The Zacks Analyst Blog Highlights: Yahoo!, General Electric, Accenture, Crane and Honeywell International

Zacks

For Immediate Release

Chicago, IL – April 17, 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 Yahoo! Inc. (YHOO), General Electric Company (GE), Accenture plc (ACN), Crane Co. (CR) and Honeywell International Inc. (HON).

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Here are highlights from Tuesday’s Analyst Blog:

Yahoo Remains a Work in Progress

 

Yahoo! Inc. (YHOO) reported Q1 fully-diluted earnings per share of 34 cents (accounting for a restructuring reversal; the headline number was 38 cents per share) on $1.07 billion in revenues. This was a little light in sales, as the Zacks Consensus was for $1.1 billion, but Yahoo appears to have hit a homer on EPS.

...Yet the stock is down big in after-hours trading. So what gives?

A couple of the touchstones for Yahoo in its Q1 earnings report was guidance (which was a little less than expected) and whether search query numbers were still down (they were, by -11%). Also, Yahoo posted the worst year-over-year decline in display ads in more than two years.

So it would seem it pays to not judge a book by its cover. The after-market sure hasn't: shares of YHOO are down around 3.5% right now, following a 0.75% dip before the bell.

Alright then, so why the big earnings beat? Is it because Yahoo also decided to hereby report earnings minus stock-based compensation going forward, thereby throwing a monkey wrench into analysts' estimates from the past quarter? Not really, actually; this new accounting merely impacts what they call their non-GAAP comparison.

You want the real scoop on this impressive 36% positive earnings surprise? Check Yahoo's significant reductions in traffic acquisition costs (TAC). So although the company brought in slightly less on the revenue side in the quarter, they reduced TAC costs significantly -- a big plus.

It's also now commonplace for Yahoo to blow out quarterly estimates: over the previous 4 quarters, the company had averaged a 35% earnings beat. Also, analyst estimate revisions had all been to the upside over the past 7, 30 and 60 days. For this reason, Yahoo has earned a Zacks Rank #1 (Strong Buy).

Certainly Yahoo has many more boulders to push up the hill. But perhaps this after-market sell-off is a tad unwarranted, and may be a good opportunity to get in.

 

 

 

GE, Accenture JV Forays in Texas

 

In order to extend its geographic footprint, Taleris – a joint venture between GE Aviation, an operating unit of General Electric Company (GE) , and Accenture plc (ACN) – recently unveiled its new headquarter facility in Irving, Texas. The facility spanning 28,000 square feet of space is expected to house 100 employees within the first year of its operation.

Leveraging on the technological expertise and state-of-the-art equipment, Taleris provides all the requisite back-up support to airlines and cargo carriers across the world to improve operational efficiency through effective analysis of aircraft performance data, prognostics, and recovery. Taleris use proprietary algorithms to help the airlines take appropriate decision to pre-empt unscheduled maintenance, delays and cancellations that burden their exchequer billions of dollars each year.

With a roster of high-tech companies, Irving is a thriving business destination for Taleris. The city has ‘AAA’ ratings by Moody’s Investor Services and Standard and Poor’s for General Obligation Bonds owing to its large tax base, strong financial management policies, formal investment and reserve policies, and strong general fund reserves. In addition, the city also has AA1 ratings for Water and Sewer Bonds due to competitive combined utility rates and solid financial position. Consequently, Taleris expects that its new headquarters would benefit from the improved infrastructure facilities and other amenities to further develop its business.

General Electric is one of the largest and the most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content and industrial products, the company serves over 100 million customers worldwide.

Its segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital. Evendale-based GE Aviation Systems is a premier supplier of commercial and military jet engines and components. It also provides avionics, electric power, and mechanical systems for aircraft along with an extensive global service network to support these products.

General Electric currently has a Zacks Rank #3 (Hold). Other companies in the industry worth mentioning are Crane Co. (CR) and Honeywell International Inc. (HON), each carrying a Zacks Rank #2 (Buy).

 

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Read the analyst report on YHOO

Read the analyst report on GE

Read the analyst report on ACN

Read the analyst report on CR

Read the analyst report on HON

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