CHICAGO, April 18, 2011 /PRNewswire/ -- 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: Mattel Inc. (NYSE: MAT),
JetBlue Airways Corporation (Nasdaq: JBLU), Delta Air
Lines (NYSE: DAL), United Continental Holdings Inc.
(NYSE: UAL) and Southwest Airlines Co. (NYSE: LUV).
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Here are highlights from Friday's Analyst Blog:
Mattel Reports In Line
Mattel Inc. (NYSE: MAT) reported first-quarter 2011
earnings of 5 cents per share, in
line with the Zacks Consensus Estimate, but missed the prior-year
quarter earnings of 7 cents. The
year-over-year earnings dropped due higher cost, but the company
witnessed strong sales from its brands including Barbie, Hot Wheels
and Other Girl Brands.
Quarter Highlights
During the quarter, net sales were $951.9
million, up 8% year over year and also above the Zacks
Consensus Estimate of $907 million.
Net sales included favorable foreign currency impact of 1%.
Worldwide gross sales were $1,041.1
million, ahead of $960.3
million recorded in the prior-year period. U.S. gross sales
improved 7% year over year and international gross sales rose 10%
year over year.
Worldwide gross sales for the Mattel Girls & Boys Brands
business unit were up 15% year over year to $656.4 million. Worldwide gross sales for Barbie
(up 14%), Other Girls Brand (up 38%) and Hot Wheels (up 6%)
witnessed significant upside. However, Fisher-Price Brands sales
dropped 2% to $309.9 million while
the American Girl line grew 4% to $73.0
million.
Gross profit rose 10% from the prior-year quarter to
$473.1 million and gross margin
expanded 60 basis points (bps) year over year to 49.7% due to
a 60 bps plunge in cost of sales. However, operating income
plummeted 19% to $36.8 million and
operating margin contracted 120 bps to 3.9% due to higher
other selling and administrative expense ( up 190 bps).
JetBlue Traffic Rises
The discounted U.S. airline JetBlue Airways Corporation
(Nasdaq: JBLU) reported a 7.1% year-over-year traffic increase in
March 2011. Airline traffic is
measured in billions of revenue passenger miles, which implies one
mile flown by one passenger.
On a year-over-year basis, capacity (or, available seat miles)
grew 4.2% and load factor (percentage of seats filled with
passengers) rose 230 basis point (bps) to 83.6% from 81.3% in
March 2010.
JetBlue reported stronger March traffic results compared to its
largest rivals Delta Air Lines (NYSE: DAL) and United
Continental Holdings Inc. (NYSE: UAL). Delta' traffic inched up
0.5%, while United Continental traffic dipped 2.2% in March.
We believe overall economic conditions continue to show signs of
improvement in the form of increased demand and improved yield.
JetBlue benefited from this global economic recovery. Since JetBlue
provides point-to-point services within its domestic routes, the
company has not been affected by the severe natural calamity in
Japan.
However, surging fuel cost will have adverse effects on the
company's profitability. But, to some extent, the losses will be
minimized due to JetBlue's hedging strategy to manage fuel price
volatility.
The low-cost carrier Southwest Airlines Co. (NYSE: LUV)
recorded a 9.8% year-over-year rise in March traffic. This was well
above JetBlue's air traffic growth of 7.1%.
JetBlue is well positioned for growth due to its low cost,
strong brand name, its superior in-flight
services including LiveTV, hedging program
and a nonunionized workforce. Management expects
2011 to be a profitable year based on an improving revenue
environment and continues to focus on achieving long-term
sustainable growth.
In the first quarter of 2011, JetBlue's traffic climbed 7% to
6.9 billion from 6.5 billion in the year-ago quarter. This increase
was based on higher capacity (up 1% year over year) and expanded
load factor (up 460 bps year over year).
We believe JetBlue will continue to benefit from rising demand,
higher fares, cost control measures, additional ancillary revenue
opportunities and future commercial partnerships. However, fuel
price volatility, higher dependence on the New York metropolitan market, competitive
pressures and automated technology keep us on the sidelines.
Furthermore, JetBlue does not pay any dividend to its
shareholders.
We are currently maintaining our long-term Neutral
recommendation on JetBlue supported by the Zacks #3 Rank
(Hold).
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