The Zacks Analyst Blog Highlights: Arris Group, Google, Comcast, Time Warner Cable and Xcel Energy

Zacks

For Immediate Release
 
Chicago, IL – October 23, 2013 – 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 Arris Group Inc. (ARRS-Free Report), Google Inc. (GOOG-Free Report), Comcast Corp. (CMCSA-Free Report), Time Warner Cable (TWC-Free Report) and Xcel Energy Inc. (XEL-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:

Arris Enhances Product Portfolio
 
Arris Group Inc. (ARRS-Free Report) – a global technology leader in the development of advanced cable telephony and next-generation high-speed data network – has launched ARRIS SE-7000 encoder. The introduction of SE-7000, a fourth-generation video compression system, will  help content developers to create High Efficiency Video Coding (:HEVC) technology.

The encoder will reduce bandwidth requirements by nearly 50% and will also deliver live HEVC streaming over the MPEG2 TS standard. Additionally, the technology will support both HEVC and Advanced Video Coding (:AVC) streamings, and  IP and baseband SDI inputs.

Increased demand for high resolution video content has resulted in huge bandwidth requirements. Thus, the launch of SE-7000 will facilitate the delivery of more videos at limited bandwidth through wireless, DSL or DOCSIS networks.

Arris recently acquired the cable set-top box business of Motorola Mobility, a subsidiary of Google Inc. (GOOG-Free Report), for a total consideration of $2.35 billion. The acquisition of will help Arris attain a strong foothold in the video offerings market.

In the second quarter of 2013, Arris’ total revenue was $1,000.4 million, up 186.4% year over year. The Customer Premises Equipments (CPE) segment of Arris generated $663 million of total revenue, up by a whopping 344% over the prior-year quarter. The company stated that 90% of its total CPE shipment was for the DOCSIS 3.0 network.

Comcast Corp. (CMCSA-Free Report) and Time Warner Cable (TWC-Free Report) are the largest customers of Arris and have together contributed 43% of Arris’ total revenue. Hence, we believe that by launching such innovative products the company will continue to drive its top-line growth.

Currently, Arris Group Inc. carries a Zacks Rank #3 (Hold).
 
Will Xcel (XEL) Keep Its Earnings Streak Alive?

We expect utility service provider Xcel Energy Inc. (XEL-Free Report) to surpass our expectations when it reports third quarter 2013 earnings results before the market bell on Oct 24.
Why a Likely Positive Surprise?

Our proven model shows that Xcel Energy is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.32%. This is a meaningful and leading indicator of a likely positive earnings surprise for shares.

Zacks Rank #3 (Hold): The company currently retains a Zacks Rank #3 (Hold). Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.  

The combination of Xcel Energy’s Zacks Rank #3 and +1.32% ESP makes us confident of an earnings beat this quarter.

What is Driving the Better-than-Expected Earnings?

Xcel Energy delivered straight earnings surprises in the last four quarters with an average beat of 7.20%. We believe the company will maintain its earnings streak on the back of positive rate changes in Colorado, Wisconsin, South Dakota and Texas businesses.

In addition, the service initiation of Xcel Energy’s Monticello nuclear plant after the outage is anticipated to boost operations. The currently favorable renewable climate in the U.S. will also support the company’s unrelenting green energy expansion efforts. Furthermore, Xcel Energy is poised to benefit from the progress of its CapX2020 transmission project.

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