U.S. Markets closed

The Zacks Analyst Blog Highlights: BlackBerry, T-Mobile U.S., Apple, Google and Paychex

Zacks Equity Research

  For Immediate Release

Chicago, IL – September 30, 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 the BlackBerry Limited ( BBRY- Free Report), T-Mobile U.S. Inc. ( TMUS- Free Report), Apple Inc. ( AAPL- Free Report), Google Inc. ( GOOG- Free Report) and Paychex Inc. ( PAYX- Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Friday’s Analyst Blog:

T-Mobile Ends BlackBerry Retail

The difficulties of BlackBerry Limited ( BBRY- Free Report) continues with T-Mobile U.S. Inc. ( TMUS- Free Report), one of the big four U.S. telecom carriers, deciding to stop stocking BlackBerry smartphones in its stores. The news came a couple of days after the Canadian handset manufacturer agreed to divest its entire stake to Toronto-based insurance company Fairfax Financial Holdings Ltd. for $4.7 billion, or $9 per share.   

T-Mobile U.S. announced that it will continue to endorse BlackBerry devices and take customer orders at its retail stores. However, the smartphones will be shipped directly to customers instead of giving them an option to handpick them at its stores. T-Mobile U.S. will continue to sell BlackBerry smartphones online.

Shareholders of BlackBerry reacted negatively since the news came out as the stock lost 6.8% of its value on Nasdaq. T-Mobile U.S. on the contrary had a better outing on the bourse as its stock price gained 2.68% since Wednesday.

T-Mobile’s decision does not come as surprise as BlackBerry reported dismal preliminary results for the second quarter of fiscal 2014. For the third quarter, BlackBerry expects to report a GAAP net loss of nearly $950 million to $995 million or around $1.81 to $1.90 per share along with a 45% annualized decline in revenue.  

BlackBerry, which is known for its secured email service continues to lose market share in a crowded smartphone market dominated by Apple Inc.’s ( AAPL- Free Report) iPhone and Google Inc.’s ( GOOG- Free Report) Android-based devices. This quarter hasn’t been any expectation as the company is expected to report smartphone sales of 3.7 million, down 50% year over year.

Unlike T-Mobile, two of its bigger rivals AT&T Inc. and Verizon Wireless have decided to sell BlackBerry devices from their retail outlets. It is believed that AT&T and Verizon Wireless could follow the path of T-Mobile if the beleaguered handset manufacturer fails to improve its performance.

Losing T-Mobile is apparently just another of the many setbacks that BlackBerry is currently facing. But we believe that losing a carrier partner like T-Mobile is a grave concern as it will eventually impact its sales, given its expanded network.

Currently, T-Mobile U.S. carries a Zacks Rank #3 (Hold).

Is Paychex (PAYX) Poised to Beat Earnings?

Payroll and human resource solutions provider, Paychex Inc. ( PAYX- Free Report), is slated to release first-quarter 2014 results on Sep 30, 2013, after the closing bell. It is noteworthy that in the last quarter, Paychex recorded a positive earnings surprise of 2.7%. The company has a trailing four-quarter average positive surprise of 2.57%. Let us see how things are shaping up for this quarter.

Growth Factors this Past Quarter

Paychex’s fourth quarter witnessed growth across its services segment, primarily aided by Human Resource Services revenues. Growth in Human Resource Services revenues was driven by client growth and price increases. Also, increases in checks per payroll and revenue per check positively impacted Payroll service revenues. Moreover, the client retention rate was satisfactory.

Moreover, the company’s modest revenue growth supported by better cost management and capacity utilization boosted operating performance. However, Paychex’s earnings remained flat on a year-over-year basis as the company incurred higher tax provision for a state income tax settlement.

Earnings Whispers?

We are encouraged by Paychex’s product development and focus on building sales force to support revenue growth. Moreover, Paychex’s focus on small and mid sized business looking for HR solutions could provide the company with opportunities. However, the macroeconomic sluggishness coupled with growing competition from Intuit and Automatic Data Processing could be an overhang.

The Zacks Consensus Estimate for the first quarter stands at 43 cents with no estimate revisions witnessed in the last 60 days. The stock carries a Zacks Rank #3 (Hold).

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on BBRY - FREE
Get the full Report on TMUS - FREE
Get the full Report on AAPL - FREE
Get the full Report on GOOG - FREE
Get the full Report on PAYX - FREE
Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Read the analyst report on BBRYRead the analyst report on TMUSRead the analyst report on AAPLRead the analyst report on GOOGRead the analyst report on PAYXZacks Investment Research