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The Zacks Analyst Blog Highlights: Verizon Communications, AT&T, Time Warner Cable, Starz and Accenture

Zacks Equity Research

For Immediate Release

Chicago, IL – April 5, 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 Verizon Communications Inc. (VZ), AT&T, Inc. (T), Time Warner Cable (TWC), Starz (STRZA) and Accenture Plc. (ACN).

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Here are highlights from Thursday’s Analyst Blog:

Verizon Plans Fiber-Optic Trial Run

Verizon Communications Inc. (VZ) is planning to build a pilot program to test new ways to deploy fiber-optic cables in New York City. According to reports, the company is planning to use techniques like micro trenching and saw cutting to insert cable through sidewalk. These techniques are expected to consume smaller space for cable insertion and ultimately result in reduced cost compared to the traditional methods of deploying cables.

Currently, Verizon is initiating a pilot project in collaboration with New York City authorities.  If the deployment is done successfully, the company will carry out such network deployments in the whole of New York, covering five boroughs by next year.

The company’s main aim is to expedite the deployment of fiber optic service, replacing traditional copper lines so as to increase data speed and curb network traffic. Currently, Verizon provides fiber optic networking only for its FiOS TV and broadband services.  Through copper-to-fiber migration, the company intends to drive FiOS revenue growth and maximize profitability.

Apart from improving network deployments, Verizon is taking several other steps to improve its wireline service – FiOS – that competes with AT&T, Inc.’s (T) U-Verse services and Time Warner Cable (TWC). The company introduced new FiOS pricing plans (set-top boxes and planned bundled changes) that would accelerate consumer revenue growth for the next several quarters. Verizon also collaborated with Starz (STRZA) – a top-notch global media and entertainment company – to launch STARZ PLAY and ENCORE PLAY. Overall, we believe these combined efforts would lead to improved revenue, high operating margins and greater share in the cable services market.  

Verizon has a Zacks Rank #3 (Hold).

Accenture Closes Change Track Deal

Consistent with its strategy to strengthen its Analytics business, Accenture Plc. (ACN) completed the acquisition of change management company Change Track Research Pty Ltd. 

With this acquisition, Accenture will have access to Change Track’s key solutions such as ChangeTracking, which is an analytics tool using 10 years of research and advanced math algorithms to track data. We believe that this acquisition is basically intended to strengthen Accenture’s portfolio of analytical tools and capabilities, which will ultimately help clients to identify areas requiring change, monitor the process of change, understand the effects of change in advance and implement them smoothly.

The portfolio diversification strategy has helped Accenture strengthen its offerings and counter the sluggish growth in underperforming regions. Moreover, Change Track being an Australian company will help Accenture build a position in the country.

We believe that Accenture’s acquisition strategy has served the company well in the high-growth emerging markets of India, the Philippines, China and Latin America.

This apart, Europe's weak economic condition is perceived to be an opportunity for some meaningful acquisitions. The company is also eyeing acquisitions in the euro zone at competitive prices, which can reap long-term benefits.

Apart from using acquisitions to expand geographically, the company is also focusing on acquisitions based on utility, wherein the acquiring company obtains access to the technology of the acquired company. This has led to the acquisition of the digital production services vendor avVenta Worldwide. Accenture closed the acquisition without disclosing the terms of the agreement.

Although the acquisition provides much-needed support to the company, the Consulting business would need special attention as its performance could weigh on the overall results, as new consulting projects slowly come over.

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