The Zacks Analyst Blog Highlights: General Motors, Toyota Motor, Magna International, Visteon and Core Laboratories
For Immediate Release
Chicago, IL – June 14, 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 General Motors Company (GM-Free Report), Toyota Motor (TM-Free Report), Magna International (MGA-Free Report), Visteon Corp. (VC-Free Report) and Core Laboratories N.V. (CLB-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday’s Analyst Blog:
GM Recalls New Cadillac & Chevrolet
General Motors Company (GM-Free Report) plans to recall 1,627 units of recently launched 2014 Chevrolet Impala and 2013 Cadillac ATS and XTS sedans due to an electrical fault in the brake lamps and the cruise control. The automaker launched both the vehicles in 2012.
General Motors revealed that the brake lamps in some vehicles may flash even when the brake pedal is not applied. The problem could also cause the cruise control to disengage. The faulty signal of brake lamp could create false alarm of emergency braking to the following driver, resulting in a crash.
GM stated that it has not yet received any reports of crashes or injuries related to the problem. Its dealers will reprogram the cars’ body control module at no cost to owners as all the cars are still under warranty.
Last month, GM recalled more than 27,000 units of its Cadillac crossover vehicles globally because their wheel nuts may not have been tightened properly at the time of assembling. The recall affected 2013 Cadillac SRX models equipped with 18-inch wheels.
General Motors revealed that about 18,871 Cadillac vehicles will be recalled in the U.S., 913 units in Canada, and the remaining 7,397 units of exported vehicles outside North America.
Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM-Free Report) announcement of the largest-ever global recall of 3.8 million vehicles in September 2009, triggered by a high-speed crash that killed 4 members of a family. Later on, a string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts.
The Transportation Department of U.S. slapped a fine of $17.35 million on Toyota due to late response regarding a defect in its vehicles to safety regulators as well as late recall of those vehicles. According to the department, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. The latest fine added to $48.4 million imposed by the U.S. government on the company in 2010 due to late recall of millions of defective vehicles.
General Motors, a Zacks Rank #3 (Hold) stock, reported a 28.0% fall in earnings to 67 cents per share in the first quarter of the year from 93 cents in the same quarter of 2012 (all excluding special items) due to lower earnings generated from the company’s all geographic operations except Europe. Despite this, the automaker’s earnings exceeded the Zacks Consensus Estimate by 11 cents per share.
Net earnings fell 31.3% to $1.1 billion from $1.6 billion in the first quarter of 2012. Including net loss from special items, earnings were $0.9 billion or 58 cents per share in the quarter compared with $1.0 billion or 60 cents a year ago.
Revenues in the quarter slid 2.4% to $36.9 billion, despite a 3.6% rise in retail unit sales to 2.4 million vehicles globally. It was higher than the Zacks Consensus Estimate of $36.4 billion.
Few stocks that are performing well in the broader industry where GM operates include Magna International (MGA-Free Report) and Visteon Corp. (VC-Free Report). Both the stocks carry a Zacks Rank #1 (Strong Buy).
Core Lab Upgraded to Buy
On Jun 13, Zacks Investment Research upgraded oilfield service company Core Laboratories N.V. (CLB-Free Report) to Zacks Rank #2 (Buy).
Why the Upgrade?
Core Lab has been witnessing rising earnings estimates following impressive first quarter 2013 results that were backed by global deepwater hydrocarbon developments. The company’s consistent emphasis on international crude-oil developments (mainly in deepwater), its global high-grading unconventional crude oil and natural gas opportunities as well as improvements in North American operations complemented the results.
On Apr 17, Core Lab reported earnings per share (EPS) of $1.22, surpassing the Zacks Consensus Estimate of $1.15. Comparing year over year, EPS increased 8.0% excluding one-time items.
With respect to the earnings trend, Core Lab delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 2.87%. Moreover, the company has been gaining shareholders’ confidence by returning wealth via share repurchases and dividend hikes. It increased its quarterly common stock dividend by 14.2% to 32 cents per share ($1.25 per share annualized) in Jan 2013.
The long-term expected earnings and sales growth projections of 18.0% and 7.48%, respectively, are also fairly impressive.
Based on Core Lab’s consistency in earnings, attractive fundamentals and a positive outlook, the Zacks Consensus Estimate for the second quarter of 2013 has increased 4.0% to $1.31 per share over the last 60 days. For 2013, the Zacks Consensus Estimate increased 1.6% over the same time frame to $5.22 per share.
We believe that Core Labs’ technology-heavy portfolio of proprietary products and services gives it the opportunity to optimize production from new and existing fields. The company remains well positioned onshore U.S. given its strong presence in the emerging shale plays, where activity levels are not affected by the ongoing financial turmoil and commodity-price uncertainty.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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