For Immediate Release
Chicago, IL – October 25, 2013 – Zacks Equity Research highlights Netflix, Inc. ( NFLX- Free Report) as the Bull of the Day and Ruby Tuesday ( RT- Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Amazon ( AMZN- Free Report), eBay ( EBAY- Free Report) and Macy's ( M- Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Value investors hate it but momentum traders love it.
Netflix, Inc. ( NFLX- Free Report) just did it again, beating the Zacks Consensus Estimate for the 12th quarter in a row. This Zacks Rank #1 (Strong Buy) is expected to see triple digit earnings growth in 2013 and 2014.
Netflix calls itself an "Internet television network." Once known as a service that delivered DVDs to mailboxes it now offers streaming television and movie content to 40 million members in 41 countries.
On Oct 21, Netflix reported its third quarter results and kept its impressive earnings streak alive by beating the Zacks Consensus Estimate by $0.04.
Earnings were $0.52 compared to the consensus of $0.48.
The company hasn't missed on earnings since 2010 and only has 1 miss in the last 5 years.
In the U.S., subscriber net additions rose 1.3 million to 31.09 million members, up 11% from the third quarter of the prior year. The company got buzz from its new Orange is the New Black series and its Emmy win for the House of Cards series.
But it's still the regular television shows that are driving viewing. The largest percentage of viewing is from the exclusive complete season-after series it offers such as Breaking Bad, Walking Dead and Scandal.
Internationally, subscriber net additions gained 1.4 million to 9.19 million members. The number was boosted by entry into the Nordic market and the Netherlands. Additionally, there was a surge in low quality free trails from Latin America in September which should just temporarily boost the number.
Bear of the Day:
Ruby Tuesday's ( RT- Free Report) turnaround is going to take a while longer. This Zacks Rank #5 (Strong Sell) struggled in the recent quarter and is now expected to lose money in fiscal 2014.
Ruby Tuesday operates 778 company-owned or franchise Ruby Tuesday brand restaurants in 45 states, DC, Guam and 11 other countries.
On Oct 9, Ruby Tuesday reported its fiscal first quarter 2014 earnings. It was coming off of a big miss in the prior quarter and is in the midst of a turnaround.
The turnaround appears to be postponed. Ruby Tuesday missed the Zacks Consensus Estimate by 21 cents. Earnings were -$0.26 compared to the consensus of -$0.05.
Same-restaurant sales fell 11.4% at company-owned restaurants and 8.4% at franchise restaurants. This was below the company's expectations.
The company said that the quarter was challenging due to the failure of the economy to improve.
It is doing a core menu transformation to spice things up and has already added pretzel burgers and flatbreads.
Ruby Tuesday has stopped giving forward earnings guidance while it conducts this turnaround but it does anticipate same-restaurant sales to be down high single digits in the second quarter with sequential improvement in the third and fourth quarter.
Same-restaurant sales are expected to be positive by the fourth quarter, however.
With the big miss and the lackluster guidance, the analysts lowered both fiscal 2014 and fiscal 2015 estimates.
Zacks fiscal 2014 estimate plunged to -$0.48 from $0.14 just 90 days before. It is an earnings decline of 308% from fiscal 2013.
Online retailer extraordinaire Amazon ( AMZN- Free Report) reported earnings for its 3rd quarter 2013 after the bell Thursday. It also reported sales, which is the real story for the growth-driven behemoth. Amazon posted revenues of $17.09 billion for the quarter, up 24% year over year and considerably higher than the Zacks Consensus Estimate of $16.77 billion. Oh yeah, and it also posted a loss of $0.09 in earnings per share.
Typically, analysts were all over the map trying to guess what Amazon's earnings would be, and it's a pretty thankless task: the most recent range for the quarter went from positive 3 cents per share to negative 36 cents. You could drive a truck through a range like that. As it happens, the -$0.09 was exactly what the Zacks Consensus had estimated.
Don't fault the analysts for being clueless about Amazon's earnings, though -- with 8 million square feet of new fulfillment centers (essentially localized warehouses put in more regions), the launching of the Kindle Fire HDX tablet, new tweaks to the Kindle Paperwhite and Mojito operating system, no fewer than 9 new original-content show pilots and even the introduction of a Kindle store in Mexico, this is one of the most difficult companies in the world to predict on the bottom-line.
Guidance for its Q4's all-important holiday season is for revenues between $23.5 - $26.5 billion, the high end being beyond our current consensus of $26.05 billion. Not too shabby for a company started in 1994 to sell books over the Internet.
The difficulties, if there are any for Amazon, may be in its global growth initiatives. Even though its International business represents its fastest-growing segment, the biggest country in which Amazon wants to make inroads, China, may also pose the biggest online competition the company has yet seen: Alibaba.com. This future IPO firm looks to be at least a bit more formidable than current Amazon competitors like eBay ( EBAY- Free Report) or Macy's ( M- Free Report) in the next few years.
It looks like the after-hours traders are quite pleased with Amazon's sales numbers in the quarter. After AMZN rose 1.54% in regular Thursday trading, post-announcement it's up nearly 8%. I'm not sure I ever remember a 9-cent miss on earnings result in an after-market buying frenzy. Ahh -- such is the magic of Amazon!
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