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Ferrari, Cirrus Logic, Cisco and MGM highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research
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For Immediate Release

Chicago, IL – February 14, 2018 – Zacks Equity Research Ferrari NV RACE as the Bull of the Day, Cirrus Logic CRUS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Cisco Systems CSCO and MGM Resorts MGM.

Here is a synopsis of all four stocks:

Bull of the Day:

Headquartered in Maranello, Italy, Ferrari NV designs, manufactures, and sells sports cars, like the 488 Spider, the 488 GTB, and the 812 Superfast. Ferrari operates throughout Europe, the Americas, the Middle East, India, Africa, Greater China, and in the Asia-Pacific region.

Shares Surge on Strong Q4 & Fiscal 2018 Earnings

Ferrari reported fourth-quarter adjusted EBITDA of €274 million ($314 million), which came in line with the analyst consensus and grew 6% year-over-year. Sales were up 1% from the prior year period to €845 million.

One thing that benefitted Ferrari was strong sales in models that had 12-cylinder engines, as these 12-cylinder cars are higher-priced and more profitable than those with an 8-cylinder engine.

Overall shipments jumped 10.2% in 2018, but 12-cylinder sales rose an impressive 19.6%; 8-cylinder sales only increased 7.3% in comparison.

Notably, deliveries in China, Hong Kong, and Taiwan were up a combined 6% for the fourth quarter and 13% for fiscal 2018. This is in contrast to some Western luxury brands that saw sales dip in Q4.

The company’s “net industrial debt” came to €340 million at the end of 2018, which was down from €473 million at the end of 2017. Industrial few cash flow hit €117 million, up 900% from Q4 2017.

Bear of the Day:

Cirrus Logic is a semiconductor company that provides products for the world’s top smartphones, tablets, digital headsets, wearables and emerging smart home applications. Its products span the entire audio signal chain, and is known for producing high-performance, low-power ICs for audio and voice signal processing applications.

Q3 Earnings Beat, But Fall YoY

For Cirrus’ third quarter, earnings and revenues did beat the Zacks Consensus Estimate, but both fell significantly year-over-year (declines of 42.8% and 32.8%, respectively).

Additionally, revenue from portable audio products fell 34.2% from the prior-year quarter, while revenue from nonportable audio and other products was down 19% year-over-year.

The biggest concern for Cirrus is Apple and the decline in demand for iPhones. The company generated 83% of its revenue last quarter from the tech giant, who is its largest customer.

If the demand for iPhones don’t pick back up—and it’s not looking like that will happen any time soon—then Cirrus will have a difficult time finding that growth again.

Cirrus did end Q3 with $444 million in cash, which was up from $396 recorded at the end of Q2.

Cisco Beats (Like Always), Plus MGM

Silicon Valley tech major Cisco Systems has reported fiscal Q2 2019 numbers after the bell Wednesday, and the results were routinely better than expected. Earnings of 73 cents per share topped the Zacks consensus by a penny, on $12.45 billion in quarterly sales that outperformed the $12.40 billion our analysts were looking for. The Zacks Rank #3 (Hold)-rated company ahead of the earnings release has not missed bottom-line expectations since we recalibrated results for technology firms in calendar Q4 of 2015.

What’s pushing shares of Cisco northward in late trading is the company guidance for its fiscal Q3 (ending April), toward an earnings range of 76-78 cents per share on revenues expected to grow 4-6% year over year. The Zacks consensus for these figures had been 75 cents per share on revenue growth expected at 2-3%. Also, Cisco has raised its dividend by 6% and announced a $15 billion share buyback program.

Shares had already gone back up toward multi-year highs prior to this earnings report, and now we’re seeing a new bid up roughly 3.7% in the after-market.

MGM Resorts also surpassed expectations by a penny to 14 cents per share, on revenues of $3.05 billion in the quarter which took out the Zacks consensus estimate of $2.95 billion. This Zacks Rank #3-rated company also increased its dividend yield, by 8%, on in-line China revenues and its Las Vegas segment which beat relatively easy year-over-year comps. MGM has only missed bottom-line estimates 3 times in the last 4 years.

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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
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Ferrari N.V. (RACE) : Free Stock Analysis Report
 
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