The Zacks Analyst Blog Highlights: Telefonica, Dell, France Telecom, Vodafone Group and CME Group

Zacks


For Immediate Release

Chicago, IL – May 13, 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 Telefonica S.A. (TEF), Dell Inc. (DELL), France Telecom (FTE), Vodafone Group Plc. (VOD) and CME Group Inc. (CME).

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Here are highlights from Friday’s Analyst Blog:

Telefonica Signs Deal with Dell

Spanish telecom operator, Telefonica S.A. (TEF) has struck a deal with Dell Inc. (DELL) to offer mobile connectivity solutions for its Windows 7 and Windows 8-based devices throughout Europe by means of Dell NetReady solution.

Dell is already using Telefónica’s mobile service. Therefore by connecting to Dell NetReady technology, the customers can easily connect their devices to the Telefónica’s pay-as-you-go Internet plan.

The new bundled service, will serve corporate users better as they can easily access the network whether in office or away by just a click of a button. The plan is also made flexible starting from 30 minutes up to 1 a month with two different rate plans.

Telefonica is facing intense competition from the likes of France Telecom’s (FTE) Orange mobile brand and Vodafone Group Plc. (VOD). In order to safeguard its position in the European region the company is continuously upgrading its 3G mobile broadband networks –– High Speed Packet Access Plus (HSPA+) and Dual Cell HSPA. The company is further working to deploy LTE services in urban areas and also taking initiatives to adopt new technologies like Voice over LTE (VoLTE) to drive its top line.

The company has undertaken several efforts to enhance efficiency across European markets such as removal of handset subsidies in Spain, gradual reduction of subsidies in the U.K., network sharing agreement in the U.K. and Mexico and redundancy program in Spain. Such initiatives would lead to further savings and boost profit in the coming years.

Telefonica S.A. currently has a Zacks Rank #3 (Hold).

 

CME Group Upped to Neutral

We have upgraded derivative exchange – CME Group Inc. (CME) to Neutral based on some improvement in volumes and strict expense control in the first-quarter of 2013. However, top line continued to remain weak.

Why the Upgrade?

Estimates for CME Group have witnessed a marginal decline since its first-quarter 2013 results on May 2. The company’s first-quarter earnings of 73 cents a share were at par with the Zacks Consensus Estimate, while total revenue of $718.6 million topped the Zacks Consensus Estimate of $714 million.

Nonetheless, both earnings and revenues lagged the year-ago results by 8.8% and 7.2%, respectively. Overall, CME Group delivered positive earnings surprises in all of the last 4 quarters with an average beat of 5%.

While average daily volume inched up 1% year over year, total operating expenses declined 3.2% and non-operating expenses were flat. However, clearing and transaction fees, accounting for about 83% of the total revenue, decreased 4.5% year over year, whereas market data and information services decelerated 29.2%. A higher tax rate also marred the bottom line.

Following the release of the first-quarter results, the Zacks Consensus Estimate for 2013 dipped 0.6% to $3.13 per share. The Zacks Consensus Estimate for 2014 also inched down 0.8% to $3.62 per share. With the Zacks Consensus Estimates for both 2013 and 2014 going only marginally down, the company now has a Zacks Rank #3 (Hold).

What is the cause for the strong positive bias on the company? While the top line is facing challenges from the macroeconomic volatility and intense competitiveness and will recover at its pace, CME Group is initiating a disciplined expense management. Total expenses are further projected to be below 5% for 2013.

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Read the analyst report on TEF

Read the analyst report on DELL

Read the analyst report on FTE

Read the analyst report on VOD

Read the analyst report on CME

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