For Immediate Release
Chicago, IL – July 26, 2013 – Zacks Equity Research highlights Visteon Corporation (VC-Free Report) as the Bull of the Day and IEC Electronics Corporation (IEC-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Amazon (AMZN-Free Report), Viacom (VIA-Free Report) and Comcast (CMCSA-Free Report).
Here is a synopsis of all five stocks:
Thanks to its outstanding quarterly results, earnings estimates have been on the uptrend and the company has maintained its Zacks Rank #1 (Strong Buy) since March this year.
Visteon Corporation (VC-Free Report) is a leading global automotive supplier of climate, electronics and interiors products for vehicle manufacturers. It serves original equipment vehicle manufacturers with its technical, manufacturing, sales and service facilities located in 29 countries.
The company has been transforming from a US centric company with only one major customer to a predominantly Asia-based, multi-customer global enterprise.
The company reported its first quarter results on May 9, 2013. Adjusted earnings came in at $2.02 per share, significantly ahead of the Zacks consensus estimate of $1.15 per share.
Results benefitted from increased vehicle production and new business in Asia and North America, partially offset by lower production volumes in Europe.
Hyundai-Kia accounted for approximately 33% of the sales, while Ford accounted for another 28%. On a regional basis, Asia accounted for 46% of total sales, while Europe and Americas represented 30% and 24% respectively.
Visteon updated its full-year guidance for adjusted earnings, to a range of $4.04 to $5.52 per share. The company has repurchased 2.2 million shares ($125 million) year-to-date, representing 4% of its outstanding shares.
Weak results and a cloudy earnings outlook have led to downward estimates revisions, sending this electronics company to a Zacks Rank #5 (Strong Sell).
IEC Electronics Corporation (IEC-Free Report) is a provider of electronic manufacturing services to technology companies in the military and aerospace, medical, industrial and communications sectors. The Company primarily manufactures complex circuit cards, system level assemblies, custom cable and wire harness assemblies and precision sheet metal products. ,
On May 1, 2013, the company shocked its investors by announcing that it will restate its results for the fiscal year ended September 30, 2012 and quarterly results for that year as well for the quarter ended December 28, 2012.
The restatement was reportedly required due to an accounting error which resulted in an aggregate overstatement of gross profits by approximately $2.2 million.
On May 20, 2013, IEC announced preliminary estimated results for the quarter ended March 29, 2013 and said that it anticipates completing the process of restatement and filing of it second quarter 10 Q with 45 days.
Thereafter on July 3, 2012, the company filed its restated financial statement and the quarterly results for Q2 with the SEC.
Second quarter resulted in a loss of $0.12 per share, substantially worse than the Zacks consensus estimate of earnings of $0.20 per share. In fact, the company has delivered negative earnings surprises in three out of last four quarters, with an average quarterly surprise of 59.1%.
Amazon Misses, Stock Dips, Bezos Yawns
Playing Amazon (AMZN-Free Report) shares based on quarterly earnings reports is like playing with fire; if you did that for the company's Q2 earnings report after the bell Thursday, you likely got your fingers burned. The eCommerce giant posted a loss of 2 cents per share on revenues of $15.70 billion, as compared to Zacks Consensus Estimates of a profit of 4 cents per share and sales of $15.79 billion. Slight miss on the top end but a pretty deep swoon in earnings, and into negative territory for the third time in the past five quarters.
But CEO Jeff Bezos doesn't care about 3-month earnings performances, and most investors don't either. Amazon has expanded so far and wide from its earlier days as a simple on-line book retailer it's scarcely recognizable anymore; Bezo's game plan has always been about growth, plain and simple. The idea, then, is to buy Amazon shares and hold them -- sometimes for dear life -- for the long term. Those who've done so have been richly rewarded, with AMZN share value having gone up roughly ten million percent since the company's IPO in 1997. OK, a bit of an exaggeration there.
Analysts covering Amazon earnings haven't even bothered making a single estimate revision for the company's Q2, Q3, fiscal 2013 or 2014. Not one. Notably, the high estimate was for 18 cents per share and the low was for -16 cents. And then everybody sat back and waited for whatever was going to happen to happen.
Guidance for revenues between $15.45B - $17.15B is also a bit of a downer; the Zacks Consensus is for $17.02B, so it's still in the range... but not by all that much. Still, net sales were up 22% from a year ago, and $15.7 billion pretty much ensures the company will be sticking around awhile.
Amazon is now joining forces with Viacom (VIA-Free Report) and Comcast's (CMCSA-Free Report) NBCUniversal to work out major video licensing deals, and its Kindle products and App stores are still doing a healthy business. So while other CEOs -- heck, just about every single one of them -- might shy away from continuing to build out their company's infrastructure so massively, Bezos looks for now to be sticking with his gameplan. And caring whether after-market traders sell off their AMZN shares (they have, but only a little) is not part of that gameplan.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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