The Zacks Analyst Blog Highlights: Apple, Nokia, Amazon.com, Microsoft and SolarWinds

Zacks

For Immediate Release
 
Chicago, IL – January 02, 2014 – 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 the Apple Inc. (AAPL-Free Report), Nokia Corp. (NOK-Free Report), Amazon.com Inc. (AMZN-Free Report) Microsoft Corp. (MSFT-Free Report) and SolarWinds Inc. (SWI-Free Report).
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

Apple Persists with Samsung Sales Ban

In a recent move, Apple Inc. (AAPL-Free Report) has asked for a ban on the sale of products manufactured by Samsung Electronics Co. in the United States.

The company recently asked U.S. District Judge Lucy Koh in San Jose, Calif. to stall sales of 20 smartphones and tablets, which includes models such as Galaxy S 4G, and Galaxy Tab 10.1, which have been found to infringe Apple’s patent last year.

Although Apple’s bid for a sales ban on Samsung devices was rejected by Lucy Koh, a federal appeals court on Nov 18 cleared way for the iPhone maker to carry on with the injunction, which has been targeting Samsung’s products.

Samsung discontinued the sale of these models, which diminished Apple’s need to put an injunction on the same. The Federal Circuit court in Washington, in a recent statement, made it clear that Apple could modify its request to focus on infringement of patents covering smartphone features, which include multi-touch technology, an important issue in the 2012 trial.

However, the company cannot ask for block Samsung products for infringing patented designs. We believe that this is going to be a long drawn process, which will take some time to resolve. Previously, Apple won more than $290 million from Samsung in lieu of damages for a trial stemming from the same case in which Apple is pursuing the sales ban request.

Apple has always been entangled in various lawsuits involving companies such as Nokia Corp. (NOK-Free Report) and HTC. Apple has also fought legal battles against Amazon.com Inc. (AMZN-Free Report) and Microsoft Corp. (MSFT-Free Report).

More importantly, Apple has received unfavorable verdicts in a couple of cases from the International Trade Commission (ITC). So, the final verdict might go either way.
Apple currently has a Zacks Rank #3 (Hold).

SolarWinds Downgraded to Strong Sell
 
On Dec 31, 2013, Zacks Investment Research downgraded SolarWinds Inc. (SWI-Free Report) to a Zacks Rank #5 (Strong Sell).
 
Why the Downgrade?
 
The downgrade primarily reflects management’s cautious fourth-quarter guidance as well as declining profitability due to continuing investments across business (N-able and legacy products), increased hiring as well as higher spending on marketing activities.
 
Although SolarWinds reported a better-than-expected third quarter, management’s guidance failed to impress the market. For the fourth quarter of 2013, SolarWinds expects revenues in the range of $90.3 million–$92.2 million, up 23.0%–25.0% on a year-over-year basis.
 
The Zacks Consensus Estimate for revenues is currently pegged at $92.0 million, which tends toward the high end of management’s guidance.
 
However, new license sales within the U.S. Federal business are forecasted to decline over 60% sequentially. Uncertainty related to federal spending is expected to remain a headwind for top-line growth in 2014.
 
Management expects non-GAAP earnings between 33 cents and 34 cents per share for the fourth quarter, reflecting a meagre growth of 3.1% to 5.9% from the year-ago quarter. We believe higher operating expenses (in addition to higher expenses related to the Confio acquisition) will make it difficult for SolarWinds to attain this target in the fourth quarter.
 
SolarWinds expects full-year 2013 revenues in the range of $329.3 million–$331.2 million. The Zacks Consensus Estimate for revenues is currently pegged at $329.0 million, slightly lower than management’s guided range. Non-GAAP earnings per share are likely to be in the range of $1.56 to $1.57 for the full year.
 
Estimate Revision
 
The Zacks Consensus Estimate for fourth-quarter 2013 declined 6.5% (2 cents) to 29 cents over the last 60 days.
 
The Zacks Consensus Estimate for 2013 increased 3.8% (5 cents) to $1.35 per share over the last 60 days. However, the Zacks Consensus Estimate for 2014 plunged 15.8% (24 cents) to $1.28 per share over the same period.
 
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