SINA, Panera Bread, Sprint, Google and Apple highlighted as Zacks Bull and Bear of the Day

Zacks

For Immediate Release

Chicago, IL – November 15, 2013 – Zacks Equity Research highlights SINA (SINA-Free Report) as the Bull of the Day and Panera Bread (PNRA-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Sprint Corporation (S-Free Report), Google Inc. (GOOG-Free Report) and Apple Inc. (AAPL-Free Report).

Here is a synopsis of all five stocks:

Bull of the Day:

SINA (SINA-Free Report) is one of the largest online media portals in China, providing users with a broad selection of information, communications and entertainment choices, while providing advertisers and content holders with a massive audience to target with online advertising.

This week the company reported strong 3Q13 results above expectations, and provided robust 4Q13 revenue guidance fueled by Weibo, their hugely successful "microblogging" site that is often compared to a hybrid of Twitter and Facebook.

SINA reported third quarter earnings of 35 cents per share that were well ahead of the Zacks Consensus Estimate of 17 cents and the year-ago figure of 8 cents. SINA’s partnership with the Alibaba group contributed significantly to the company’s overall results.

Weibo total revenue was $53.4 million in the quarter, 30% of SINA's $179.9 million revenue and more than double Weibo revenue of $23.6 million in 3Q12. Weibo ad revenue was $43.7m, up 119% YoY and 46% QoQ.

Weibo’s daily active user (:DAU) base increased 11.2% to 60.2 million from the month of June to September. This was much better than 8.2% growth reported during the March-June period.

SINA expects revenues for the fourth quarter of 2013 to be in the range of $190.0 million and $194.0 million. Advertising revenues are expected in the range of $160.0 million–$162.0 million, while non-advertising revenues are projected in the range of $30.0 million–$32.0 million.
 
Bear of the Day:

The Panera Bread (PNRA-Free Report) growth story seems to keep hitting the skids this year. After a second-quarter miss and lower guide dropped the stock from $185 to $170 in late July, the name has consistently been a Zacks #4 Rank Sell, taking shares down further below $160.

Then the company's 3rd-quarter report brought little better news, with a miss on revenues and further weak guidance. In their late October message to investors, management revealed they expect Q4 earnings in the range of $1.91 to $1.97, down from previous estimates of $2.05 to $2.11.

Systemic Problems

In the conference call, management also shared that research indicates rising customer dissatisfaction with order accuracy and store level comfort and cleanliness. The company announced that they are responding with a series of initiatives, including...

1. Increased store labor hours that will add roughly 60 basis points to store cost structure in the near-term

2. Technology investments designed to allow store managers more time to “work the floor” and interact with customers, monitor cleanliness, etc.

These fixes explain that the cut in outlook is also due to an expectation of lower operating margins. And even though current earnings guidance reflects annual growth of 9%–13%, Panera anticipates Q4 company-owned comparable sales growth to be flat to up 2%, lower than the prior estimates of 3%–5%.
 
Additional content:
 
Sprint Launches HTC One Max
 
Sprint Corporation (S-Free Report) recently announced the launch of HTC One Max on its network this week.  The new phone features a 5.9-inch display and a Snapdragon 600 processor, and operates on Google Inc. (GOOG-Free Report) Android 4.3. We believe that this addition to Sprint’s product portfolio will add to its service revenues and accelerate the demand for its LTE services.

Sprint has a rich collection of smartphones including Android, tablets, USB modems, hotspots and routers, all of which are in vogue. Smartphones represented 92% of Sprint’s post-paid sales in the third quarter. Recently, the company also announced that it will offer Samsung Galaxy Mega on its network attracting customers to its 4G services. Sprint also activated over 1.4 million Apple Inc. (AAPL-Free Report) iPhones in the third quarter, 40% of which belong to new customers.

Over the long term, the company expects iPhone to generate $7–$8 billion in profits with the inclusion of 1–1.2 billion gross subscribers $6–$6.8 billion in profitability. Overall, the company sold around 5 million smartphones in the third quarter. Further, Sprint in collaboration with A&T Systems – a U.S.-based IT and telecom infrastructure provider –has received a mobile services contract from the U.S. Department of Veterans Affairs under which it will offer an array of wireless devices. We believe that continued growth in smartphone penetration will foster average revenue per user (:ARPU) improvement on the Sprint platform as well as result in lower churn rates given the contract package that is sold along with these smartphones.

Inaddition to smartphones and other equipment, the company is also focusing on improving its service plans with value added data plans that can accelerate post-paid wireless subscriber growth and ARPU with an improving churn rate. With regard to prepaid, Sprint’s multi-brand like Boost Mobile, Assurance Wireless and Virgin Mobile as well as innovative offers like $50 Monthly Unlimited plan with Shrinkage, Beyond Talk plans and Broadband2Go are contributing significantly to subscriber growth.

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