The Zacks Analyst Blog Highlights: Fiat, Ford Motor, General Motors, Lions Gate Entertainment and Time Warner

Zacks

For Immediate Release

Chicago, IL – October 2, 2012 – 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 Fiat SpA (FIATY), Ford Motor Co. (F), General Motors Company (GM), Lions Gate Entertainment Corporation (LGF) and Time Warner Inc. (TWX).

 

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Here are highlights from Monday’s Analyst Blog:

 

CAW Ratifies Chrysler Contract

 

The Canadian Auto Workers (CAW) union has ended this year’s talk with the U.S. automakers by ratifying the 4-year agreement with Chrysler Group LLC, majority-owned by Fiat SpA (FIATY). About 90% of union members have voted in favor of the deal.

Among the Detroit Big Three, Chrysler operates the largest facility in Canada. The agreement covered 8,000 workers employed by the company in Ontario including vehicle-assembly plants in Brampton, near Toronto, and Windsor, located in Southwestern Ontario.

These plants produce some of the company’s top-selling lineups. The Windsor plant manufactures Dodge Grand Caravan and Chrysler Town & Country minivans. They were the fourth and fifth best selling models of the company last year.

The CAW union has already ratified agreements with Ford Motor Co. (F) and General Motors Company (GM) recently. The agreement with Chrysler followed the same pattern as the GM and Ford.

Under the agreement, workers will be paid 60% (instead of 70% previously) of the highest hourly wage rate of C$33.89 (US$34.74), which means $20.33. The starting wages would take 10 years to reach the highest hourly rate instead of 6 years.

The deal also included lump-sum payments of C$2,000 ($2,050) in lieu of raises and a C$3,000 ($3,076) ratification bonus. Chrysler also offered protection of current pension benefits to existing workers and job creation in all locations.

According to the Detroit automakers, Canada is considered the most expensive country in the world for manufacturing cars. The CAW union represents about 21,000 workers in Canada and contributes 16% of vehicle production in North America.

 

 

Lions Gate’s New Credit Facility

 

Lions Gate Entertainment Corporation (LGF) – producer and distributor of motion pictures for theatrical and straight-to-video release, and television programming for cable and broadcast networks – has recently announced a new five-year revolving credit agreement with a consortium of world’s leading investment bankers.

The new $800 million revolving credit line facility will help Lions Gate enhance its financial flexibility and demonstrate its healthy rapport with the financial communal. Moreover, management said that the new facility signifies the importance of its franchises and filmed entertainment library.

Lions Gate has also notified that the new facility has replaced the earlier $340 million credit facility and this reflects the growth of the company’s borrowing base. The extended revolving facility will assist the company to develop, implement its strategic plans, and to focus on long-term financial goals.

The company has not mentioned any particular purpose for utilizing the funds under the new credit facility.

Under a revolving credit facility, a company can borrow again once it repays all the dues under the old credit facility. The company may utilize this fund for general corporate purposes, including repayment of outstanding commercial papers, working capital and capital investment or acquisitions.

The company’s production and distribution capacity is largely benefited by Summit's film operations, which was acquired in January 2012. In addition, it will help Lions Gate to emerge as a leading international sales group by broadening its global reach.

The company has announced several releases, such as Summit's The Twilight Saga: Breaking Dawn – Part 2, scheduled to release on November 16, 2012, and the next installment of The Hunger Games franchise, The Hunger Games: Catching Fire, will be released on November 22, 2013.

To grab its share of box office receipts, Lions Gate competes with other major studios, such as Fox Entertainment Group, Paramount Motion Pictures Group and Time Warner Inc. (TWX).

Lions Gate retains a Zacks #3 Rank that translates into a Hold rating over the next 1-3 months, reflecting the strategic endeavors undertaken by the company to put itself on the right path and correlates with our long-term ‘Neutral’ recommendation on the stock.

 

 

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Read the analyst report on FIATY

Read the analyst report on F

Read the analyst report on GM

Read the analyst report on LGF

Read the analyst report on TWX

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