For Immediate Release
Chicago, IL – August 1, 2018 – Zacks Equity Research highlights Helix Energy Solutions HLX. as the Bull of the Day, MarineMax HZO as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple AAPL.
Here is a synopsis of all three stocks:
Bull of the Day:
As energy prices have rallied sharply off their 2017 lows, stocks in the energy sector have gone along for the ride. Once among the most at-risk stocks, offshore energy companies are thriving once again. That doesn’t mean that you can just go out there and buy any energy stock you lay your hands on. By finding stocks in the industry with positive earnings estimate revisions, you can pinpoint the stocks that analysts are most bullish on. This can provide you with a winning edge.
One such stock is today’s Bull of the Day Helix Energy Solutions.Helix Energy Solutions Group, Inc., an offshore energy services company, provides specialty services to the offshore energy industry primarily in Brazil, the Gulf of Mexico, North Sea, the Asia Pacific, and West Africa regions. The company operates through three segments: Well Intervention, Robotics, and Production Facilities. The company engineers, manages, and conducts well construction, intervention, and abandonment operations in water depths ranging from 200 to 10,000 feet; and operates remotely operated vehicles (ROVs), trenchers, and drills for offshore construction and well intervention services.
Right now, the company is a Zacks Rank #1 (Strong Buy). The reason for the favorable Zacks Rank lies in the recent activity regarding earnings estimates from analysts. Over the last week alone, analysts have increased their earnings estimates for the current quarter, current year, and next year. The bullish sentiment has pushed up our Zacks Consensus Estimate from 5 cents to 12 cents for the current quarter, helping to move the current year consensus up from 15 cents to 18 cents.
A quick look at the Price, Consensus and EPS Surprise chart shows the healthy earnings trend. The company has beat or met earnings estimates for twelve consecutive quarters. Last quarter’s number came in at 12 cents, doubling consensus estimates calling for just 6 cents.
Bear of the Day:
With the US economy firing on all cylinders, you’d expect cyclical consumer trends to show some strength. It’s during times like this where people go out there and spend money on things like new cars, recreational vehicles, and boats. Confidence in the economy allows people to splurge on purchases they wouldn’t make during economic downturns. If a company is in business that should be booming, then you’d expect analysts to be increasing their earnings estimates. If the opposite is happening, then maybe investors can make easier money elsewhere.
Today’s Bear of the Day is a company which should be rocking and rolling in this market but flat out isn’t. I’m talking about Zacks Rank #5 (Strong Sell) MarineMax. MarineMax, Inc. operates as a recreational boat and yacht retailer in the United States. It sells new and used recreational boats, including pleasure boats, such as sport boats, sport cruisers, sport yachts, and other yachts; motor yachts; convertible yachts; pleasure boats; pontoon boats; fishing boats; ski boats; and jet boats. The company also offers marine parts and accessories that comprise marine electronics; dock and anchoring products consisting of boat fenders, lines, and anchors; boat covers; trailer parts; water sport accessories, such as tubes, lines, wakeboards, and skis; engine parts; oils; lubricants; steering and control systems; corrosion control products; service products; accessories, including propellers and instruments; and a line of boating accessories comprising life jackets, inflatables, and water sports equipment.
The reason for the unfavorable Zacks Rank is the string of earnings estimate revisions to the downside following their last earnings report. Over the last week, five analysts have cut their earnings estimates for the current quarter, while three have done so fur the current year. That’s sent the Zacks Consensus Estimate for the current quarter down from 27 cents to 25 cents, while the current year number has dropped from $1.56 to $1.51.
Apple (AAPL) Tops Q3 Estimates, Services Up 31%
After Tuesday's closing bell, Apple came out with quarterly earnings of $2.34 per share, beating the Zacks Consensus Estimate of $2.17 per share. This compares to earnings of $1.67 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 7.83%. A quarter ago, it was expected that this maker of iPhones, iPads and other products would post earnings of $2.69 per share when it actually produced earnings of $2.73, delivering a surprise of 1.49%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Apple, which belongs to the Zacks Computer - Mini computers industry, posted revenues of $53.27 billion for the quarter ended June 2018, surpassing the Zacks Consensus Estimate by 1.71%. This compares to year-ago revenues of $45.41 billion. The company has topped consensus revenue estimates four times over the last four quarters.
iPhone & Services
Apple’s total iPhone unit sales hit 41.300 million, which marked a roughly 1% climb from the 41.026 million smartphones Apple sold in the year-ago quarter. iPhone unit sales climbed by approximately 3% in Apple’s fiscal Q2 to touch 52.217 million.
Apple’s total iPhone revenues are surged 20% to $29.906 billion in Q3. Investors will note the significant difference between total unit sales growth and iPhone revenue expansion illuminates just how much the high-priced iPhone X has helped Apple. Last quarter, iPhone revenues hit $38.032 billion, which represented a 14% climb.
Apple’s growing Services business, which features iTunes, AppleCare, Apple Pay, and Apple Music, saw its revenues climb by 31% to hit $9.548 billion. Last quarter, Services revenues also jumped by 31% to reach $9.190 billion.
Looking ahead, Apple now expects to post fiscal fourth-quarter revenues between $60 billion and $62 billion, which tops our current $58.66 billion estimate.
Apple saw its stock price pop 2.37% to hit $194.80 per share as of 3:47 p.m. Eastern.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Apple shares have added about 12.2% since the beginning of the year versus the S&P 500's gain of 4.8%.
What's Next for Apple?
While Apple has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Apple was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $2.60 on $58.66 billion in revenues for the coming quarter and $11.41 on $260.36 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Mini computers is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
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