The Zacks Analyst Blog Highlights: BlackBerry, T-Mobile U.S., Apple, Google and Paychex

Zacks

 For Immediate Release

Chicago, IL – September 30, 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 BlackBerry Limited (BBRY-Free Report), T-Mobile U.S. Inc. (TMUS-Free Report), Apple Inc. (AAPL-Free Report), Google Inc. (GOOG-Free Report) and Paychex Inc. (PAYX-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday’s Analyst Blog:

T-Mobile Ends BlackBerry Retail

The difficulties of BlackBerry Limited (BBRY-Free Report) continues with T-Mobile U.S. Inc. (TMUS-Free Report), one of the big four U.S. telecom carriers, deciding to stop stocking BlackBerry smartphones in its stores. The news came a couple of days after the Canadian handset manufacturer agreed to divest its entire stake to Toronto-based insurance company Fairfax Financial Holdings Ltd. for $4.7 billion, or $9 per share.   

T-Mobile U.S. announced that it will continue to endorse BlackBerry devices and take customer orders at its retail stores. However, the smartphones will be shipped directly to customers instead of giving them an option to handpick them at its stores. T-Mobile U.S. will continue to sell BlackBerry smartphones online.

Shareholders of BlackBerry reacted negatively since the news came out as the stock lost 6.8% of its value on Nasdaq. T-Mobile U.S. on the contrary had a better outing on the bourse as its stock price gained 2.68% since Wednesday.

T-Mobile’s decision does not come as surprise as BlackBerry reported dismal preliminary results for the second quarter of fiscal 2014. For the third quarter, BlackBerry expects to report a GAAP net loss of nearly $950 million to $995 million or around $1.81 to $1.90 per share along with a 45% annualized decline in revenue.  

BlackBerry, which is known for its secured email service continues to lose market share in a crowded smartphone market dominated by Apple Inc.’s (AAPL-Free Report) iPhone and Google Inc.’s (GOOG-Free Report) Android-based devices. This quarter hasn’t been any expectation as the company is expected to report smartphone sales of 3.7 million, down 50% year over year.

Unlike T-Mobile, two of its bigger rivals AT&T Inc. and Verizon Wireless have decided to sell BlackBerry devices from their retail outlets. It is believed that AT&T and Verizon Wireless could follow the path of T-Mobile if the beleaguered handset manufacturer fails to improve its performance.

Losing T-Mobile is apparently just another of the many setbacks that BlackBerry is currently facing. But we believe that losing a carrier partner like T-Mobile is a grave concern as it will eventually impact its sales, given its expanded network.

Currently, T-Mobile U.S. carries a Zacks Rank #3 (Hold).

Is Paychex (PAYX) Poised to Beat Earnings?

Payroll and human resource solutions provider, Paychex Inc. (PAYX-Free Report), is slated to release first-quarter 2014 results on Sep 30, 2013, after the closing bell. It is noteworthy that in the last quarter, Paychex recorded a positive earnings surprise of 2.7%. The company has a trailing four-quarter average positive surprise of 2.57%. Let us see how things are shaping up for this quarter.

Growth Factors this Past Quarter

Paychex’s fourth quarter witnessed growth across its services segment, primarily aided by Human Resource Services revenues. Growth in Human Resource Services revenues was driven by client growth and price increases. Also, increases in checks per payroll and revenue per check positively impacted Payroll service revenues. Moreover, the client retention rate was satisfactory.

Moreover, the company’s modest revenue growth supported by better cost management and capacity utilization boosted operating performance. However, Paychex’s earnings remained flat on a year-over-year basis as the company incurred higher tax provision for a state income tax settlement.

Earnings Whispers?

We are encouraged by Paychex’s product development and focus on building sales force to support revenue growth. Moreover, Paychex’s focus on small and mid sized business looking for HR solutions could provide the company with opportunities. However, the macroeconomic sluggishness coupled with growing competition from Intuit and Automatic Data Processing could be an overhang.

The Zacks Consensus Estimate for the first quarter stands at 43 cents with no estimate revisions witnessed in the last 60 days. The stock carries a Zacks Rank #3 (Hold).

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
 
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