZHI, HCEI, CVAT, PSFT, TAXS, CSRH, AQNM ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK HCEI is well positioned in the market place at the intersection of three mega-billion dollar industries: coffee, wellness and energy drinks, and has quickly established offices [...]

HZHI, Horizon Health International is Devoloping Two New Websites to Speed Up Online Transactions

Dr. Stock Pick — Thu, 19 Nov 2009 18:28:58 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Thursday November 19, 2009 DrStockPick.com Stock Report! HZHI, Horizon Health International Corp., HZHI.PK ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK Horizon Health International Corp.-New Websites HORIZON HEALTH INTERNATIONAL CORP. (PINK SHEETS:HZHI) announced its two new websites. HZHI has commenced the development of two new websites to speed up the process [...]

Goodrich to Acquire AIS Global – Analyst Blog

Zacks Market Commentaries — Thu, 19 Nov 2009 14:20:00 +0000

Goodrich Corporation (GR) has signed an agreement to acquire AIS Global Holdings LLC for approximately $375 million. AIS Global also known as Atlantic Inertial Systems is a leading provider of mission-critical guidance, stabilization and navigation products and systems for the military and defense market. The transaction is expected to close by the end of 2009, subject to customary government approvals.

Goodrich expects the company to be accretive to earnings in fiscal 2010. The acquired company mainly caters to defense prime contractors as well as U.S. and allied military forces around the world. Primary products include inertial sensors, inertial measurement units (IMUs), integrated systems, stability systems and terrain avoidance systems for missiles, military aircraft and land systems.

AIS will become part of Goodrich's Sensors and Integrated Systems business within its Electronic Systems segment. The acquisition will boost the Electronic Systems segment, where operating income fell 11% due to lower sales volume and unfavorable product mix in the recently reported third quarter of fiscal 2009.

Fortunes were down due to lower sales of engine controls, aviation airplane spares, and aviation airplane aftermarket sales. The company expects AIS's portfolio of inertial sensors products to complement its guidance, control and navigation systems products. Based in Charlotte, North Carolina, Goodrich is a supplier of components, systems and services to the commercial and general aviation airplane markets.

The company also supplies systems and products to the global defense and space markets. Its businesses including manufacturing, service and sales are carried out in locations throughout the world. The company’s products and services are sold to customers in North America, Europe and Asia .

Goodrich operates through three business segments – Actuation and Landing Systems, Nacelles and Interior Systems, and Electronic Systems.

Actuation and Landing Systems provide components and systems in aircraft used in take-off and landing, wheels and brakes, as well as actuation systems. Nacelles and Interior Systems produce aero-structures, aircraft interiors including lighting and cargo systems, and other services. The third operating segment, Electronic Systems, produces inputs for in-flight monitoring and control and safety data, as well as ice detection, ISR, and launch and missile telemetry systems.
Read the full analyst report on "GR"
Zacks Investment Research

Toyota’s 1st Sales Gain in 15 Months – Analyst Blog

Zacks Market Commentaries — Thu, 19 Nov 2009 14:00:00 +0000

Toyota Motor (TM) has posted its first year-over-year monthly sales gain across the globe in 15 months during October. The company’s sales rose 4% to more than 630,000 vehicles. In the U.S., the company’s sales fell 3.5%.

However, in the domestic market Toyota’s sales grew 15% helped by tax breaks for purchases of environment-friendly cars. In China, the company saw a staggering rise of 40% in sales. Toyota returned to profitability in the second quarter of fiscal 2010 ended Sep 30, 2009, after reporting losses since the third quarter of fiscal 2009.

The company posted a profit of ¥21.8 billion ($232 million) or ¥6.96 per share (7 cents) per share. This profit was attributed to government incentive programs across the world – such as the U.S. “Cash for Clunkers"– that helped the company recoup its market share. Consolidated revenue in the quarter dipped 24% to ¥4.54 trillion ($48 billion).

Automotive revenue fell 24% to ¥4.11 trillion ($44 billion) while Financial Services revenue shrank 17% to ¥307 billion ($4 billion). This was on the back of a decline in vehicle sales in each region as well as a negative impact from the appreciation of yen. Sales volume declined 16% to 1.64 million units due to a decrease in volume in all the regions except North America.

In North America , volume increased by 13,938 units to 250,704 units driven by demand generated by the Clunkers program. Toyota revised its consolidated vehicle sales for the fiscal ending Mar 31, 2010, from 6.6 million to 7.03 million units, an increase of 430,000 units.

This figure reflects the increase in sales due to the success of various incentive programs launched by governments across the world to stimulate demand in the industry as well as sales of the company’s own hybrids and other environment-friendly vehicles. Consequently, consolidated net revenues forecast were upgraded to ¥18 trillion ($191 billion).

However, the company anticipates an operating loss of ¥350 billion ($3.72 billion) and net loss of ¥200 billion ($2.13 billion) for fiscal 2010. These lead us to recommend the shares of the company as Neutral.
Read the full analyst report on "TM"
Zacks Investment Research

HZHI, Horizon Health International Corp.-New Websites

Dr. Stock Pick — Wed, 18 Nov 2009 23:15:50 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday November 18, 2009 DrStockPick.com Stock Report! HZHI, Horizon Health International Corp., HZHI.PK ************************************************************** Horizon Health International Corp.-New Websites NORTH VANCOUVER, BRITISH COLUMBIA–(CRWENEWSWIRE - Nov 18, 2009) - HORIZON HEALTH INTERNATIONAL CORP. (PINK SHEETS:HZHI) (The Company) is pleased to announce its two new websites. The company has commenced the development [...]

CSRH, Consorteum Holdings Inc. Its Consumer Stored Value Rebate Card will Offer Manufacturers and Retailers a New Way to Process Mail-in Rebates

Dr. Stock Pick — Wed, 18 Nov 2009 21:53:52 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Wednesday November 18, 2009 DrStockPick.com Stock Report! CSRH, Consorteum Holdings Inc, CSRH.OB ********************************************************** Consorteum Holdings Inc. Launched Alternative Mail-In Rebate Program for Manufacturers and Retailers Consorteum Holdings Inc. (OTCBB: CSRH) will build on its extensive expertise within the Payments and Transaction Industry in North America, Europe and Internationally. By [...]

A New Audio Interview with Dr. Ingo Stuckmann, CEO and Director of Wind Works Corp., is Now at SmallCapVoice.com

Stuart T. Smith — Wed, 18 Nov 2009 15:12:47 +0000

Nov. 18, 2009 (Business Wire) — SmallCapVoice.com, Inc. announced today that a new audio interview with Wind Works Power Corp. (OTCBB: WWPW) (FRANKFURT: R5E1) (WKN: AOKE72) is now available. The interview can be heard at http://smallcapvoice.com/blog/11-17-09-audio-interview-with-wind-works-power-corp-otcbb-wwpw/. SmallCapVoice.com is a recognized corporate investor relations firm, with clients nationwide, known for its ability to help emerging growth companies [...]

Prieur’s readings (November 18, 2009)

Prieur du Plessis — Wed, 18 Nov 2009 11:06:59 +0000

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy. Please also add the links to any other worthwhile articles you would like to share to the comments section.

PWRM, HZHI, HCEI, CVAT, PSFT, CSRH, AQNM, DrStockPick.com Stock Report!

Dr. Stock Pick — Tue, 17 Nov 2009 22:44:50 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday November 17, 2009 DrStockPick.com Stock Report! PWRM, HZHI, HCEI, CVAT, PSFT, CSRH, AQNM ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK HCEI is well positioned in the market place at the intersection of three mega-billion dollar industries: coffee, wellness and energy drinks, and has quickly established offices in [...]

HZHI, Horizon Health’s E-Commerce System in the Multi-billion Assistive Technology Market

Dr. Stock Pick — Tue, 17 Nov 2009 21:01:07 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday November 17, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI through its US and Canadian Subsidiaries is at present servicing all of North America through its E-Commerce System, as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping [...]

DrStockPick.com Stock Report! 11/17/09, GAMR, PWRM, WOLF, IIIN, AMCS, RLGT

Dr. Stock Pick — Tue, 17 Nov 2009 19:46:14 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Tuesday November 17, 2009 DrStockPick.com Stock Report! ************************************************************** Power3 Medical Products, Inc. (OTCBB: PWRM), a leader in neurodegenerative disease and cancer biomarkers and diagnostic tests, announces further international recognition of validity as the company’s President and CSO, Dr. Ira Goldknopf, will deliver an [...]

Small Cap Voice Featured Company: Wind Works Power Corp. (WWPW.OB)

QualityStocks — Tue, 17 Nov 2009 16:26:23 +0000

Wind Works Power Corp. is on a mission to become a leading developer of wind energy projects in North America. To facilitate this business plan, WWPW has entered into a joint venture agreement and option agreement with Zero Emission People LLC, (“Zero Emission”) an entity controlled by Dr. Ingo Stuckmann, WWPW’s chief executive officer. Zero [...]

Omnicity Corp. (OMCY.OB) Riding the Broadband Wave

QualityStocks — Tue, 17 Nov 2009 15:55:44 +0000

Omnicity Corp., known for bringing wireless broadband services to rural America, is on top of one of the biggest waves in telecommunications, the rapid expansion of broadband services outside of the traditional urban and suburban base areas. It goes without saying that the communications industry is the nervous system of today’s economy, generating global annual [...]

Producer Price Index Tame – Analyst Blog

Dirk Van Dijk — Tue, 17 Nov 2009 15:44:31 +0000

In September, the Producer Price Index rose by 0.3%. While this is an acceleration from the 0.6% decline in September, it is well below consensus expectations of a 0.5% increase.

All of the price pressures were coming from food and energy. If they are stripped out to get the Core Producer Price Index, prices fell by 0.6% for the month -- a much faster decline than the 0.1% decline last month, and even farther below the consensus expectations of a 0.1% increase for the month. Both food and energy rose by 1.6% at the finished level in September.

For energy, though, it was just a partial reversal of the 2.4% decline in September. In September, finished food prices fell only 0.1%. On a year-over-year basis, the total Producer Price Index is down 1.9%. However, last month the year-over-year decline was 4.8%. Thus on a year-over-year basis, the deflationary pressures are abating -- but just think about where we were a year ago!

The finished goods producer price index is the one that gets all the headlines. The core producer price index at the finished level also gets a fair amount of attention. However, the Bureau of Labor Statistics also provides data on what is happening further up the food chain, with data on intermediate and crude goods. To keep the three levels straight in your mind, think Wheat (crude), Flour (intermediate) and Bread (finished).

At those levels, there is some evidence of minor inflationary pressures, but again it is all driven by food and energy costs. At the intermediate level, prices rose 0.3% following a 0.2% increase in September. On a year-over-year basis, prices are down 7.5% at the intermediate level. The huge price declines of a year ago are rolling off.

In September, the year-over-year decline in the intermediate producer price index was 11.7%. Intermediate food prices were down 0.2%, following a 0.5% decline in September. Energy prices rose by 2.3% at the intermediate level -- more than reversing a 2.1% decline in September. Core prices at the intermediate level dropped by 0.2%, following a 0.9% increase in September. Keep in mind price swings tend to be more extreme at the intermediate level than they are at the finished goods level.

Far more extreme, though, are the swings in the crude level producer price index. After all, there is another name for crude goods -- commodities. Overall crude goods rose by 5.4% in October, more than making up for the 2.1% decline in September. Over the last year, prices for crude goods have dropped by 14.1%.

The bulk of that decline, however, came last year as the price of all commodities absolutely collapsed. In October of last year, the crude goods index plunged 16.1% and it was followed by a further 13.1% decline in November. Those will roll off soon, so the year-over-year numbers are going to show much smaller declines. Core crude prices rose by 0.5% in October, on top of a 0.5% rise in September. Crude energy prices rose by 8.3% -- more than offsetting a 5.4% decline in September. Similarly, crude food prices were up 5.2% for the month after having fallen by 1.9% in September.

This report shows that aside from food, and especially energy, there is no real inflation pressure in the economic system. Even looking far up the production chain, price pressures for core goods are very moderate. Thus the Fed should continue to hold down interest rates and be as accommodative as possible. After all, the Fed has two mandates -- price stability and full employment.

With core producer prices falling for two months in a row, and in four of the last six months, price stability would argue for MORE inflation, since we are facing deflation. Yes, the deflationary pressures are less than a year old, but year-over-year declines -- even throwing in food and energy prices of 1.9% -- are a far cry from Weimar Germany, or even the U.S. experience of the 1970’s.

The enemy right now is unemployment, not inflation. It also means that people should just shut the heck up about the decline of the dollar and stop treating it like it's some type of disaster. Yeah, it is sort of bad that a ski trip vacation to Davos, Switzerland will cost a lot more, but hey, maybe it will cause some folks to decide to ski Aspen, instead. Perhaps a few Europeans or Japanese will decide to come vacation in the U.S. since with the low dollar, vacations here are very cheap for them. That would actually create a few jobs in restaurants and hotels here.

More importantly, perhaps companies will decide to buy products made by General Electric (GE) instead of the competing products made by Siemens (SI). We might just start to shrink the yawning trade deficit that is an absolute cancer on the economy.

Talk of the Fed tightening is probably premature by at least a year. Yes, a weaker dollar will mean higher prices for internationally traded goods, most importantly for oil. That, however, would help stimulate more drilling activity, greatly helping the bottom lines for companies like Pride International (PDE) and making the existing reserves of companies like Anadarko (APC) much more valuable. It might just help keep demand for oil down, and accelerate the shift to alternative energy sources, such as wind and solar.

Don’t overlook natural gas as a potential alternative energy source, since we have vast supplies of it here in North America. That would be good news for firms like EnCana (ECA). Yeah, nobody really wants to pay more at the pump, but with other price pressures being kept well at bay, we can afford it -- especially if it leads to more jobs.

Look for the gap between headline and core producer prices to continue to widen, but overall, price pressures are very well contained. This gives the Fed free reign to keep interest rates at extraordinarily low levels for a very extended period of time. And not doing so would be extremely irresponsible.
Read the full analyst report on "GE"
Read the full analyst report on "SI"
Read the full analyst report on "PDE"
Read the full analyst report on "APC"
Read the full analyst report on "ECA"
Zacks Investment Research

HCEI, HZHI, CVAT, PWRM, PSFT, CSRH, AQNM, DrStockPick.com Stock Report!

Dr. Stock Pick — Mon, 16 Nov 2009 21:37:17 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday November 16, 2009 DrStockPick.com Stock Report! HCEI, HZHI, CVAT, PWRM, PSFT, CSRH, AQNM ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK HCEI is well positioned in the market place at the intersection of three mega-billion dollar industries: coffee, wellness and energy drinks, and has quickly established offices in [...]

Upgrading Sealed Air to Outperform – Analyst Blog

Zacks Market Commentaries — Mon, 16 Nov 2009 21:30:39 +0000

Sealed Air Corporation (SEE) recently reported its third quarter results. The company posted earnings of 38 cents per share, beating the Zacks Consensus Estimate 33 cents as well as prior-year EPS of 28 cents.

Through its stringent cost-control measures and global manufacturing strategy, the company managed to offset the impact of lower sales on its earnings. The company’s global manufacturing strategy, along with its cost reduction program, resulted in approximately $20 million in savings during the quarter.

Sealed Air is pursuing a multi-year global manufacturing strategy to revitalize its bottom line. The company plans to build manufacturing plants close to the markets it serves, with the bulk of production being transferred overseas. Under the first phase of this strategy, the company expects to realize cumulative savings of around $45.0 million in 2009 and $55.0 million in 2010.

Apart from its global manufacturing strategy, the company is also focused on managing its overhead costs. The company realized incremental savings of $38 million year-to-date and this program is expected to result in annual savings of at least $50.0 to $60.0 million starting from 2009.

Though the company reported an 11% decline in total sales for the quarter, it witnessed improved market conditions in some of the developing nations. The company’s sales increased in double digits in Russia, Poland and the Ukraine. The company also saw an improvement in the Latin American region during the quarter. Given its global footprint, Sealed Air is well poised for long-term growth, especially in the markets outside North America.

Based on the improved outlook as well as the company’s efforts to revitalize its bottom-line, we are upgrading the rating on the stock from Neutral to Outperform.
Read the full analyst report on "SEE"
Zacks Investment Research

HZHI, Horizon Health International will Post and Sell Its Products on eBay through their Online Shopping Network

Dr. Stock Pick — Mon, 16 Nov 2009 19:16:12 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday November 16, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI through its US and Canadian Subsidiaries is at present servicing all of North America through its E-Commerce System, as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping [...]

Consorteum Holdings, Inc. (CSRH.OB) Sees Itself as Best Solutions Financial Provider

QualityStocks — Mon, 16 Nov 2009 16:16:31 +0000

Consorteum Holdings Inc., a financial transaction solution provider, clearly believes it has the right people, with the right skills, along with more flexible access to the best technologies. In addition, it has extensive relationships within the payments and transaction industry. For all these reasons, the company sees itself as offering customers the best possible solutions [...]

TAXS, CVAT, CSRH, DrStockPick.com Stock Report! TaxMasters Inc., Cavitation Technologies Inc. and Consorteum Holdings Inc.

Dr. Stock Pick — Mon, 16 Nov 2009 15:46:53 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Monday November 16, 2009 DrStockPick.com Stock Report! CVAT, Cavitation Technologies Inc, CVAT.OB CSRH, Consorteum Holdings Inc, CSRH.OB TAXS, TaxMasters Inc., TAXS.OB ************************************************************** TaxMasters, Inc. Managing Growth, Improving Efficiency, Increasing Speed of Service TAXS,the IRS tax relief company, began operational implementation this week of a proprietary system to increase productivity and improve [...]

Bank of Montreal – Value – Zacks Rank Buy

Tracey Ryniec — Mon, 16 Nov 2009 05:00:00 +0000

Bank of Montreal (BMO) is scheduled to report fourth quarter results on Nov 24. After posting 3 earnings surprises in a row, fourth quarter estimates are trending higher by a penny in the last week, rising to 90 cents.

Bank of Montreal, which provides personal, commercial and corporate banking services in North America, reported record revenues in the third quarter. The company saw strong growth in its personal and commercial banking segment. P&C Canada saw net income rise 13% compared with a year ago. Commercial banking saw revenue grow 17%.

Like other banks, Bank of Montreal also saw big gains from its trading segment, which saw net income rise 30% from the year ago period. Corporate banking also improved.

Weakness was still evident in the P&C U.S. segment where revenues fell 0.5% from a year ago. While there was improvement due to gains on the sale of mortgages, there were higher levels of impaired loans.

The company is still allotting for credit losses of $417 million, comprised of $357 million of specific provisions and $60 million in general allowance which is down from the year ago period which saw $484 million allotted, including $434 million in specific provisions.

Value Fundamentals

Bank of Montreal still has attractive value characteristics. It is trading with a forward P/E of 13.04 and has a price-to-book ratio of 1.53. It is rewarding shareholders with a hefty dividend, currently yielding 5.40%. The company is now a Zacks #1 Rank (buy) stock.

Read the Jul 2 article.

Update to Previous Value Zacks Rank Buy Stocks

RPM International Inc. (RPM) recently raised its dividend for the 36th consecutive year. Analysts expect earnings growth of 20.41% in fiscal 2010. Read the full article.

United Stationers Inc. (USTR) has surprised on the Zacks Consensus Estimate 4 consecutive quarters by an average of 28.24% as inventory reduction has boosted the bottom line. The company is trading with a forward P/E of 13.32. Read the full article.

NBTY Inc. (NTY) just posted record results for the fiscal fourth quarter as sales jumped 12%. The company is not only a value stock but analysts expect earnings to grow at 13.75% over the next 5 years. NBTY has a PEG ratio of just 0.90. Read the full article.

Healthspring, Inc. (HS) has surprised on estimates 3 out of the last 4 quarters by an average of 6.45%. The stock is cheap. It trades at just 6.7x forward earnings and has a PEG ratio of 0.67. Read the full article.

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HZHI, HCEI – DrStockPick.com Stocks to Watch!

Dr. Stock Pick — Mon, 16 Nov 2009 01:15:28 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ DrStockPick.com Stocks to Watch! Sunday Nov 15, 2009 ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI, through its US and Canadian Subsidiaries is at present servicing all of North America through its E-Commerce System, as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end [...]

Goodyear Hikes Prices – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 22:26:51 +0000

Goodyear Tire (GT) announced its first price increase in more than a year on the back of higher raw material costs. The company has raised the price of tires sold in North America by 6% on top of a 10% price rise in September last year.

Goodyear has declined to specify the types of raw materials that drove the decision to raise prices. The price increase affects all of Goodyear’s consumer replacement tires as well as dealers and distributors. The company stated the price increases would take effect from Dec 1.

Goodyear failed to impress the investors in its third quarter results. The company posted a net income of $72 million or 30 cents per share in the quarter, which was below the Zacks Consensus Estimate of 47 cents per share. However, earnings improved from the year-ago level of $31 million or 13 cents per share.

Sales for the quarter went down 15% to $4.4 billion. This reflected a 7% decline in unit tire volume due to lower industry demand as well as a $279 million reduction in sales in other tire-related businesses, primarily third-party chemical sales by North American Tire. Unfavorable foreign currency translation further reduced sales by $159 million.

Goodyear is adversely affected by production cuts by original equipment manufacturers due to slow automotive sales. The company projected a fourth-quarter operating loss for its key North American Tire unit. We continue to maintain the recommendation of the shares of the company as Neutral.
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HCEI, CVAT, CSRH, DrStockPick.com Stock Report!

Dr. Stock Pick — Fri, 13 Nov 2009 20:53:13 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Friday November 13, 2009 DrStockPick.com Stock Report! ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK ** Healthy Coffee INTL is well Positioned in the Market Place at the Intersection of Three Mega-billion Dollar Industries: Coffee, Wellness and Energy Drinks HCEI is focused on bringing health to the world’s largest and [...]

Tyco Exceeds Zacks Estimate – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 18:45:15 +0000

Tyco International Ltd. (TYC) reported fourth-quarter earnings per share from continuing operations of 61 cents. This was higher than the Zacks Consensus Estimate of 54 cents per share.

Quarterly Revenues of $4.4 billion declined 16% versus the prior year with an organic revenue decline of 12%. For the largest operating segment, ADT Worldwide, revenues of $1.8 billion declined 9% in the quarter with an organic revenue decline of 5% and a 4% decline due to changes in foreign currency. ADT's recurring revenues grew 4% organically on a global basis. Systems installation and service revenue declined 14% organically, mostly due to weakness in North America and Europe, as a result of continuing lower sales to commercial customers, including the retailer end market.

For Flow Control, revenues of $1 billion declined 15% in the quarter with an organic revenue decline of 10%. Organic revenues declined 7% in the Valves business, 17% in Water and 12% in Thermal Controls. In Fire Protection Services, revenues of $904 million declined 11% in the quarter with an organic revenue decline of 7%. Service revenues declined 5% organically and installation revenues declined 8% driven by continued softness in the North American and EMEA regions. Revenues declined 45% in the Electrical and Metal Products segment and 25% in Safety Products on a year-over-year basis.

Operating income was $226 million in the quarter and the operating margin was 12.6%. Special items of $31 million resulted primarily from restructuring activities. The operating margin before special items improved 160 basis points to 14.3%, as cost-containment initiatives, restructuring activities and growth in ADT's higher-margin recurring revenue business more than offset volume declines.

Cash from operating activities was $985 million in the quarter. The company had free cash flow of $614 million, which included cash payments of $84 million for restructuring and legacy legal matters.

Cash and equivalents were $2.3 billion with long-term debt at $4 billion and shareowners’ equity at $12.9 billion.

The company’s large and growing service revenue base has provided stability and consistency to its performance in 2009 and now represents about 40% of its total revenues. A significant portion of service revenues is contractual recurring revenue in ADT, which grew 4% organically for the year with growth across all geographic regions.

Throughout the year the company was very active in executing cost containment programs, which resulted in charges of about $250 million. These actions, which are expected to provide incremental savings of $175 million in 2010, included staffing reductions as well as the consolidation of both back office operations and manufacturing facilities.

The company anticipates an organic revenue decline of 11% to 13% for the first quarter of 2010. Partially offsetting this decline will be the currency tailwind which is estimated at about 5% of revenue. This brings the total revenue for the quarter to approximately $4.1 billion Tyco expects earnings per share from continuing operations before special items in the first quarter to be between 48 and 50 cents. The Zacks Consensus Estimate is currently 52 cents.

Tyco is a diversified, global company that provides vital products and services to customers around the world. Tyco is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products. Major competitors include General Electric Co. (GE), Honeywell International Inc. (HON) and United Technologies Corp. (UTX).

We currently have an Outperform recommendation on TYCO.

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DrStockPick.com Stock Report! 11/13/09, THC, PSFT, EMC, ERIC, HNSN, KNX

Dr. Stock Pick — Fri, 13 Nov 2009 17:57:54 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Friday November 13, 2009 DrStockPick.com Stock Report! ************************************************************** PowerSafe Technology Corporation (PSFT.PK) subsidiary Amplification Technologies Inc. (www.amplificationtechnologies.com) (ATI), is offering higher performance thermoelectrically cooled discrete amplification single photon counting solid state photodetectors. These photodetectors are mounted on a two stage thermoelectric cooler inside [...]

HZHI, Horizon Health International Corp. Up To Date and CURRENT on all Filing with OTC-PinkSheets

Dr. Stock Pick — Fri, 13 Nov 2009 17:27:42 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Friday November 13, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK Horizon Health International Corp. Up To Date and CURRENT on all Filing with OTC-PinkSheets NORTH VANCOUVER, BRITISH COLUMBIA–(CRWENEWSWIRE - Nov 13, 2009) - HORIZON HEALTH INTERNATIONAL CORP. (PINK SHEETS:HZHI) (The Company) is pleased to [...]

AstraZeneca Beats, Raises – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 14:17:16 +0000

AstraZeneca’s (AZN) third quarter earnings came in at $1.68 per American Depositary Shares (ADS), well above the Zacks Consensus Estimate of $1.36 and $1.32 reported in the year-ago period. Revenues increased 10% at constant exchange rates (CER) to $8.2 billion compared to the same period last year.

The primary reasons for the increase in revenues were strong US sales of Toprol-XL benefiting from generic withdrawal, US sales of its H1N1 vaccine and robust growth in emerging markets.

AstraZeneca recorded strong sales across all geographies. Sales in North America, Emerging Markets and Established Markets increased (at CER) by 13%, 15% and 4%, respectively. The company expects double-digit revenue growth in Emerging Markets for the full year.

Among the product categories, apart from gastrointestinal and oncology, which recorded sales decline of 1% and 10% respectively, all other segments increased their revenues. AstraZeneca recorded more than 26% of its revenues during the quarter from cardiovascular drug sales.

This segment recorded the highest growth at 29%. Revenues for Respiratory and Inflammation, Neuroscience and Infection and others increased by 13%, 11% and 22%, respectively.

AstraZeneca’s gross margin improved to 84.9% from 81.3% in the year-ago period due to a reduction in cost of sales. Operating profit increased 29% to $3.6 billion due to improved gross margin and lower R&D expenditure, partially offset by higher SG&A expenses and less other income.

During the quarter, AstraZeneca received significant regulatory approval and entered into new licensing collaborations. These include:

·         Approval from the US Food and Drug Administration (FDA) for Onglyza (saxagliptin) to be used for the treatment of type 2 diabetes mellitus in adults. In addition, the drug received marketing authorization from the European Commission.

·         Approval from the US FDA for the H1N1 vaccine.

·         Collaboration agreement with Forest Laboratories (FRX) for the development and commercialization of ceftaroline in all major markets other than the U.S., Canada and Japan. The drug is in a late stage of development for the treatment of complicated skin and skin structure infections (cSSSI) and community-acquired bacterial pneumonia (CABP). While Forest expects to file a New Drug Application (NDA) in the US by the end of 2009, AstraZeneca expects to file a Marketing Authorization Application (MAA) in Europe by the end of 2010.

·         An exclusive worldwide license agreement with Nektar Therapeutics (NKTR) for two drug candidates; NKTR-118, a late stage investigational product for the treatment of opioid-induced constipation and NKTR-119, an early stage compound intended to deliver products for the treatment of pain without constipation as its side effect.

·         AstraZeneca submitted a MAA for Brilinta and expects to submit the NDA by the year end.

While all these were positive developments, AstraZeneca has had its share of failures too. The company had to withdraw the regulatory submissions for the use of Zactima (vandetanib) 100mg in combination with chemotherapy in patients with advanced non-small cell lung cancer (NSCLC) from both the US and the EU. The submission was withdrawn due to lack of positive data.

Based on strong quarterly results, AstraZeneca provided guidance for the full year of 2009. The company expects its earnings per ADS in the range of $6.20-$6.40.
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Steel Industry – Industry Outlook

Zacks Market Commentaries — Fri, 13 Nov 2009 05:00:00 +0000

Steel Output Mounting

The Steel industry, which consists of companies engaged in the extraction of iron ore and coke coal for the processing of iron and steel, has the major chunk of sales concentrated with a few producers. The industry includes metal ore exploration and mining services, iron and steel foundries for smelting, rolling, forging, spinning, recycling, stamping, polishing and plating of iron and steel products such as pipes, tubes, wire, spring, rolls and bars.

The largest drivers of steel consumption have historically been the automotive and construction markets, which make up more than 50% of total steel consumption. Other steel consuming industries include appliances, converters, containers, tin, energy, electrical equipment, agricultural, domestic and commercial equipment and industrial machinery. Large automakers such as General Motors, Ford Motor Company ([url=http://www.zacks.com/stock/quote/f]F[/url]), Toyota Motor Corporation ([url=http://www.zacks.com/stock/quote/tm]TM[/url]) and Honda Motor Company ([url=http://www.zacks.com/stock/quote/hmc]HMC[/url]) depend upon the steel industry.

ArcelorMittal ([url=http://www.zacks.com/stock/quote/mt]MT[/url]) is the world’s largest steel company with steel production of 103.3 million tons in 2008. Other major players in the industry are POSCO ([url=http://www.zacks.com/stock/quote/pkx]PKX[/url]), Steel Dynamics Inc. ([url=http://www.zacks.com/stock/quote/stld]STLD[/url]), AK Steel Holding Corporation ([url=http://www.zacks.com/stock/quote/aks]AKS[/url]), United States Steel Corporation ([url=http://www.zacks.com/stock/quote/x]X[/url]) and Nucor Corporation ([url=http://www.zacks.com/stock/quote/nue]NUE[/url]).

The Asia-Pacific region, especially China and India, is witnessing higher production and consumption of steel. This is due to the per capita consumption reaching up to U.S./European levels, which could, theoretically at least, double steel demand in the longer-term. China has set up the largest steel industries in the world, driven by increasing demand for rapid urbanization and large infrastructure projects. The country accounted for nearly 50% of monthly total world production in August 2009.

China’s share is larger than the combined production of the U.S., the European Union (EU), Russia and Japan, which have historically been the largest producers of steel. In 2001, China's annual share of world production stood at 17%, while the EU accounted for the largest share at 18%. In eight years, China's share of world production has almost tripled, while other producers have seen their shares decrease. Ranked behind China are Japan and the U.S.

According to the World Steel Association, global steel output had increased to 107 million tons in the month of September 2009, down marginally (0.6%) from the same month of the previous year. Month-on-month, steel output improved slightly from 106.5 million tons. World crude steel production has continued to show a steady increase since April 2009. Steel production had reached its highest level in July this year on the back of a moderate rise in demand and the resumption of idled facilities by producers. The total output of 103.9 million tons was an improvement of 4% from 99.8 million tons produced in October, but down 11.1% year over year.

All major steel producing countries -- China, Japan, Germany, the U.S., Brazil, Turkey, Russia and the Ukraine -- have shown peak monthly figures so far this year. Production in the Middle East, where demand was buoyant last year due to booming infrastructure spending, edged up by 2.0% in September, while monthly steel output in Asia increased 15% to over 60 million tons. Of this, production in China climbed 28.7% to 39.4 million tons. However, global steel production was down 32.3% in North America while production in Europe saw a drop of 23.7%.

According to the data released by the International Trade Administration, steel prices increased across almost all product groups in September 2009 from August 2009. Hot-rolled sheet prices increased 12.6% to $535 per ton from $475 per ton. Cold-rolled sheet increased 10.04% to $625 per from $568 per ton. Stainless sheet prices increased 2.7% to $2,334 per ton.

Steel prices across all product groups have fallen significantly from the previous year despite recent price increases, with the price of hot-rolled sheet showing a 54.6% decrease and cold-rolled sheet a 41.3% decrease from September 2008.

In 2007, China’s steel industry revealed signs of consolidation in a market that was previously rather fragmented and in need of mergers and acquisitions (M&A). Despite the current slowdown in consolidation within the global steel industry, M&A activity remains a critically important business strategy for companies. While the economic downturn is a significant factor in short-term decisions regarding M&A activity, steel companies expect to make acquisitions over the next three years.

OPPORTUNITIES

We expect global steel demand to improve in the long term with the recovery of the user industries. China is expected to remain the largest consumer of steel going forward. World Steel is forecasting an 8.6% year over year decline in steel production, better than the previous forecast of a 14.1% decline, driven by a strong growth in Chinese steel demand. With signs of a recovery across the world since the beginning of the second half of 2009, the association is anticipating global steel demand in 2010 to grow by 9.2% to 1,206 million tons, which is similar to the level in 2008.

With steel demand picking up in the last couple of months, steel producers are restarting facilities. U.S. Steel Corp. is restarting its blast furnace at its Hamilton, Ontario plant after a nine-month shutdown. The company had closed its Hamilton blast furnace in November 2008. It had suspended the remaining operations at Hamilton and the Nanticoke operation in March 2009 due to a drop in demand. Both the facilities were running at less than half their capacity.

Net losses for Nucor Corporation, the largest recycler of steel scrap in the U.S., narrowed to $29.5 million, or 10 cents per share, for the third quarter of 2009. The result was more positive than the Zacks Consensus Estimate of a loss of 14 cents. Long-term contracts, cost reduction efforts and a dominant acquisition strategy inspire optimism about the company’s performance in the coming quarters.

The third largest steel maker in the U.S., Steel Dynamics Inc. reported net income of $69 million -- 30 cents per share -- for the third quarter of 2009, after reporting losses for three consecutive quarters. The earnings, which were driven by cost reduction through higher production and shipping volumes at the Flat Roll Division and better-than-expected performance in the Metals Recycling segment, were higher than the Zacks Consensus Estimate of 23 cents. However, on a year-over-year basis, earnings were down 69%.

WEAKNESSES

The global steel industry is cyclical, highly competitive and has historically been characterized by overcapacity. Production cuts of up to 35% are occurring to keep operating rates in the low-80s and keep the market balanced. The U.S. domestic production capacity utilization has fallen dramatically since August 2008. Capacity utilization peaked in February 2008 at a level of 91.6%. In May 2009, estimated capacity utilization was 44.3%, less than half of its level six months ago. Capacity utilization reached its lowest point, 40.9%, in December 2008, though it has increased again since May 2009.

Overcapacity in the global steel industry could increase the level of steel imports and result in downward pressure on steel prices. Overcapacity in China has the potential to result in a further increase in imports of low-priced, unfairly traded steel and steel products to the U.S. In recent years, capacity growth in China has significantly exceeded the growth in Chinese market demand. A continuation of this unbalanced growth trend or a significant decrease in China’s rate of economic expansion could result in China increasing steel exports.

Key steel consuming industries such as auto, shipbuilding and construction had been experiencing weak demand in the last quarters, forcing global steel makers to slacken production levels. U.S. Steel, the eighth largest steel producer in the world, the largest integrated steel producer headquartered in North America, and one of the largest integrated flat-rolled producers in Central Europe, slashed production by almost 62% during the second quarter of 2009, while Korean steel maker POSCO cut production by about 15% in December last year. This was the first time in its history that POSCO was forced to take such a measure, proof of the very bad operating environment.

The current low demand from the automotive and residential sectors and rising labor costs are affecting producers in the steel industry. Weak demand and significantly lower operating rates have forced producers to shut down facilities. The slowdown in the U.S./Europe/Japanese economies remains a negative issue facing steel producers. The automotive market has yet to recover fully. Steel shipments are off at a double-digit rate.

As a whole, the steel industry posted weak results in the third quarter of 2009. U.S. Steel Corporation recorded its third sequential loss -- $3.03 billion, or $2.11 per share -- in the third quarter of 2009, in contrast to a net income of $9.19 billion or $7.79 per share in the third quarter of 2008. Commercial metals company AK Steel posted a negligible income of $6.2 million compared to $188.3 million in the same quarter of 2008.

Despite a sharp rise in steel prices in September 2009, the future pricing remains uncertain, and we believe continued demand weakness, production resumption by some mills and lower iron ore and coking coal prices in the second half of 2009 would drive monthly prices down again. The recent significant reduction in global steel production in late 2008 and into 2009 has resulted in decreases in many raw material prices.

We expect that such prices will rebound when global steel production returns to more customary levels. In contrast, prices for steelmaking commodities such as steel scrap, coal, coke, iron ore, zinc, tin and other metallic additions have escalated significantly over the last several years due primarily to growth in worldwide steel production, especially in China.Zacks Investment Research

Applied Beats on Revs and Margins – Analyst Blog

Zacks Market Commentaries — Thu, 12 Nov 2009 20:39:40 +0000

Applied Materials’ (AMAT) fourth quarter earnings beat the Zacks Consensus Estimate by 12 cents. Revenue beat the consensus by 15.6%. All the peer companies -- ASML Holdings (ASML), KLA Tencor (KLAC) and Lam Research (LRCX) -- reported results that also beat the consensus. The general improvement in results is proof of the growing momentum in the semiconductor capital equipment market.

Revenue

Revenue of $1.53 billion was up 34.6% sequentially and down 25.3% year over year. The year-over-year decline in revenue moderated with respect to the three preceding quarters.

Revenue by Segment

All segments contributed to the sequential increase, as well as the year over year decline in revenue.

Silicon Systems (SSG) remains the largest segment, with a 43% revenue revenue share. Segment revenue increased 31.7% sequentially and declined 11.8% year over year. Capacity expansion and technology transitions at foundry customers were the drivers behind the revenue increase in the last quarter. Management stated that utilization rates were also on the rise, which along with stronger DRAM and NAND prices were driving demand at memory and logic manufacturers.

The second largest segment was Applied Global Services (AGS), which generated 26% of total revenue. Segment revenue increased 13.7% sequentially and declined 26.1% year over year. The company saw strength in spares sales, which have been rising steadily over the last two quarters.

Energy and Environmental Systems (EES) was third, with an 18% revenue share, increasing 25.0% sequentially and declining 36.1% year over year. The solar photovoltaic market started looking up in the last quarter, with the pressure on module prices letting up a bit and the broader availability of financing.

The smallest segment, Display, witnessed the strongest sequential growth and year-over-year decline. The segment generated around 13% of revenue, up 189.9% sequentially and down 40.1% year over year. Management stated that demand for TVs and LCD monitors were very strong, especially in China. With utilization rates remaining high and its largest customers returning to profitability, strength in this market should be sustained.

Orders

All segments witnessed sequential increases in orders, although the strongest growth was in EES. Display also increased strong double-digits, followed by SSG and then AGS. However, book-to-bill (BTB) was well below unity in display, indicating that there was not much addition to backlog. AGS and SSG also had BTB below unity. The sharp increase in EES orders resulted in a BTB of 1.28, indicating continued strength in the next quarter.

The sequntial increase in orders came from Korea, South East Asia & China and North America, in that order. Other regions declined, with particular weakness in Europe.

Operating Margin

Gross margin for the quarter was 38.1%, up 745 basis points (bps) from the previous quarter’s 30.6%. The gross margin improvement was due to a better mix of business, as the higher-margin businesses performed relatively better. The gross margin was down 273 bps from the year-ago quarter, mainly due to lower volumes.

The operating expenses of $358.5 million were flattish in comparison to the previous quarter’s $358.7 million. However, the operating margin expanded 1,560 bps sequentially and declined 322 bps year over year. The sequential improvement was primarily attributable to the higher gross margin, although lower R&D also declined significantly as a pecentage of sales. Lower G&A and S&M ( as a percentage of sales) also contributed.

SSG operating margin improved 1,284 bps, AGS improved 941 bps, Display 2,875 bps and EES 1,295 bps.

Net Margin

On a pro forma basis, AMAT had a net income of $207.5 million, or a 13.6% net income margin, compared to a loss of $1.6 million, or 0.1% in the previous quarter and profit of $293.4 million, or 14.4%, in the fourth quarter of last year.

Fully diluted pro forma earnings per share (EPS) were $0.15 compared to $0.00 in the Jul 2009 quarter and $0.22 in the comparable prior-year quarter. Our pro forma estimate excludes restructuring charges, acquisition-related charges, stock-based compensation expenses and impairment of investments on a tax-adjusted basis in the last quarter. Our pro forma estimate may not match management’s presentation due to the addition/exclusion of some items not considered by management.

On a fully diluted GAAP basis, the company recorded a net income of $137.9 million ($0.10 per share) compared to a loss of $54.9 million (-$0.04 per share) in the previous quarter and a net profit of $231.1 million ($0.17 per share) in the prior-year quarter.

Balance Sheet

Inventories were down 6.9% sequentially, with inventory turns increasing from 1.8x to 2.3x. Days sales outstanding (DSOs) were around 62 days, down from 67 days at the end of the Jul quarter. The cash and short-term investments balance was $2.21 billion at quarter-end, up $76.1 million during the quarter. The company generated $240.6 million of cash from operations and spent $80.5 million on dividends. At quarter-end, Applied Materials had $200.6 million of debt on its balance sheet, or a net cash position of $2.01 billion.

Guidance

Management provided guidance for the first quarter. Accordingly, revenue is expected to increase 10-25%, with SSG growing 20%, AGS growing modestly, display down and EES up more than 20%. The tax rate is expected to be around 29%. Including restructuring charges of 6-7 cents a share, the GAAP EPS is expected to be 4-8 cents a share.
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TOTAL Tops Zacks Estimate – Analyst Blog

Zacks Market Commentaries — Thu, 12 Nov 2009 20:30:40 +0000

TOTAL SA (TOT) reported third-quarter earnings of €0.84 per share ($1.20 per share), above the Zacks Consensus Estimate of $1.12 and second-quarter profit of €0.77. However, earnings declined from €1.81 reported a year ago. Earnings improved sequentially based on higher production, better realizations and lower costs.

Total revenues declined 31% from the year-ago quarter but improved 7% sequentially to €33.6 billion. The decline was caused mainly by lower realized oil and gas prices in the Upstream segment, reduced throughput volumes in the Downstream segment and a revenue decline at the chemicals segment.

Total hydrocarbon production averaged 2,243 thousand barrels of oil equivalent (MBOE) per day, up 0.5% from last year and 2.8% from the previous quarter. The increase was mainly due to production improvements and start-ups of new fields; offset by OPEC reductions and lower gas demand, disruptions in Nigeria, and changes in portfolio essentially in Venezuela and Libya.

Liquids and gas production averaged 1,379 thousand barrels (MBbls) per day (down 2%) and 4,726 thousand cubic feet (Mcf) per day, respectively. Realized hydrocarbon prices declined 40% year over year in the quarter, with liquids and gas realizations down 40% and 39%, respectively. However, total hydrocarbon realizations improved 15% sequentially.

Total refinery throughput was 2,142 MBbls per day, down 10% year over year and 2% sequentially, driven by scheduled refinery turnarounds and voluntary throughput reductions to adjust to the economic environment. Crude and other feedstock based utilization rates in the quarter declined to 82% from 92% last year.

Chemicals revenues declined 28% from the year ago quarter to €3.9 billion, driven by weaker chemicals demand in Europe and North America, offset by improved margins for petrochemicals.

In the reported quarter, TOTAL generated net cash flow of $3 billion and reduced its net debt-to-equity ratio to 21% from 25% at the end of the previous quarter. Net investments declined 12% from last year to $3,503 million, including acquisitions worth $83 million (down 87%) and asset sales of $1,004 million (up 27%). At quarter-end, TOTAL had €13,775 million of cash and cash equivalents.
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CVAT, CSRH, DrStockPick.com Stock Report! Cavitation Technologies Inc. and Consorteum Holdings Inc.

Dr. Stock Pick — Thu, 12 Nov 2009 19:57:03 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Thursday November 12, 2009 DrStockPick.com Stock Report! CVAT, Cavitation Technologies Inc, CVAT.OB CSRH, Consorteum Holdings Inc, CSRH.OB ************************************************************** CTI Enters Into Strategic Alliance With Agri Process Innovations, Inc. for CTI Nano-Cavitation Process Systems. Cavitation Technologies, Inc. (CTI); (OTCBB: CVAT) is a “Green-Tech” company, established in 2006 to become a world [...]

Ciena Takes NT’s Ethernet Business – Analyst Blog

Zacks Market Commentaries — Thu, 12 Nov 2009 17:00:53 +0000

The telecommunication and network specialist, Ciena Corporation (CIEN) announced that it has received regulatory approval for the proposed acquisition of substantially all of Nortel Network Corp.'s (NT) optical and Ethernet division.

The company has been granted termination of the waiting period under the Hart-Scott Rodino Act in the United States. The Canadian Competition Bureau has also approved the takeover.

Ciena plans to acquire substantially all of the optical networking and carrier Ethernet assets of its rival Nortel Networks’ Metro Ethernet Networks (MEN) division, for a total of $521 million ($390 million in cash and 10 million in shares worth $142 million based on the Oct. 15 market price).

However, the deal also requires the approval of the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice. Nortel had filed for bankruptcy in January.

The deal is still subject to a competitive bidding process scheduled for Nov. 13. Recently, according to a Bloomberg report, it appears that Nokia Siemens Networks, a joint venture between Nokia (NOK) and Siemens AG (SI) may bid for Nortel’s Ethernet business, which could enable it to expand its own Ethernet business in North America.

With a market capitalization of $1.12 billion, we expect Ciena to clinch the deal, which would help the company’s Carrier Ethernet platform differentiate and provide a competitive advantage against larger players such as Alcatel-Lucent (ALU), Cisco Systems (CSCO) and Tellabs (TLAB).

We believe that the deal will provide strong growth potential to Ciena’s rapidly expanding metro Ethernet business and optical networking products. The Nortel deal would be the largest ever for Ciena and would also help it expand geographically.

While the Nortel acquisition will boost revenue grow, integration risk will be something to consider. We have a Neutral rating on the stock.
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Hewitt Tops on Lower Revenue – Analyst Blog

Zacks Market Commentaries — Thu, 12 Nov 2009 16:45:42 +0000

Hewitt Associates Inc. (HEW) reported fourth quarter 2009 EPS of 68 cents per share, exceeding the Zacks Consensus Estimate of 63 cents per share.

Revenue
Revenue of $757.7 million was down 6.0% from $806.7 million reported in the year-ago quarter. This revenue decline may be attributed to lower revenue across all its segments, except the benefits outsourcing division. Excluding third party supplier revenue, $16.9 million of unfavorable foreign currency translation, $6.8 million contribution from an acquisition in the quarter and a $9.4 million contribution from the HR BPO business in the prior-year quarter, net revenue declined 4.0%.

Revenue Segments
The Benefits Outsourcing segment revenue for the quarter was $388.7 million, flat compared with $387.9 million in the prior-year quarter. Revenue was up 1% after adjusting for $2.3 million of unfavorable foreign currency translation. Revenue growth on an adjusted basis was principally driven by growth in large-market and mid-market clients, offset to a certain extent by lower project revenue.

The Human Resource Business Process Outsourcing segment reported revenue of $113.9 million, down 16.0% compared to $135.1 million in the prior-year quarter. Revenue decreased 10% after excluding third-party supplier revenues in both periods and adjusting for $2.3 million of unfavorable foreign currency translation and $9.4 million comparable contribution from divested businesses.

The Consulting segment revenue was $265.2 million, down 10% compared with $295.8 million in the prior-year quarter. Consulting revenues declined 9% after adjusting for $12.3 million of unfavorable foreign currency translation and a $6.8 million contribution from an acquisition, both in the current year. Revenue in this segment declined as a result of Talent and Organizational Consulting services across all regions and in Communication and Health Management services in North America. This was partially offset by growth in Retirement and Financial Management services in North America and Europe.

Operating Results
Operating income for the quarter was $105.8 million, up 95% compared to $54.3 million in the prior-year quarter. Reported operating margin was 14.0%, compared with 6.7% in the prior-year quarter. Operating margin improved as a result of lower performance-based compensation, staffing leverage, and lower selling, general and administrative expenses.

Net income for the quarter was $64.4 million, or $0.68 per diluted share, up from $31.6 million or $0.32 per diluted share in the prior-year quarter. Underlying net income (after excluding unusual items) for the quarter was $64.4 million or $0.68 per share, compared to $48.3 million, or $0.49 per diluted share in the year-ago quarter.

Balance Sheet & Share Repurchase
The company exited the quarter with cash, cash equivalents and short term investments of $642.6 million. Debt and capital lease obligations (including current portion) for the quarter was $654.84 million. During the recently concluded quarter the company repurchased 1.0 million of its outstanding common shares at an average price of $30.19 per share, or a total cost of $30.1 million.

Fiscal Year 2009 Result
For the full year 2009, net revenue was $3.00 billion, down 5.0% compared with $3.15 billion in the prior year. Net revenues were flat after adjusting for foreign currency translation, acquisitions and divestitures, HR Business Process Outsourcing (HR BPO) contract restructurings in the prior year and third-party revenues. Reported operating income for the full year grew to $434.1 million, up 39% compared with $312.8 million in the prior year. The company reported net income of $265.1 million, or $2.78 per diluted share, up from $188.1 million, or $1.85 per diluted share in the prior year.

For fiscal year 2009, the company generated operating cash flow of $433.0 million, compared with $327.9 million in the prior year. Free cash flow for the year on a non-GAAP basis calculated as cash flow from operations less capital expenditures and capitalized software costs, was $305.1 million, compared with $210.3 million in the prior year. The improvement in free cash flow can be attributed to improved receivables collections and stronger operating performance, partially offset by lower outsourcing net deferrals and higher performance-based compensation related to fiscal 2008 performance.

Guidance
For the fiscal year 2010, the company expects low to mid single-digit net revenue growth, with good growth in consulting, flattish outsourcing and a decline in HR BPO. Diluted earnings per share are expected to be in the range of $2.85 to $2.95.
Read the full analyst report on "HEW"
Zacks Investment Research

Muscle Flex, Inc. (MFLI.PK) CEO Chosen to Participate on the American Music Award’s Pre-Show November 22, 2009

QualityStocks — Thu, 12 Nov 2009 16:25:00 +0000

Muscle Flex Inc. announced early this morning that its CEO, Danny Alex, will participate live on the American Music Awards online pre-show on November 22, 2009. Muscle Flex brands will be referenced during his segments which will focus on fitness and lifestyle. According to the press release, the introduction was made by Muscle Flex’s marketing [...]

HZHI, Horizon Health International Receives eBay Vendor Status as Part of its Product Awareness Campaign

Dr. Stock Pick — Thu, 12 Nov 2009 15:17:23 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Thursday November 12, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK Horizon Health International Receives eBay Vendor Status as Part of its Product Awareness Campaign NORTH VANCOUVER, BRITISH COLUMBIA–(CRWENEWSWIRE) Nov 12, 2009 - HORIZON HEALTH INTERNATIONAL CORP. (PINK SHEETS:HZHI - News), (The Company) is pleased [...]

HZHI, Horizon Health’s E-Commerce System on the MULTI-BILLION Assistive Technology Market

Dr. Stock Pick — Thu, 12 Nov 2009 14:49:09 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Thursday November 12, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI, Horizon Health’s E-Commerce System on the MULTI-BILLION Assistive Technology Market HZHI through its US and Canadian Subsidiaries is servicing all of North America through its E-Commerce System, providing services as a ‘Home, Office [...]

Green Investor News – GE (NYSE: GE) and E.ON Sign Major OM Deal for U.S. Wind Turbines

Dawn Van Zant — Thu, 12 Nov 2009 13:00:00 +0000

SCHENECTADY, N.Y. - November 12, 2009 - GE (NYSE: GE) and E.ON Climate Renewables (ECR) North America have signed a seven-year operation and maintenance (OM) agreement

CSRH, CVAT, DrStockPick.com Stock Report! Consorteum Holdings Inc. and Cavitation Technologies Inc.

Dr. Stock Pick — Wed, 11 Nov 2009 22:43:52 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Wednesday November 11, 2009 DrStockPick.com Stock Report! CVAT, Cavitation Technologies Inc, CVAT.OB CSRH, Consorteum Holdings Inc, CSRH.OB ************************************************************** CTI Enters Into Strategic Alliance With Agri Process Innovations, Inc. for CTI Nano-Cavitation Process Systems. Cavitation Technologies, Inc. (CTI); (OTCBB: CVAT) is a “Green-Tech” company, established in 2006 to become a world [...]

ArvinMeritor’s Loss Deepens – Analyst Blog

Zacks Market Commentaries — Wed, 11 Nov 2009 22:14:36 +0000

ArvinMeritor (ARM) showed a loss of $20 million or 28 cents per share, before special items, in the fourth quarter of its fiscal year ended Sep 30, 2009. This is wider than the quarter-ago loss of 25 cents per share and compared to year-ago profit of $26 million or 35 cents per share.

The loss was attributed to incremental tax expenses during the quarter due to the inability to recognize the tax benefit of losses in certain countries. However, the loss was narrower than the Zacks Consensus Estimate of 32 cents per share.

Sales in the quarter totaled $984 million, a decline of 36% from the year-ago level of $1.5 billion. This was driven by continued weakness across the global markets. However, sales increased by 4% compared to the previous quarter of fiscal year 2009 due to improved conditions in global markets, particularly in China, India and Brazil.

Cost Reductions

ArvinMeritor achieved cost savings of $195 million in fiscal 2009, exceeding the target of $125 million under its Performance Plus plan. The cost savings were helped by layoffs and temporary salary reductions, curtailment in capital spending, extended manufacturing shutdowns, elimination of training programs, suspension of the quarterly dividend and elimination of all non-critical discretionary spending.

The company also announced the closure of its assembly, machining and casting facility in Carrollton, Kentucky and the braking systems facility in Tilbury, Ontario, Canada.

Divestitures

ArvinMeritor completed the sale of its entire ownership interest in Gabriel de Venezuela and Meritor Suspension Systems Company joint ventures, Wheels business and Gabriel Ride Control Products in North America.

These transactions largely completed the divestiture of Chassis Systems business under the company’s Light Vehicle Systems (LVS) business segment. The divestments reduced the company's overall light vehicle business to 25% of total sales at the end of its fiscal year.

Business Segments Redefined

ArvinMeritor redefined its reporting segments following the recent divestiture of most of its LVS businesses. For continuing operations, the company has informed that it will report results as defined within Commercial Truck, Industrial, Aftermarket & Trailer and Light Vehicle Systems. Of these four segments, the first three have been considered core to the company.

Financial Position

ArvinMeritor had cash and cash equivalents of $95 million as of Sep 30, 2009. Long-term debt amounted to $1.1 billion as of that date. The company had a shareholder deficit of $1.3 billion as of the same period.

Free cash flow was $22 million in the fourth quarter compared to $103 million in the prior fiscal year quarter. The company had $95 million in cash balance and an unutilized commitment of $611 million under its revolving credit facility as of Sep 30, 2009.

In fiscal 2009, ArvinMeritor had a net cash outflow of $295 million from operating activities, in sharp contrast to an inflow of $163 million in the previous fiscal year. Meanwhile, capital expenditure reduced to $111 million from $138 million in fiscal 2008.

Looking Ahead

In the upcoming fiscal year, ArvinMeritor expects revenue to be higher and free cash flow to breakeven. In addition, the company expects capital expenditures in the range of $90 million to $110 million.

Despite its efficient cost management and commendable global footprint, we believe difficult market conditions across the global automotive markets will continue to adversely affect the company. This has led us to maintain our Neutral recommendation for the stock.
Read the full analyst report on "ARM"
Zacks Investment Research

Wind Works Power Corp. Signs Option to Acquire 100% Interest in 50MW Wind Energy Project in Hungary

Stuart T. Smith — Wed, 11 Nov 2009 21:07:38 +0000

OTTAWA, ONTARIO — (Marketwire) — 11/11/09 — Wind Works Power Corp. (OTCBB: WWPW)(FRANKFURT: R5E1)(WKN: AOKE72) is pleased to announce that they have signed an option agreement to acquire a 100% interest in Ecsed, a 50 megawatt wind energy project located in Hungary. In consideration for the 100% interest, Wind Works will make an initial cash [...]

Wind Works Power Corp. (WWPW.OB) to Acquire 50MW Wind Energy Project in Hungary

QualityStocks — Wed, 11 Nov 2009 18:27:20 +0000

Canadian-based Wind Works Power Corp. announced today that they have signed an option agreement to acquire a 100% interest in Ecsed, a 50 megawatt wind energy project in Hungary, for $500,000. This transaction followed on the heels of another announcement Monday in which the company announced they signed an option agreement to acquire a 100% [...]

HZHI, Horizon Health International Corp., will be Entering into Discussions with all 70 franchisees of MediChair Corporate to License its Website

Dr. Stock Pick — Wed, 11 Nov 2009 17:21:13 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday November 11, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI through its US and Canadian Subsidiaries is servicing all of North America through its E-Commerce System, providing services as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping experience [...]

SOPW, HZHI, BOCL, DrStockPick.com Watch List! for Wednesday November 11, 2009, Solar Power, Inc., Bio-Clean Inc. and Horizon Health International Corp.

Dr. Stock Pick — Wed, 11 Nov 2009 03:22:24 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ DrStockPick.com Watch List! My Picks for Wednesday November 11, 2009 are: ************************************************************** SOPW, Solar Power, Inc., SOPW.OB SOPW is a vertically integrated solar energy solution provider offering the North American commercial and public sector building markets a complete solution through a single brand. Throughout Europe, Asia and Australia [...]

CSRH, Consorteum Holdings Inc. Its Consumer Stored Value Rebate Card will Offer Manufacturers and Retailers a New Way to Process Mail-in Rebates

Dr. Stock Pick — Tue, 10 Nov 2009 22:50:40 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Tuesday November 10, 2009 DrStockPick.com Stock Report! CSRH, Consorteum Holdings Inc, CSRH.OB ********************************************************** Consorteum Holdings Inc. Launched Alternative Mail-In Rebate Program for Manufacturers and Retailers Consorteum Holdings Inc. (OTCBB: CSRH) will build on its extensive expertise within the Payments and Transaction Industry in North America, Europe and Internationally. By [...]

PWRM, TEVA, DrStockPick.com Stock Report! Power 3 Medical Products Inc. and Teva Pharmaceutical Industries Ltd.

Dr. Stock Pick — Tue, 10 Nov 2009 21:02:31 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday November 10, 2009 DrStockPick.com Stock Report! PWRM, TEVA ************************************************************** PWRM, Power 3 Medical Products Inc, PWRM.OB Power3 Medical Products, Inc. is a leading bio-medical company engaged in the commercialization of neurodegenerative disease and cancer biomarkers, pathways, and mechanisms of diseases through the development of diagnostic tests and drug [...]

TRW Posts Robust Profit – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 20:37:48 +0000

TRW Automotive (TRW) has revealed a staggering rise in profits to $76 million or 68 cents per share in the third quarter ended Oct. 2, 2009, from a net loss of $22 million or 22 cents per share in the prior-year quarter.

The profit was also significantly higher than the Zacks Consensus Estimate of 14 cents per share. The Michigan-based manufacturer of advanced technology products and services for the automotive markets commended its restructuring and cost containment actions for its impressive rise in profit.

Operating income for the quarter went up to $165 million from $44 million in the prior-year period. Apart from restructuring and cost containment actions, this was driven by lower raw material prices and favorable non-recurring supplier and customer settlements.

During the quarter, TRW continued to reduce its salaried workforce by an additional 200 employees, which brings the total salaried reductions to about 3,000 since the commencement of programs last year.

However, sales of $3.1 billion, a decline of 13.5%, were adversely affected by lower sales in most geographic regions resulting from reduced vehicle production volumes. This apart, currency movements also had a negative impact on sales.

Financial Position

TRW had cash and cash equivalents of $474 million as of Oct. 2, 2009, a decline from $756 million a year ago. Long-term debt amounted to $2.5 billion as on that date. This reflected a long-term debt to capitalization ratio of 60%.

In the nine months ended Oct. 2, 2009, TRW had a net cash outflow of $57 million from operating activities compared to an inflow of $4 million in the year-ago period. The decline in cash position was attributed to lower operating income, partially offset by lower working capital requirements. Capital expenditures reduced to $121 million from $338 million in 2008. The company had free cash outflow of $178 million in the above period compared to $334 million in the prior-year period.

Road Ahead

TRW anticipates full-year production to gross 8.6 million units in North America and 16.3 million units in Europe. Based on these revisions and the expectations for foreign currency exchange rates, full-year sales are expected to be $11.4 billion, a bit higher than the Zacks Consensus Estimate of $11.1 billion.

We believe TRW’s innovative product portfolio is capable of generating top- and bottom-line growth. It has been successful in its restructuring and cost-containment actions to mitigate the impact of the industry-wide downturn as reflected in the better-than-expected third-quarter results. However, the company still needs to go through the long and gradual process of recovery in the industry. Due to these factors, we recommend the shares of the company as Neutral.
Read the full analyst report on "TRW"
Zacks Investment Research

Flowserve Beats Zacks Consensus – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 19:22:07 +0000

Flowserve Corporation (FLS) announced third quarter 2009 fully diluted EPS of $2.07, up 3 cents or 1%, including realignment charges of 5 cents per share. This was higher than the Zacks Consensus Estimate of $2.00 per share.

Bookings for the quarter were $975 million, down 29%, or 26% excluding negative currency effects of $37 million. Sales for the quarter were $1.05 billion, down 9%, or 5% excluding negative currency effects of $47 million.

Gross margin increased 150 basis points to 36.6%, including realignment charges of 20 basis points. Flowserve also posted a quarterly operating margin of 15.3%, including charges totaling 110 basis points. Backlog, which represents unexecuted orders, was $2.66 billion, including positive currency effects of $90 million, when compared to $2.83 billion of backlog at Dec 31, 2008.

In the pump division, bookings of original equipment decreased approximately 60%, which represents most of the total decrease. This original equipment decrease was driven by a decline across all industries, primarily the chemical, oil and gas and general industries markets.

In the flow control division, bookings decrease was generally attributable to a weakness in the chemical and general industries markets in Europe, Middle East and Africa and Asia-Pacific, partially offset by nuclear orders in North America. Large project awards were delayed as customers reviewed demand, pricing and other savings opportunities.

In flow solutions division, bookings decrease was primarily attributable to decreased original equipment. The decrease in sales was driven by sales declines in all regions. Reductions in project sales shifted the sales mix toward aftermarket business with a related beneficial impact on gross margin.

Cash and equivalents were $291 million, long-term debt was $541 million and shareowner’s equity was $1.7 billion.

Flowserve Corporation develops, manufactures and sells precision-engineered flow control equipment, besides providing a range of aftermarket equipment services. The company operates in three divisions: Flowserve Pump, Flow Control and Flow Solutions. The company sells its products through direct sales force as well as through distributors and sales representatives. Major competitor is ITT Corporation (ITT).
Read the full analyst report on "FLS"
Read the full analyst report on "ITT"
Zacks Investment Research

Xcellink International, Inc. (XCEL.OB) Signs Agreement with 3i Infotech for iPhone Integration

QualityStocks — Tue, 10 Nov 2009 17:51:47 +0000

Xcellink International Inc. is a developer of patented mobile payments and banking platforms. The company’s unique process enables customers, rather than the merchants, to initiate, control and pay for all transactions without the need for any type of cards (credit, debit, etc.) in real-time anywhere, anytime and at a fraction of the cost of current [...]

Talisman Net Slumps on Lower Prices – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 16:56:22 +0000

Canadian energy explorer Talisman Energy Inc. (TLM) reported marginally better-than-expected third quarter results, helped by in-line production volumes. Earnings per share from continuing operations, excluding one-time items came in at 15 Canadian cents (14 cents), a penny above the Zacks Consensus Estimate. However, on a year-over-year basis, Talisman’s adjusted earnings per share slumped approximately 77%, while revenues declined 42.3% to C$1.5 billion, hurt by lower prices of oil and natural gas.

Volume Analysis

Production during the quarter was down approximately 9.5% from the year-ago level to 401 thousand barrels of oil equivalent per day (MBOE/d), reflecting asset sales in Western Canada and maintenance downtime.

Oil & liquids production during the quarter was down 16.9% to 192.3 thousand barrels per day (MBbl/d), or 48% of total volumes. Volumes in North America, the U.K., Scandinavia , and other international regions were down 23.4%, 31.2%, 4.4%, and 30.5% to 31.4 MBbl/d, 71.3 MBbl/d, 30.1 MBbl/d, and 14.4 MBbl/d respectively. Oil & liquids production from Southeast Asia was, however, up 30.4% to 45.1 MBbl/d.

Talisman’s third quarter natural gas volumes were modestly down, approximately 1.2% to 1.3 billion cubic feet per day (Bcf/d). Production was down approximately 8.1% to 790 million cubic feet per day (MMcf/d) in North America and 62.2% in the U.K. to 14 MMcf/d. But volumes were up 111.1% in Scandinavia and 16.4% in Southeast Asia to 38 MMcf/d and 411 MMcf/d, respectively.

Realized Prices

During the quarter, the company’s realized commodity prices were down 42.9% from the year-ago quarter to C$50.29 per barrels of oil equivalent (BOE), reflecting significantly weaker oil and natural gas prices across the board.

Overall natural gas prices decreased approximately 50.3% year over year to C$5.01 per Mcf. In North America, unit realization declined 55.9% to C$4.05 per Mcf. Natural gas prices were down 67.8% in the U.K. and 44.1% in Southeast Asia to C$3.24 per Mcf and C$6.92 per Mcf, respectively, while Scandinavia experienced a 37.4% decline in realized prices to C4.83 per Mcf.

Oil & liquids realizations averaged C$72.24 per barrel, down 36.2% from the year-ago level. Prices realized in North America, U.K., Scandinavia, and Southeast Asian regions were C$60.17 per barrel (down 42.2% year over year), C$74.59 per barrel (down 35.2%), C$76.53 per barrel (down 31.9%) and C$74.30 per barrel (down approximately 36.8%), respectively.

Acreage Addition

Talisman added 90,000 acres of properties in Pennsylvania's Marcellus shale region, while boosting land holdings in the Montney region of British Columbia by 80,000 acres.

Cash Flows & Capital Expenditure

Cash flows from continuing operations during the quarter totaled C$828 million, down 46.6% from the year-earlier quarter, while the company spent C$871 million on exploration and development activities.

Balance Sheet

At the end of the quarter, Talisman had cash and cash equivalents of approximately C$2.0 billion and long-term debt of $3.9 billion, representing a debt-to-capitalization ratio of 33.5%.

Guidance

Management hiked its 2009 capital budget by 25% to C$4.5 billion, primarily to increase drilling on its shale properties and acquire new exploration lands. Talisman is targeting average production of 423,000 – 426,000 BOE/d for the year, slightly down from its previous 430,000 BOE/d forecast, as it expects to sell some non-core oil and gas assets. The company further informed that it plans to reorganize its North American operations into separate conventional and unconventional (focusing exclusively on shale gas) assets.
Read the full analyst report on "TLM"
Zacks Investment Research

StockGuru Featured Company: Save The World Air, Inc. (ZERO.OB)

QualityStocks — Tue, 10 Nov 2009 15:56:55 +0000

Save the World Air, Inc. (STWA) is a pioneer in the clean technology industry focused on energy efficiency and air quality issues. The company’s patented and patent pending technologies, including the innovative ELEKTRA under development with Temple University, provide a highly affordable and effective means of meeting the world’s increasing emission quality standards, boosting fuel [...]

HZHI, Horizon Health International Aims for Five Million in Sales With Its New E-Commerce Website

Dr. Stock Pick — Tue, 10 Nov 2009 15:42:31 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday November 10, 2009 DrStockPick.com Stock Report! HZHI, Horizon Health International Corp., HZHI.PK ************************************************************** Horizon Health International Aims for Five Million in Sales With Launch of New E-Commerce Website HZHI, Horizon Health International Corp. Horizon Health’s Business: HZHI through its US and Canadian Subsidiaries is servicing all of North America through [...]

Xcellink Signs Agreement With Technology Giant 3i Infotech for iPhone Integration

Stuart T. Smith — Tue, 10 Nov 2009 15:06:08 +0000

LAS VEGAS, NV — (Marketwire) — 11/10/09 — Xcellink International Inc. (OTCBB: XCEL), a developer of a patented mobile payments & banking platforms, is pleased to announce that is has executed an agreement with 3i Infotech for the development and integration of its patented software with Apple’s iPhone technology. Work will be carried out by 3i [...]

AT&T Completes CYCL Acquisition – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 14:45:17 +0000

AT&T Inc (T) has reportedly completed its much anticipated acquisition of Centennial Communications Corp (CYCL), the eighth largest US wireless carrier by subscribers. This follows the recent approvals of the transaction by the US Department of Justice and US telecom regulator Federal Communications Commission (“FCC"). The transaction, which was originally set to complete in second-quarter 2009, is now officially closed.

As per the agreement terms, shareholders of Centennial will receive $8.50 in cash for every share they own, equating to approximately $944 million. Including net debt, the aggregate value of the deal is $2.7 billion. AT&T will take appropriate steps to redeem all of Centennial’s outstanding debts. AT&T expects minimal dilution to earnings and cash flow in 2009 given the upfront integration costs.

The acquisition has expanded AT&T’s wireless coverage to include the rural areas of the Midwest and Southeast regions of the US as well as Puerto Rico and the US Virgin Islands, adding 893,000 new subscribers. The acquisition will also offer operational synergies and improve the service quality of AT&T’s wireless network in specific markets.

As per the demand of the US regulators, AT&T will divest certain Centennial assets in eight markets across Louisiana (central and southern) and southwestern Mississippi as the acquisition may potentially hurt consumer interest in these regions. As part of this requirement, AT&T will sell wireless assets in five of the eight markets to its rival operator Verizon (VZ) for $240 million. Moreover, AT&T has committed to continue Centennial's existing roaming agreements with other carriers for at least four years.

Top-tier US carriers are increasingly focused on acquisitions in order to expand subscriber base and coverage zones as the US subscriber population reaches maturity. AT&T was dethroned by Verizon as the largest wireless carrier in North America in early 2009 with the latter’s acquisition of Alltel Corp. Centennial acquisition brings AT&T on the level playing field, allowing it to more effectively compete with its archrival Verizon.

AT&T plans to launch its products and services in January 2010 in Centennial’s more than 100 retail locations across the US . Existing Centennial customers have the option to keep their current wireless service plans or they can switch to AT&T’s rate plans by paying applicable charges. AT&T will continue Centennial brand in Puerto Rico till mid-2010 and will launch its own products/services during third-quarter 2010. Moreover, AT&T plans to roll out 3G services in more than 200 sites in Centennial’s markets.

However, AT&T is expected to face integration problems as Centennial’s CDMA technology based wireless operations in Puerto Rico and the US Virgin Islands are not yet compatible with AT&T’s GSM wireless architecture. This may result in added costs for migrating cellular users to a uniform network platform.
Read the full analyst report on "T"
Read the full analyst report on "CYCL"
Read the full analyst report on "VZ"
Zacks Investment Research

KWK Profits Above Estimates – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 14:30:39 +0000

Quicksilver Resources Inc. (KWK) posted third quarter 2009 earnings of 25 cents per share, slightly above the Zacks Consensus Estimate of 21 cents. However, results dropped versus last year’s earnings of 40 cents.

Total revenues in the quarter declined 13% year over year to $206.7 million, with net natural gas, natural gas liquids (NGL) and oil sales of $198.3 million (down 9%). Revenues were impacted by decline in the average realized prices for all commodities, offset by increase in production volumes. Total realized prices during the quarter declined 19% to $6.93 per thousand cubic feet of natural gas equivalent (Mcfe). The average realized oil, NGL and natural gas prices in the quarter were $60.55 per barrel, $28.15 per barrel, and $7.69 per thousand cubic feet (Mcf), respectively, down 29%, 48%, and 6% from a year ago.

Total production surged 12% averaging 28.6 billion cubic feet of natural gas equivalent (Bcfe) or 311 million cubic feet of natural gas equivalent (MMcfe) per day, comprising of 71% natural gas, 27% NGLs and 2% crude oil and condensate. The increased production of gas was driven by increased activities at the company's Lake Arlington and Alliance projects in the northern portion of its Fort Worth Basin acreage. Oil, NGL and natural gas production averaged 981 barrels per day (Bbls/d) (down 26%), 14.0 thousand Bbls/d (up 22%), and 221.2 Mcf per day (up 11%), respectively.

Quicksilver continued to reduce and control costs during the quarter remaining positioned as one of the low-cost operators in North America. It reduced production expenses by 12% to $29.1 million. Unit production expense, including production, gathering and processing and transportation expense, decreased 22% to $1.02 per Mcfe during the quarter.

During the quarter, Quicksilver issued $300 million of senior notes due 2019 and used the proceeds to repay a portion of its senior credit facility. In October, the company’s bank group affirmed the borrowing base under its senior secured credit facility at $1 billion. The company currently has approximately $514 million drawn on this facility. At quarter-end, it had $1.6 million of cash and total debt of $2.5 billion.

Quicksilver guided 2009 production volumes to average 330 MMcfe to 340 MMcfe per day. It has hedged about 190 million Btu (MMBtu) per day of natural gas at a weighted-average floor price of $8.75 per MMBtu for the fourth quarter.
Read the full analyst report on "KWK"
Zacks Investment Research

Muscle Flex, Inc. (MFLI.PK) Engages Hollywood Heavy Weight Marketing Firm

QualityStocks — Tue, 10 Nov 2009 14:13:51 +0000

Muscle Flex Inc. announced today that it has engaged Hollywood heavy weight public relations firm, TLK Fusion Entertainment, to promote the company and its colorful spokesperson and CEO, Danny Alex, through nationally based media, promotions and entertainment television and broadcast programs. TLK Fusion’s powerful relationships in the entertainment industry will position the company side by [...]

Zacks Analyst Blog Highlights: Sun Microsystems, Inc., Oracle Corp., International Business Machines, Hewlett-Packard and Microsoft – Press Releases

Zacks Market Commentaries — Tue, 10 Nov 2009 12:00:45 +0000

For Immediate Release

Chicago, IL – November 10, 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: Sun Microsystems, Inc. (JAVA), Oracle Corp. (ORCL), International Business Machines (IBM), Hewlett-Packard (HPQ) and Microsoft (MSFT).

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 Monday’s Analyst Blog:

JAVA Earnings Beat, Sales Lag

Sun Microsystems, Inc. (JAVA) reported results for the first quarter of fiscal 2010 in an SEC filing. Lower operating expenses and higher gross margin helped the company lower its first quarter GAAP loss to $120 million, or 16 cents per share from a loss of $1.68 billion or $2.24 per share reported in the year-ago period and beating the Zacks Consensus estimate of a loss of 23 cents per share.

Earnings on a non-GAAP basis (excluding one-time items) rose to 2 cents per share in the quarter from a net loss of 8 cents per share in the year-ago period. Gross margin improved to 43.4% from 40.2% a year ago. Operating expenses were down 62.3% year over year, as a result of which operating margin improved to -4.5% from -55.2% in the year-ago quarter.

However, total revenue fell 25% to $2.24 billion, with both Products and Service revenues declining 32.7% and 13.9%, respectively from the year-ago period. Revenue was lower than the Zacks Consensus estimate of $2.34 billion. Sales on a year-over-year basis were down 19.1% in North America, down 29.2% in Europe , down 32.8% in emerging markets and down 23.3% in the Asia-Pacific.

Revenue from servers fell 31.4% and from storage products almost 35.9% compared to the year-ago period. Revenue from new products dropped 33%, while unit sales of servers were down 41%.

Revenue from Support Services decreased primarily due to customers seeking higher discounts, delays in service contract renewals and strong competitive pressures. Professional Services revenue decreased primarily due to decreased sales in the Systems business.

The company said that revenue fell across all of its product lines negatively impacted by the pending approval from the European Commission and other foreign regulators on its acquisition by Oracle Corp. (ORCL). The delay in approval from the regulatory body is causing Sun Micro to lose about $100 million each month.

Sun had earlier announced a headcount reduction of 3,000 or 10% over the next 12 months. It has already eliminated 7,600 positions in the past three years. The company, which is under severe financial pressure, is struggling to survive the recession.

Despite cost-cutting efforts and increased layoffs, we remain concerned about the delay in closing the merger, which could reduce its value for Oracle's business. Moreover, rivals such as International Business Machines (IBM), Hewlett-Packard (HPQ) and Microsoft (MSFT) are taking advantage of the delay by giving discounts to customers.

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Top Performer for Tues: Harbin Electric (HRBN) – Zacks #1 Rank Top Performers

James Giaquinto — Tue, 10 Nov 2009 05:00:00 +0000

Harbin Electric, Inc. (HRBN) just announced some positive third-quarter numbers that have pushed its share price higher by approximately 6% today.

As a result, HRBN is a top-performing Zacks #1 Rank company for Tuesday. Volume is nearing 500,000 shares, which is well above the daily average of nearly 368,000.

Analysts have boosted earnings estimates on the company in the past month, and more upward revisions could be on the way in the coming days.

Harbin Electric is a Chinese company that develops and manufactures a wide array of electric motors with a focus on innovative, customized and value-added products. Major product lines include industrial rotary motors, linear motors and specialty micro-motors.

HRBN is part of the Zacks #1 Rank List under the Machinery-Electrical industry. The only other company from this space that's highlighted is A.O. Smith Corporation (AOS).

Third-Quarter Report

According to Harbin Electric, robust orders in oil pumps and industrial rotary motors in China helped to offset continued weakness in specialty micro motors and overseas sales.

Total revenues climbed 18% year over year to $46.93 million, thanks to growth in the linear motor and industrial rotary motor businesses. (International sales slumped 45% thanks to the tough economies here in North America.)

Adjusted earnings per share reached 40 cents, marking a positive earnings surprise of more than 90% over the Zacks Consensus Estimate. The result also marked a more than 17.5% advance over the previous year's 34 cents.

Harbin Electric has a pretty good record of meeting or surpassing the quarterly Zacks Consensus Estimate. In the past 4 quarters, it has beaten 3 times and matched once, amassing an average surprise of about 30%.

The company called this quarter "yet another significant period on our way to becoming a global leader in the electric motor industry". HRBN expects operating results to remain strong in the fourth quarter.

Acquisition Complete

Also during the quarter, Harbin Electric completed its acquisition of Xi'an Simo Motor Incorporation (now dubbed Xi'an Tech Full Simo Motor Co. Ltd.).

HRBN said the integration and consolidation of Simo Motor's business is moving smoothly. The acquisition is expected to contribute to total operating results beginning next year.

Harbin Electric had stated that the acquisition is the most significant step to date in its strategy to expand to large size and special type of rotary motors. It should also further strengthen HRBN's leading position in the electric motor industry in China.

Earnings Estimates

Earnings estimates on Harbin Electric for both this year and next remain above levels from 30 days ago, probably stemming either from the completed acquisition of Simo Motor on Oct 19, or the announcement of the acquisition on Oct 6.

The Zacks Consensus Estimate for this year is currently at $1.35 per share, marking a gain of 17.4% from $1.15 a month ago. One of 2 covering analysts contributed to this gain.

Meanwhile, the Zacks Consensus Estimate for next year has advanced 22% in the past month to $1.82 per share from $1.49, thanks to upward revisions from 2 of 3 covering analysts. This outlook also suggests that Harbin Electric could put together year-over-year profit growth of nearly 35%.

Zacks Investment Research

HZHI, HCEI, DrStockPick.com Stock Watch! Horizon Health International Corp., HZHI.PK and Healthy Coffee International Inc., HCEI.PK

Dr. Stock Pick — Tue, 10 Nov 2009 01:02:56 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday November 9, 2009 DrStockPick.com Stock Watch! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK HZHI through its US and Canadian Subsidiaries is servicing all of North America through its E-Commerce System, providing services as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping [...]

Amdocs Outperforms Expectations – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 22:05:08 +0000

Amdocs Limited (DOX) declared better-than-expected financial results for the fourth quarter of fiscal 2009. Total revenue of $707.4 million was down 14.3% year-over-year but well above the Zacks Consensus Estimate of $681 million. The company said its revenue from managed services business together with cable and satellite businesses have started to stabilize.

Quarterly net income on a GAAP basis was $85.8 million or 42 cents per share, compared to net income of $82.7 million or 38 cents per share in the prior-year quarter. However, fourth quarter adjusted (excluding special items) EPS was 49 cents, significantly above the Zacks Consensus Estimate of 45 cents. This was primarily due to a continuous effort taken by management to streamline the cost structure.

Cost of sales in the reported quarter was $450.7 million, an improvement of 15.1% year-over-year. As a result, gross margin in the reported quarter was 37% compared to 36.4% in the year-ago quarter. Quarterly operating expenses were $159.9, down 11.6% year-over-year. At the end of the reported quarter, total order backlog was $2,385 million compared to $2,370 million at the end of the pervious quarter.

During the fourth quarter, Amdocs generated $183.7 million of cash from operations compared to $178 million in the prior-year quarter. Quarterly free cash flow (cash flow from operations less capital expenditures) was $165.8 million, compared to $145 million in the prior-year quarter. At the end of fiscal 2009, the company had more than $1,173 million of cash and marketable securities and just $1 million of outstanding debt on its balance sheet, compared to $1,244.4 million of cash and marketable securities and just $450 million of outstanding debt at the end of fiscal 2008.

Segment Results

Service revenue was $680.2 million, down 13.2% year-over-year. License revenue was $27.3 million, down 35% year-over-year. Technologically, Customer Experience revenue was $668.6 million, down 11.6% year-over-year. Systems Directory revenue was down year-over-year. Geographically, North America generated $528 million (down 5.5% year-over-year) of fourth quarter revenue, Europe generated $93 million (down 38.4% year-over-year), and the Rest of World generated the remaining $86.4 million (down 25.3% year-over-year).

Future Financial Outlook

Management is expecting first quarter 2010 revenue to be within the range of $705 million - $725 million. Diluted non-GAAP EPS, excluding acquisition-related cost and equity based compensation, is forecasted in the range of $0.51-$0.55. Equity-based compensation is expected at approximately $0.04-$0.05 per diluted share. Diluted EPS, on a GAAP basis, is expected to be within the range of $0.38 - $0.44.
Read the full analyst report on "DOX"
Zacks Investment Research

Consorteum Holdings, Inc.’s (CSRH.OB) Year-End 10-K Filing

QualityStocks — Mon, 09 Nov 2009 22:04:06 +0000

Consorteum Holdings Inc. recently announced completion of its corporate 10-K year-end filing for the fiscal year ending June 30th, 2009. The filings were completed in detail, showing the company’s busiest year to date, during which it completed a reverse merger, two audits, launched two commercial programs, and added an additional global opportunity contract. Consorteum will [...]

Toyota Swings to Profit – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 21:20:25 +0000

Toyota Motors (TM) returned to profitability in the second quarter of fiscal 2010 ended Sept. 30, 2009, after reporting losses since the third quarter of fiscal 2009. The company posted a profit of ¥21.8 billion ($232 million) or ¥6.96 (7 cents) per share.

This can be attributed to government incentive programs across the world -- such as "Cash for Clunkers" -- that helped the company recoup its market share. However, this is still lower than the ¥139.8 billion ($1.49 billion) or ¥44.52 (47 cents) per share of profit recorded in the same quarter of 2008.

Consolidated revenue in the quarter dipped 24% to ¥4.54 trillion ($48 billion). Automotive revenue fell 24% to ¥4.11 trillion ($44 billion) while Financial Services revenue shrank 17% to ¥307 billion ($4 billion). This was on the back of a decline in vehicle sales in each region as well as negative impact from the appreciation of yen.

Sales volume declined 16% to 1.64 million units due to a decrease in volume in all the regions except North America. In North America, volume increased by 13,938 units to 250,704, driven by demand generated by the Cash for Clunkers program. Toyota Corolla topped the buy list in the program, followed by Toyota Camry in third place and Toyota Prius in seventh place.

Toyota reduced its interim cash dividend to ¥20 per share (21 cents per share) for the first half of the fiscal under study from ¥35 per share (37 cents per share) in order to take control of its serious financial position.

Financial Position

Toyota had cash and cash equivalents of ¥2.65 trillion ($28 billion) as of Sept. 30, 2009. Long-term debt amounted to ¥9.21 trillion ($98 billion) as of that date. The long-term debt to capitalization ratio stood at 48%.

In the first half of fiscal 2010, Toyota had a net cash flow of ¥1.57 trillion ($17 billion) from operating activities, an increase of ¥54 billion ($577 million) from the year-ago level. Meanwhile, capital expenditures reduced to ¥329 billion ($3.5 billion) in the above period from ¥702 billion ($7.5 billion) during the same period a year ago.

Looking Ahead

Toyota revised its consolidated vehicle sales for the fiscal ending Mar. 31, 2010 from 6.6 million to 7.03 million, an increase of 430,000 units. This figure reflects the increase in sales due to the success of various incentive programs launched by governments across the world to stimulate demand in the industry as well as sales of the company’s own hybrids and other environment-friendly vehicles.

Consequently, consolidated net revenues forecast were upgraded to ¥18 trillion ($191 billion). However, the company anticipates an operating loss of ¥350 billion ($3.72 billion) and net loss of ¥200 billion ($2.13 billion) for fiscal 2010. These lead us to recommend the shares of the company as Neutral.
Read the full analyst report on "TM"
Zacks Investment Research

CSRH, Consorteum Holdings Inc. Its Consumer Stored Value Rebate Card will offer Manufacturers and Retailers a new way to Process mail-in Rebates

Dr. Stock Pick — Mon, 09 Nov 2009 20:32:20 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Monday November 9, 2009 DrStockPick.com Stock Report! CSRH, Consorteum Holdings Inc, CSRH.OB ********************************************************** Consorteum Holdings Inc. Launches Alternative Mail-In Rebate Program for Manufacturers and Retailers Consorteum Holdings Inc. (OTCBB: CSRH) will build on its extensive expertise within the Payments and Transaction Industry in North America, Europe and Internationally. By [...]

Air Products Focuses on China – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 17:59:08 +0000

Atmospheric and Specialty gases company, Air Products and Chemicals Inc. (APD) recently opened its new specialty amines plant in Nanjing, China. The facility complements its existing local capabilities to support customers in the growing polyurethane additives and epoxy markets.

The new specialty amines plant is designed to manufacture many of the amine chemistries marketed by the business globally. Air Products already operates two large air separation plants. Air Products focuses on China for growth as the country seems to be having a strong and potential market as well as industries, such as construction, coatings and automobile production.

The new plant has significantly strengthened the supply chain capabilities of Air Products' Performance Materials business in China and throughout Asia. Other strategic capabilities that the company has built for its Performance Materials business include a technology center in Shanghai's Zhangjiang Industrial Park, a triethylenediamine manufacturing facility for polyurethane additives in Changzhou, warehouses in Changzhou, Shanghai, Guangzhou and Nanjing.

The plant has also enhanced Air Products' ability to supply differentiated products. The initial focus will be on several performance-oriented products marketed by Air Products' epoxy additive and polyurethane additive product lines, including the Polycat and Dabco series of amine catalysts, and Ancamine, Ancamide and Sunmide series of epoxy curing agents used in diverse industries, such as coatings, inks, adhesives, construction, appliance and automotive.

This apart, Air Products also plans to build a new world-scale air separation unit (ASU) at its La Porte, Texas industrial gases facility. The energy efficient ASU will replace older assets at the site and provide benefits to customers through higher-reliability pipeline of oxygen and nitrogen supply, and enhanced production of merchant and electronics products including argon and xenon. The new ASU is to be on-stream in October 2011.

The ASU at La Porte will serve customers across Air Products' three major business areas of Tonnage Gases, Merchant Gases and Electronics and increase supply security and reliability. The company expects the ASU to deliver significant productivity gains through decreased energy consumption and operating costs.

Air Products also plans to purchase and operate four existing air separation units to supply industrial gases to Xingtai Iron and Steel Corp., Ltd., one of China’s largest specialty steel manufacturers located in Hebei province, China. Air Products is the second largest industrial gas supplier in North America and the fourth largest in the world. The company serves customers in the industrial, energy, technology and healthcare markets worldwide.

Read the full analyst report on "APD"
Zacks Investment Research

Micromet Misses Estimates – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 16:42:41 +0000

Micromet’s (MITI) third-quarter loss per share came in at 22 cents, well below the Zacks Consensus Estimate of 14 cents and a loss of 15 cents in the prior-year period. The company reported revenues of $4 million, compared to $7 million in the third quarter of 2008. Micromet records revenues primarily in the form of reimbursements of expenses incurred by the company under different collaborative agreements. We believe current investor focus is more on the developments of the company’s portfolio rather than the financials.

Operating expenses during the quarter increased 28% year over year to $17.13 million, primarily due to a 34% rise in R&D expenses. The increase in R&D expenses was driven by Micromet assuming full responsibility of the development of its lead candidate blinatumomab as per the company’s agreement with MedImmune.

As a reminder, earlier this month, Micromet had agreed to buy out MedImmune's option to reacquire the right to commercialize blinatumomab in North America, and to terminate the collaboration agreement signed in 2003 under which MedImmune had been granted the right to develop and commercialize blinatumomab in North America. Following this agreement, Micromet now controls global rights to develop and commercialize blinatumomab.

Cash and cash equivalents at the end of the reported quarter were $100 million, up from $46 million at the end of December 2008. During the quarter, Micromet received net proceeds of about $75 million by offering $80.5 million in common stock. We believe with the advancement of clinical trial trials, the company’s R&D costs are expected to rise further, hence the need to raise funds.

There were many significant developments during the quarter. Micromet received Orphan Drug Designation from the European Medicines Agency (EMEA) for blinatumomab (MT103), currently in phase II clinical trial meant for the treatment of acute lymphoblastic leukemia (ALL). Additionally, in September, the company reported positive interim data from the phase I dose escalation clinical trial of MT110 for the treatment of patients with solid tumors. Both candidates are being developed under the company’s proprietary BiTE antibody platform.

We are pleased with Micromet’s collaboration agreement with Sanofi-Aventis (SNY) to develop a BiTE antibody against an undisclosed solid tumor target. As per the deal, Micromet will be responsible for the discovery, research and development of the antibody through the completion of phase 1 clinical trials, after which Sanofi-Aventis will assume full responsibility for further development and commercialization process. Micromet received an initial payment of €8 million (approximately $12 million). In addition, the company is eligible to receive potential milestone payments of up to €162 million (approximately $241 million) and sales and royalties payments on commercialization of the drug.

Read the full analyst report on "MITI"
Read the full analyst report on "SNY"
Zacks Investment Research

Wind Works Power Corp. Signs Option to Acquire 100% Interest in Wind Energy Project in Belgium

Stuart T. Smith — Mon, 09 Nov 2009 15:02:57 +0000

OTTAWA, ONTARIO — (Marketwire) — 11/09/09 — Wind Works Power Corp. (OTCBB: WWPW)(FRANKFURT: R5E1)(WKN: AOKE72) is pleased to announce that they have signed an option agreement to acquire a 100% interest in Honelles, a 10 megawatt wind energy project located in Belgium. In consideration for the 100% interest, Wind Works will make an initial cash [...]

Sun’s Earnings Beat, Sales Lag – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 14:15:02 +0000

Sun Microsystems, Inc. (JAVA) reported results for the first quarter of fiscal 2010 in an SEC filing. Lower operating expenses and higher gross margin helped the company lower its first quarter GAAP loss to $120 million, or 16 cents per share from a loss of $1.68 billion or $2.24 per share reported in the year-ago period and beating the Zacks Consensus estimate of a loss of 23 cents per share.

Earnings on a non-GAAP basis (excluding one-time items) rose to 2 cents per share in the quarter from a net loss of 8 cents per share in the year-ago period. Gross margin improved to 43.4% from 40.2% a year ago. Operating expenses were down 62.3% year over year, as a result of which operating margin improved to -4.5% from -55.2% in the year-ago quarter.

However, total revenue fell 25% to $2.24 billion, with both Products and Service revenues declining 32.7% and 13.9%, respectively from the year-ago period. Revenue was lower than the Zacks Consensus estimate of $2.34 billion. Sales on a year-over-year basis were down 19.1% in North America, down 29.2% in Europe , down 32.8% in emerging markets and down 23.3% in the Asia-Pacific.

Revenue from servers fell 31.4% and from storage products almost 35.9% compared to the year-ago period. Revenue from new products dropped 33%, while unit sales of servers were down 41%.

Revenue from Support Services decreased primarily due to customers seeking higher discounts, delays in service contract renewals and strong competitive pressures. Professional Services revenue decreased primarily due to decreased sales in the Systems business.

The company said that revenue fell across all of its product lines negatively impacted by the pending approval from the European Commission and other foreign regulators on its acquisition by Oracle Corp. (ORCL). The delay in approval from the regulatory body is causing Sun Micro to lose about $100 million each month.

Sun had earlier announced a headcount reduction of 3,000 or 10% over the next 12 months. It has already eliminated 7,600 positions in the past three years. The company, which is under severe financial pressure, is struggling to survive the recession.

Despite cost-cutting efforts and increased layoffs, we remain concerned about the delay in closing the merger, which could reduce its value for Oracle's business. Moreover, rivals such as International Business Machines (IBM), Hewlett-Packard (HPQ), Cisco Systems Inc. (CSCO) and Microsoft (MSFT) are taking advantage of the delay by giving discounts to customers.

Sun’s performance has not been good for quite a number of quarters. The weak economy, slower adoption of new products, consolidation of the customer base, delay or cancellation of projects, increased competition and sluggishness in overall IT spending have taken a toll on the company.

The company said that customers are exercising caution due to the delay in the acquisition, causing bookings in the quarter to fall 22.7% year over year and 11.4% quarter over quarter. Total backlog declined 5% year over year to $1.84 billion.

Balance Sheet
Sun’s balance sheet and cash flow deteriorated considerably in the quarter. The company exited the quarter with $2.38 billion in cash and short-term marketable securities, down from $2.86 billion generated in the previous quarter. Long-term debt was $589 million in the quarter, up $8 million from the previous quarter. Operating cash flow declined to $38 million in the quarter from $75 million in the previous quarter.
Read the full analyst report on "JAVA"
Read the full analyst report on "ORCL"
Read the full analyst report on "IBM"
Read the full analyst report on "HPQ"
Read the full analyst report on "CSCO"
Read the full analyst report on "MSFT"
Zacks Investment Research

DuPont Reaffirms Outlook – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 10:10:00 +0000

Ei Dupont De Nemours Co.(DuPont) (DD) recently announced that it expects to generate about 10% growth in the top-line during 2009-2012. The chemical giant also plans to capture $1 billion in fixed cost productivity and $1 billion in working capital productivity gains during the 2010-2012.

On average, DuPont expects to deliver almost 20% year-over-year growth in earnings per share between 2009 and 2012. Despite an expected decline in pharmaceutical royalties after expiry of patents in 2010, DuPont expects to grow earnings between $2.10 and $2.40 per share in the year. The company has also reaffirmed its full-year 2009 earnings outlook of $1.95 to $2.05 per share, excluding significant items, which are estimated to be $0.15 per share for full-year 2009 or $1.80 to $1.90 per share on a reported basis. It had previously forecasted earnings of $1.70 to $2.10 a share. DuPont expects improving demand in key markets, as well as lower raw material costs.

For the full year 2009, the Zacks Consensus Estimate is pegged at $2.10, slightly higher than management's guidance. For the fourth quarter of the current year, Zacks is expecting DuPont to flash earnings of 41 cents. DuPont reported third-quarter 2009 earnings of 45 cents, beating the Zacks Consensus Estimate of 33 cents, helped by significant cost cuts and lower raw material, energy and freight expenses.

In the Agriculture & Nutrition (Pioneer Hi-Bred, Crop Protection, Nutrition & Health) business, DuPont expects to generate more than $2 billion in top-line growth through 2012 by growing North America corn and soya volumes and market share. The company expects margins to improve in the Electronics & Communications business. The company anticipates top-line growth by leveraging an established leadership position in photovoltaics and displays; introducing key products and capitalizing on recovery opportunities and providing operational discipline with a lean business structure.

In the Performance Coatings business, DuPont plans to restore pre-tax operating margins to low double digits by 2012 by delivering $300 million in fixed and variable cost productivity, while expanding and leveraging its leadership in refinish products and growing the portfolio in emerging markets. For Performance Materials (Performance Polymers and Packaging & Industrial Polymers) business, the company plans to focus on emerging markets by delivering lightweight and renewably-sourced materials to meet escalating global demands and continuing intense focus on productivity.

In the Safety & Protection (Protection Technologies, Building Innovations, Safety Resources) segment, DuPont expects to generate 12%-16% annual revenue growth by launching new science-based products, including lighter weight and next-generation advanced materials.

In the Performance Chemicals (Chemicals & Fluoroproducts, Titanium Technologies) business, DuPont will focus on cost productivity improvement; accelerating globalization to capture emerging markets growth. The company has merged two businesses in this segment (DuPont Chemical Solutions Enterprise and DuPont Fluoroproducts) into a single powerhouse unit named DuPont Chemicals & Fluoroproducts – accelerating growth by expanding global market access. The merger further streamlines the company from 14 to 13 businesses.

Cost cuts have boosted DuPont's third-quarter pretax earnings by about $300 million, bringing cost reductions year-to-date to $900 million. The company's full-year goal is $1 billion. Raw material, energy and freight costs were 12% lower than the previous year levels, and DuPont expects these costs for full year 2009 to be about 5% to 6 % lower than 2008. All major chemical makers, including Dow Chemical Company (DOW), are focusing on cutting expenses. Dow has cut down on more than $375 million of expenses in the first six months of 2009 and expects synergies of $1.3 billion in the year.

DuPont is currently the world's second-largest chemical company in terms of market capitalization, and the fourth in terms of revenues. We maintain our Neutral recommendation on DuPont.

Read the full analyst report on "DD"
Read the full analyst report on "DOW"
Zacks Investment Research

CVAT, PWRM, PSFT, AQNM, CSRH, DrStockPick.com Weekend Update!

Dr. Stock Pick — Sat, 07 Nov 2009 19:56:06 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Saturday November 7, 2009 DrStockPick.com Weekend Update! CVAT, PWRM, PSFT, AQNM, CSRH ************************************************************** PSFT, Powersafe Technology Corp., PSFT.PK PSFT subsidiary Amplification Technologies Inc. (www.amplificationtechnologies.com) (ATI), is offering higher performance thermoelectrically cooled discrete amplification single photon counting solid state photodetectors. These photodetectors are mounted on a two stage thermoelectric cooler [...]

IGT Beats, but Earnings Down – Analyst Blog

Zacks Market Commentaries — Fri, 06 Nov 2009 21:54:36 +0000

International Game Technology (IGT) reported adjusted earnings of 19 cents per share during fiscal 2009 fourth quarter, compared to a net income of 28 cents in the year-ago quarter. The result topped the Zacks Consensus Estimate by 3 cents.

In the quarter, the company recorded non-cash charges of approximately $77.2 million, or 26 cents per share to give effect to a reduction in the carrying value of its investment in Walker Digital Gaming Inc. These charges also included a decline in the value of its Las Vegas Gaming International investment and foreign deferred tax provision.

Total revenue fell 18.6% to $514.6 million from the year-ago quarter, primarily due to weakness in product revenue (45% of total revenue), which fell 23.2% to $231.4 million, while units shipped worldwide decreased 30% year-over-year. Revenue from Gaming Operations (55% of total revenue) decreased 14.4% year over year to $283.2 million due to the lower play levels and mix shift for lower-yielding, stand-alone lease operations games in its installed base. However, the quarter benefited from an increase in systems revenues and sand conversion sales.

The installed base of recurring revenue games increased 900 units year over year to 61,400 units, driven by growth in international placements, partially offset by a reduction in domestic placements.

Of the product revenues, North America decreased 30.7% due to lesser number of openings and replacement sales, while International revenue declined 11.5% due to the economic slowdown and negative effects of foreign currency. The company said it recognized 4,200 sales in North America during the quarter, including 3,800 replacement units. Internationally, IGT recognized 7,900 unit sales, all of which are from replacements.

Operating Performance

Gross margin remained unchanged from the year-ago period at 56.2% due to higher gaming gross margin, which benefited from a larger base of fully depreciated units, partially offset by lower product gross margin impacted unfavorably by higher costs related to systems upgrades and fewer systems sales and lower volumes due to fixed manufacturing costs.

The company is focused on reducing costs related to manufacturing materials, headcount reductions and other operating expense controls and generated approximately $135 million in annualized savings. Excluding non-cash charges associated with the investment in Walker Digital, restructuring charges and bad debt expenses, operating expense fell 17% to $169.7 from the prior year quarter. Despite the fall, operating income fell 22.5% year-over-year due to lower revenue base.

We remain encouraged by the company's substantial free cash flow which could drive future growth. The company generated $547.9 million of cash from operating activities for the full fiscal year 2009, compared to $486.5 million generated in 2008. Capital expenditures totaled $257 million for the year, compared to $298 million in the prior year. Thus, free cash flow totaled $169.2 million in fiscal 2009 versus $12.7 million in fiscal 2008. IGT exited the quarter with $247.4 million in cash and investments and $2.2 billion in debt. Deferred revenue increased approximately $48.8 million to $122.0 million at quarter-end as a result of additional multi-element contracts.

Outlook

The company is witnessing stabilized demand for its slot machines and casino management systems. The company plans to focus on its core activities in fiscal 2010. Management expects cost reduction throughout 2010. As a result, the company expects the EPS to be in the range of 77 cents to 87 cents per share, including 6 cents of non-cash interest expense due to a change in accounting for convertible notes.

International Game Technology is a leader in slot machine distribution and manufacturing. IGT sells its games in the U.S. and internationally. It also makes systems that monitor slot machine play. However, the company faces strong competition from Bally Technologies Inc. (BYI) and WMS Industries Inc. (WMS) in the U.S.
Read the full analyst report on "IGT"
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Zacks Investment Research

Lion Energy, Southern Star Energy (SSEY.OB), Gold Star Resources Fuse to Create Combined Company with Promising Growth Opportunities

QualityStocks — Fri, 06 Nov 2009 21:19:29 +0000

Lion Energy Corp. is a Canadian exploration company focused on the acquisition, exploration and development of oil and gas reserves in Central and East Africa. The company today made a joint announcement with Southern Star Energy Inc. (SSEY.OB), a U.S.- based oil and gas exploration company, and Gold Star Resources Corp. (TSX-V: GXX), a Canadian [...]

CVAT, SBUX, PWRM, CVS, PSFT, SWKS, AQNM, IBM, CSRH, DrStockPick.com Stock Report!

Dr. Stock Pick — Fri, 06 Nov 2009 20:03:45 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Friday November 6, 2009 DrStockPick.com Stock Report! CVAT, SBUX, PWRM, CVS, PSFT, SWKS, AQNM, IBM, CSRH ************************************************************** PSFT, Powersafe Technology Corp., PSFT.PK PSFT subsidiary Amplification Technologies Inc. (www.amplificationtechnologies.com) (ATI), is offering higher performance thermoelectrically cooled discrete amplification single photon counting solid state photodetectors. These photodetectors are mounted on a [...]

Dr Pepper Reports Strong Earnings – Analyst Blog

Zacks Market Commentaries — Fri, 06 Nov 2009 18:14:59 +0000

Dr Pepper Snapple Group Inc. (DPS), a leading producer of flavored beverages in North America and the Caribbean, reported strong third-quarter earnings of 59 cents per share, compared to 41 cents in the year-earlier quarter. Excluding the one-time non-recurring items, earnings for the quarter came at 54 cents per share versus 45 cents in the year-ago period.

Bottler case sales volume increased 4% during the quarter year over year with carbonated soft drinks growing 5% and non-carbonated beverage sales up marginally. On a geographic basis, volume sales increased 4% in North America and 9% in Latin America.

Net sales of Beverage Concentrates increased 14% during the quarter due to extensive distribution of Crush-brand. Segment operating profit increased 25% year over year. In the Packaged Beverages segment, net sales decreased 1% with a 1% dip in sales volume. However, segment operating profit increased 42% due to lower packaging and transportation costs and continued operating efficiencies.

During the quarter, Dr Pepper reported a 9% increase in sales volume growth in Latin America Beverages. Segment operating profit, however, remained flat during the quarter largely due to higher selling and distribution costs. The company decreased its corporate and other items expenses to $65 million during the quarter compared to $69 million in the year-ago quarter.

Year-till-date, Dr Pepper generated $701 million of cash from operating activities with a capital expenditure of $218 million. During the first nine months of 2009, the company also repaid $480 million of debt, and had no significant debt maturities before 2011.

For the full year, the company expects reported earnings in the range of $2.12 - $2.16 per share with a 3% - 4% decline in net sales. Excluding non-recurring items, earnings for the year are expected in the range of $1.92 - $1.96 per share.
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Muscle Flex, Inc. (MFLI.PK) Now Accepting Orders for the Beagle StepFit, the BUDDY Tablet Caddy and “Danny Alex Commercial Blue” T-Shirts

QualityStocks — Fri, 06 Nov 2009 16:54:15 +0000

Prior to their national commercial launch, Muscle Flex Inc. announced that it has gone live with accepting orders for its Muscle Flex Beagle StepFit Pedometer, the BUDDY Tablet Caddy and “Danny Alex Commercial Blue” T-shirts on its newly designed website at www.MuscleFlexInc.com. “We have already had a number of orders for our Muscle Flex products and [...]

Agrium’s Profit Sinks – Analyst Blog

Zacks Market Commentaries — Fri, 06 Nov 2009 15:00:00 +0000

Agrium Inc. (AGU) reported adjusted net earnings of 29 cents per share in the third quarter of 2009, missing the Zacks Consensus Estimate of 32 cents. Year over year, earnings declined a significant 87% on lower volumes and prices. Revenues were down 41% year over year to $1.9 billion on weak corn prices and lower consumption of crop protection products at retail level.

Retail segment: Retail segment revenues plunged 25% to $1.2 billion in the quarter on a 41% decline in crop nutrient sales to $345 million due to a significant decline in crop nutrient prices. Crop nutrient volumes in the quarter remained flat. Gross profit from the crop nutrients business almost halved to $31 million. Crop protection sales were $768 million in the quarter, down 12% from the same period last year. The decline was driven by lower volumes for fungicides and lower pricing for glyphosate products.

Gross profit in the quarter was $169 million, down 12% from the previous year. Profit from the nutrient business was down significantly due to lower sales volumes from Legacy Agrium Retail and significantly lower margins resulting from the carry-over of high priced crop nutrient inventories, which were sold at lower prices. Sales for seed and services decreased 14% to $114 million.

Wholesale segment: Wholesale’s net sales were down 59% to $658 million in the quarter, driven by lower sales prices and volumes for nitrogen and phosphate products combined with significantly lower potash sales volumes. Nitrogen sales were down 48% to $260 million while potash sales declined 56% to $109 million. Phosphate sales were down 64% to $114 million.

Following lower sales, nitrogen profits shrank 61% to $80 million while potash profits declined 81% to $47 million. Phosphate profits of $1 million were negligible compared with $195 million in the year-ago quarter.

Both international and domestic demand were significantly lower than usual due to a combination of delayed contract settlements in China and India, credit issues in many other international markets and the current cautious approach to replenishing stocks of retailers and distributors in North America and globally.

Advanced Technologies segment: Sales in the Advanced Technologies segment were down 33% to $60 million year over year, driven by lower volumes and margins in turf and ornamental business due to lower household expenditures as a result of the slower economic growth. Cash provided by operating activities was $229 million in the quarter compared to $300 million in the prior year.

Compared to the end of the third quarter of 2008, net debt to net debt plus equity dropped 10% to 26% at the end of the quarter. Agrium sees a significant recovery in demand across all crop inputs starting early 2010, particularly for the retail and potash businesses. Corn prices are recovering and the growth for food products is set to remain strong.

Through all three operational business units – Retail, Wholesale, and Advanced Technologies – Agrium is well positioned to benefit from a recovery in the agriculture and crop input market. Agrium expects earnings per share of 14 cents to 44 cents in the fourth quarter of 2009. Meanwhile, Agrium repeated its commitment to acquire Deerfield, Illinois-based CF Industries (CF) and its willingness to increase its offer of $40 in cash plus one U.S. dollar-denominated Agrium share.

CF has steadfastly rejected Agrium’s takeover offer. Despite two upward revisions in the offer price, CF had turned down Agrium primarily on the grounds of substantial undervaluation. CF Industries has meanwhile made a hostile takeover bid for rival Terra Industries. Terra, which produces and markets nitrogen products, has repeatedly rebuffed CF’s proposal.

However, CF remains committed to acquire Terra. Agrium also remains committed and has extended the deadline several times. The company has stated that its cash reserves are sufficient and has committed financing to complete the deal. Should the acquisition go through, Agrium would become the world's fourth-largest fertilizer producer.
Read the full analyst report on "AGU"
Read the full analyst report on "CF"
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Zacks Industry Outlook Highlights: CNOOC Ltd., China Petroleum and Chemical Corporation, or Sinopec, Cameron International, Nabors and Patterson-UTI – Press Releases

Zacks Market Commentaries — Fri, 06 Nov 2009 12:50:54 +0000

For Immediate Release

Chicago, IL – November 6, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Oil & Gas sector, including CNOOC Ltd. (CEO), China Petroleum and Chemical Corporation, or Sinopec (SNP), Cameron International (CAM), Nabors (NBR) and Patterson-UTI (PTEN).

A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/26953/Oil+%26amp%3B+Gas+Industry.

The strengthening oil price environment should benefit producers, particularly those international players having attractive growth opportunities in their home markets. Two such standout names are China’s CNOOC Ltd. (CEO) and China Petroleum and Chemical Corporation, or Sinopec (SNP), both of which remain well-placed to benefit from the country’s growing appetite for energy.

CNOOC enjoys a monopoly on exploration activities in China’s very prospective offshore region in addition to having a growing presence in the country’s natural gas and LNG infrastructure. On the other hand, Sinopec is the second largest crude oil and natural gas producer, and the largest refiner and marketer of refined petroleum products in China. Sinopec’s leverage to the lucrative Chinese market and the recent $7.5 billion Addax acquisition is expected to help sustain its growth momentum.

Within the oilfield services group, we prefer to own companies such as Cameron International (CAM), that derives about two-thirds of its revenue from outside North America, thereby playing an offsetting role to the relatively soft U.S. drilling scene. Cameron recently posted better-than-expected third quarter results and raised its 2009 forecast, as a revival in energy prices led to improved drilling activities.

WEAKNESSES

We continue to feel strongly that industry players in the servicing and drilling ends of the business with substantial natural gas-focused and North America-centric operations should be avoided. A major sub-sector that fits that description is the onshore drillers. While we currently don't have any Underperform rated stocks in this group, we remain skeptical of land drillers like Nabors (NBR) and Patterson-UTI (PTEN), given the extent of excess capacity in the sector that is expected to weigh on dayrates and margins well into next year.

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Oil & Gas Industry – Industry Outlook

Zacks Market Commentaries — Thu, 05 Nov 2009 21:16:48 +0000

OUTLOOK

The improving economic scene, both here in the U.S. as well as worldwide, is the main driver of the current oil rally that has seen the commodity settling around the $80 per barrel level. But high levels of product inventories (particularly gasoline), along with still higher supplies, will limit any sustained crude gains, in our view. But way too many factors weigh on oil prices, from OPEC decisions and geostrategic tensions to the value of the U.S. dollar and seasonal variables, to definitively size up each one of them for their respective impact on prices.

In its latest release, the Energy Information Administration (EIA) reported a less-than-anticipated increase in crude stockpiles, which rose by 800,000 barrels for the week ending October 23. However, current crude oil stocks, at 339.9 million barrels, still remain 9% above the year-earlier level as well as above the upper limit of the average for this time of the year. As such, crude oil’s near-term fundamentals remain dismal, to say the least.

At current projections, world crude demand for 2009 is expected to be below last year’s level, which itself was below the 2007 level -- the first time since the early 1980’s of two back-to-back negative growth years.

Last month, the Paris-based International Energy Agency (IEA) provided some positive news in this otherwise bleak supply-demand picture. The energy-monitoring body of 28 industrialized countries hiked its global oil demand forecast for both this year and 2010 by 200,000 barrels per day and 350,000 barrels per day, respectively, citing higher-than-expected consumption in Asia and the Americas.

Our view is that oil should be able to hold onto its recent gains and consolidate around current levels, provided this favorable economic view remains in place. But this does not mean that we will not see any short-term pullbacks. On the whole, we expect oil prices in 2010 to be higher than the 2009 levels, but remain significantly below the 2008 peak levels.

Natural Gas

The overall picture remains particularly weak for natural gas, whose inventories have recently hit a new record high of 3.76 trillion cubic feet (Tcf) and is threatening to test the maximum capacity of 3.89 Tcf. Continued strong domestic production (from a number of unconventional natural gas fields) and recessionary consumption (due to the economic downturn), particularly in the industrial sector, are at the core of the commodity's current woes.

Natural gas prices rallied earlier last year, reaching over $13 per million Btu (MMBtu) in July 2008, before trending down to seven-year low level of sub-$2 per MMBtu (we are referring to Henry Hub spot prices here) in September 2009. This, together with tighter access to credit, has prompted producers to scale back drilling operations over the past few quarters.

The supply picture is expected to reverse in the coming months as the lag effect of the sharp drop in domestic drilling activity takes hold. But we do not think this would be enough to offset the record high inventories (storage levels remaining 12% above their five-year average) and steep recession-related cuts in demand. This translates into limited upside for natural gas-weighted companies and related support plays.

OPPORTUNITIES

The strengthening oil price environment should benefit producers, particularly those international players having attractive growth opportunities in their home markets. Two such standout names are China’s CNOOC Ltd. (CEO) and China Petroleum and Chemical Corporation, or Sinopec (SNP), both of which remain well-placed to benefit from the country’s growing appetite for energy.

CNOOC enjoys a monopoly on exploration activities in China’s very prospective offshore region in addition to having a growing presence in the country’s natural gas and LNG infrastructure. On the other hand, Sinopec is the second largest crude oil and natural gas producer, and the largest refiner and marketer of refined petroleum products in China. Sinopec’s leverage to the lucrative Chinese market and the recent $7.5 billion Addax acquisition is expected to help sustain its growth momentum.

Within the oilfield services group, we prefer to own companies such as Cameron International (CAM) that derives about two-thirds of its revenue from outside North America, thereby playing an offsetting role to the relatively soft U.S. drilling scene. Cameron recently posted better-than-expected third quarter results and raised its 2009 forecast, as a revival in energy prices led to improved drilling activities.

WEAKNESSES

We continue to feel strongly that industry players in the servicing and drilling ends of the business with substantial natural gas-focused and North America-centric operations should be avoided. A major sub-sector that fits that description is the onshore drillers. While we currently don't have any Underperform rated stocks in this group, we remain skeptical of land drillers like Nabors (NBR) and Patterson-UTI (PTEN), given the extent of excess capacity in the sector that is expected to weigh on dayrates and margins well into next year.

As expected, natural-gas woes in North America have pulled down the oilfield services companies' third-quarter results. In particular, we remain wary of service providers like Smith International Inc. (SII), given its high North American exposure (from the W-H Energy acquisition) in the face of a collapse in the region’s drilling activities. We have Neutral recommendation on the company, whose third quarter results came in significantly below expectations.

Within the E&P group, we see little reason for investors to own shares of Stone Energy Corp. (SGY). We believe that Stone’s asset portfolio, centered on the Gulf Coast/Gulf of Mexico regions and lacking meaningful exposure to the emerging shale plays, is not suited for the current environment of low commodity prices and restricted access to capital.

We also maintain our cautious view on oil refiners, given the higher-than-average gasoline and distillate stocks -- a combination that will continue to hurt their profitability going into 2010. Additionally, the sharply lower refinery utilization (at around 82% of capacity) provides enough evidence that refineries are cutting back on production because the economy is still struggling on the demand side.

Being the largest independent refiner, Valero Energy Corp. (VLO) remains particularly exposed to this unfavorable macro backdrop. We have an Underperform recommendation on the company.
Zacks Investment Research

CSRH, Consorteum Holdings Inc.Its Consumer Stored Value Rebate Card will offer Manufacturers and Retailers a new way to Process mail-in Rebates

Dr. Stock Pick — Thu, 05 Nov 2009 19:05:47 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Thursday November 5, 2009 DrStockPick.com Stock Report! CSRH, Consorteum Holdings Inc, CSRH.OB ********************************************************** Consorteum Holdings Inc. Launches Alternative Mail-In Rebate Program for Manufacturers and Retailers Consorteum Holdings Inc. (OTCBB: CSRH) will build on its extensive expertise within the Payments and Transaction Industry in North America, Europe and Internationally. By [...]

Garmin Reports Robust Quarter – Analyst Blog

Zacks Market Commentaries — Thu, 05 Nov 2009 18:35:37 +0000

Garmin Ltd. (GRMN) reported third quarter earnings that beat the Zacks Consensus Estimate by 32 cents. Fully diluted pro forma earnings per share (EPS) were $1.01, compared to 83 cents in the June quarter and 88 cents in the comparable prior-year quarter. The pro forma number excludes a foreign currency gain in the last quarter.

Revenue

Revenue of $781 million was up 16.8% sequentially and down 10.2% year over year. Both volumes and ASPs contributed to the sequential revenue increase in the last quarter. Total units increased 4.1% sequentially to 3.87 million, while the blended average selling price (ASP) increased 12.2% to $202.08.

Strength was broad-based across geographies. North America contributed 64% of quarterly revenue (up 15.2% sequentially), Europe 30% (up 20.8%), while Asia accounted for the balance (up 13.7%). Although the company usually enjoys better pricing in Europe, the price differential between North America and Europe is fading out.

Revenue by Segment

The auto/mobile, outdoor/fitness, aviation and marine segments generated 69.9%, 16.9%, 7.4% and 5.8% of third quarter revenue, respectively.

The Auto/Mobile segment was up 25.0% sequentially and down 12.9% year over year. The recession had a negative impact on year-over-year comparisons, with ASPs declining 12% and volumes 1%. Sequential strength was due to positive seasonality. Both North American and Asian markets saw strength in the last quarter, while Europe stabilized. The company gained PND market share in North America, which increased from 57% to 60% in the last quarter. Market share in Europe was steady at around 20%.

The Outdoor/Fitness segment was up 22.4% sequentially and 11.4% year over year. The strength in the last quarter was atributable to the success of new products.

The Aviation segment revenue was down 9.7% sequentially and 28.6% year over year. The weakness was due to lower spending, and impacted all the three major areas -- OEM, retrofit and portable.

The Marine segment was down 24.5% sequentially, but up 3.1% year over year. The third quarter decline is in line with normal seasonality. The increase from the year-ago period was due to strength in new products.

Gross Margin

Gross margin for the quarter was 52.4%, down 10 basis points (bps) sequentially, but up 810 bps year over year. The auto/mobile segment margin was up 365 bps sequentially and 1,059 bps year over year. The sequential improvement was on account of lower per-unit costs partially offset by lower ASPs.

All other segments saw gross margin declines compared to the June 2009 quarter. On a year-over-year basis, gross margins improved in all except the outdoor/fitness segment. The outdoor/fitness, aviation and marine segments saw sequential declines in gross margin of 508 bps, 715 bps and 568 bps, respectively. Gross margins in these segments grew -9 bps, 153 bps and 446 bps, respectively, from the year-ago period.

Operating Performance

The operating expenses of $172.9 million were up 13.4% from the previous quarter’s $152.5 million. However, the operating margin expanded 56 bps to 30.3%, compared to 29.8% in the second quarter. The higher operating margin was due to lower R&D expenses, partially offset by higher advertising expenses.

On a pro forma basis, GRMN had a net income of $203.4 million, or a 26.0% net income margin compared to $166.7 million, or 24.9% in the previous quarter, and $184.0 million or 21.1% net income margin in the third quarter of last year.

On a fully diluted GAAP basis, the company recorded a net profit of $215.1 million ($1.07 per share) compared to $161.9 million ($0.81 per share) in the previous quarter and a net profit of $171.2 million ($0.82 per share) in the prior-year quarter.

Balance Sheet

Inventories were up 15.5% sequentially, with inventory turns up slightly from 3.9X to 4.0X. Days sales outstanding (DSOs) were around 67 days, down from 70 days in the June quarter. The cash and short-term investments balance increased $51.6 million to around $1.01 billion, with the company generating $293 million from operations. Garmin spent around $12 million on capex, yielding a free cash flow of around $281 million. Garmin has no long-term debt, and long-term liabilities total $249 million.

Guidance

Management did not provide guidance for the next quarter. However, it did say that PND pricing would weaken in the fourth quarter due to promotional activities, although volumes are expected to be up 40-50% (in-line with normal seasonality). The outdoor/fitness business is expected to be flat sequentially in the fourth quarter. The aviation segment is expected to continue, although year-over-year comparisons are expected to improve. The marine segment is expected to be up sequentially from the seasonally down third quarter.
Read the full analyst report on "GRMN"
Zacks Investment Research

Kimco Realty’s FFO Declines – Analyst Blog

Zacks Market Commentaries — Thu, 05 Nov 2009 16:29:14 +0000

Kimco Realty Corporation (KIM), a real estate investment trust (REIT) operating the largest portfolio of neighborhood and community shopping centers in North America, has reported a decline in third quarter 2009 FFO (fund from operations) to $112.6 million or 30 cents per share from $176.9 million or 68 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

The year-over-year decrease in FFO was due to the negative impact of non-cash impairments and charges related to early debt repayment. Excluding the one-time charges, FFO for the quarter was $117.9 million or 31 cents per share compared to $182.8 million or 70 cents per share in the year-ago period.

Overall occupancy in Kimco’s combined shopping center portfolio was 92.4% at quarter end. In the U.S. portfolio, occupancy was 91.9%. During the quarter, Kimco executed a total of 634 leases spanning 2.1 million square feet, out of which 342 were new leases (1.0 million square feet) and 292 were lease renewals (1.1 million square feet). About 426 leases totaling 1.7 million square feet were executed in the U.S. portfolio – a 42% increase on square footage basis year-over-year.

Same-store net operating income (NOI) decreased 3.6% during the quarter year-over-year, primarily due to bankruptcies of Linens N Things, Circuit City and Value City. Same-store leasing spreads increased 1.3% in the U.S. largely due to a 2.1% increase for lease renewals, partially offset by a 0.2% decline for new leases.

During the quarter, Kimco realized $10.7 million of fee income from its investment management business. The company acquired the remaining 90% stake in one of its joint venture property for $23 million during the quarter. Subsequent to the end of the quarter, Kimco also acquired the remaining 85% interest in six unencumbered properties in Portland, Oregon, from its joint venture partner Prudential Real Estate Investors for $48 million.

Kimco monetized $23 million in mortgage receivables during the quarter through debt repayment of two mortgages. In addition, the company also liquidated its investments totaling $41 million in marketable securities in Burlington Coat Factory, Duane Reade, Innvest Real Estate and Toys R Us. Also during the quarter, Kimco issued $300 million of 10-year unsecured senior notes for net proceeds of $297.3 million, the bulk of which was utilized to repay unsecured term loan scheduled to mature in Apr 2011.

For full year 2009, Kimco anticipates FFO before non-recurring items in the range of $1.30 − $1.33 per share, with an expected occupancy of approximately 92% in the U.S. portfolio.
Read the full analyst report on "KIM"
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Zacks Analyst Blog Highlights: Baker Hughes Inc., BJ Services, Teva Pharmaceutical Industries Ltd., Mylan and Comcast Corp. – Press Releases

Zacks Market Commentaries — Thu, 05 Nov 2009 12:15:32 +0000

For Immediate Release

Chicago, IL – November 5, 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: Baker Hughes Inc. (BHI), BJ Services (BJS), Teva Pharmaceutical Industries Ltd. (TEVA), Mylan (MYL) and Comcast Corp. (CMCSA).

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Here are highlights from Wednesday’s AnalystBlog:

Baker Hughes Misses Estimates

Baker Hughes Inc. (BHI) reported its third quarter results of 26 cents per share, well below the Zacks Consensus Estimate of 36 cents and year-earlier quarter earnings of $1.39. Before adjusting one-time items, earnings were 18 cents per share.

Though the company’s results came in below expectations due to lower activity levels in all geographical regions, fundamentals remain strong as the North American gas-directed drilling gain traction and benefits from the pending BJ Services (BJS) acquisition are expected.

Revenue from Baker Hughes’ Oilfield operations was $2.23 billion, down 26% from the year-ago quarter and 4% from the previous quarter. Pre-tax operating profits decreased nearly 72% year-over-year and nearly 22% sequentially to $187 million. Pre-tax operating margin for the quarter was 8%, compared to 22% in the year-ago quarter and 10% in the previous quarter.

Teva Reports Strong Quarter

Teva Pharmaceutical Industries Ltd. (TEVA) reported earnings of 89 cents in the third quarter of 2009, up 16% from the year-ago period and a cent above the Zacks Consensus Estimate. Strong sales of Copaxone and in the respiratory business helped drive earnings in the reported quarter.

Net sales increased 25% to $3.55 billion, with the Barr acquisition contributing to sales across different geographical segments. The strengthening U.S. dollar adversely impacted net sales by $160 million or 6%.

Revenue performance across key business segments was mixed. While the Pharmaceuticals Sales segment posted growth of 27% with revenues coming in at $3.4 billion, the active pharmaceutical ingredients (API) segment reported an 8% decline in growth with sales coming in at $136 million.

Pharmaceutical segment sales were driven by strong performances in the North American, European and International segments. The launch of generic versions of Ortho Tri-Cyclen Lo and Eloxatin and continued strong sales from existing products like generic versions of Adderall XR, Yasmin and Protonix helped North America sales grow 34% to $2,164 million.

Meanwhile, key branded product Copaxone continued to impress with global in-market sales increasing 38% to $776 million. While U.S. in-market sales increased 53% to $540 million, ex-U.S. in-market sales totaled $236 million, up 12%. Unfortunately, Mylan (MYL) is looking to launch a generic version of Copaxone.

Comcast Beats Zacks Estimate

Comcast Corp. (CMCSA) today reported its third quarter results. Net income was $944 million or 33 cents, compared to $771 million or 26 cents in the prior-year quarter. The company’s adjusted (excluding tax benefit and one time financing charges) EPS stood at 28 cents, well above the Zacks Consensus Estimate of 25 cents. Effective expense control and working capital management were the primary reasons for this solid performance.

Total revenues were $8.8 billion, up 3% year over year and mostly in line with the Zacks Consensus Estimate. Top-line growth was mainly attributable to the strong performance of both Cable and Programming segments.

Gross margin in the third quarter was 60.3%, compared to 60.9% in the year-ago quarter. The operating margin was 37.8% in the reported quarter, remains same year over year. For the third quarter, Comcast declared the dividend of $0.07 per common share, compared to $0.06 in the year-ago quarter. During the same quarter, the company repurchased 16.1 million common shares for total consideration of $250 million.

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Censoring The Census

Robert Amsterdam — Thu, 05 Nov 2009 11:50:57 +0000

As many frequent readers of the Russian media would attest, retrieving accurate data pertaining to any sensitive topic can prove difficult. It is thus reassuring to see that Russia has agreed to hold its census next year, at a cost...

Harbin Electric Inc. – Value – Zacks Rank Buy

Tracey Ryniec — Thu, 05 Nov 2009 05:00:00 +0000

Harbin Electric, Inc. (HRBN) is growing quickly as it takes full advantage of the Chinese stimulus plan. Harbin has a PEG ratio of just 0.78.

Company Description

Harbin Electric is a Chinese manufacturer of electric motors, including linear motors, automobile specialty micro-motors and industrial rotary motors. It operates 3 manufacturing facilities in China but has both domestic and international customers.

Acquired Xi'an Simo Motor Group

On Oct 19, the company announced that its subsidiary had completed the acquisition of Xi'an Simo Motor Inc., a rival Chinese electric motor manufacturer with a specialty in industrial rotary motors. Xi'an employs 2,000 people.

Harbin agreed to pay a purchase price equal to no less than 6 times and no more than 8 times the 2008 audited net profits of Simo Motors.

2009 Zacks Consensus Estimate Climbs

Harbin is expected to report third quarter results on Nov 10. Ahead of the number, the third quarter Zacks Consensus Estimate has been holding firm at 31 cents over the last 60 days.

The 2009 Zacks Consensus has jumped 11.3% to $1.28 per share over the last month. Analysts are also bullish on 2010, projecting a 30.98% increase in EPS to $1.67.

Revenue Jumped 60% in the Second Quarter

Despite the continued slowdown in North America in the second quarter, which is where Harbin has the majority of its international business, the company still surprised on the Zacks Consensus Estimate by 22.22%. Earnings per share were 33 cents compared to the Zacks Consensus of 27 cents.

Revenue climbed to $38.36 million from $23.96 million in the second quarter of 2008. Revenue also climbed 25% from the first quarter of 2009.

The company is getting a boost from the Chinese stimulus which helped fuel strong sales of industrial rotary motors. It also received a $1.17 million grant from the Chinese government to support its linear motor driven subway train project.

Value Fundamentals

Harbin Electric is a Zacks #1 Rank (strong buy) stock. It has attractive value fundamentals with a forward P/E of 14 and a price-to-book ratio of 2.34. The company has an tremendous 5-year average return to equity (ROE) of 33.30%.

Zacks Investment Research