CHICAGO, Sept. 23, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Ryder System (NYSE: R) as the Bull of
the Day and Corning, Inc. (NYSE: GLW) as the Bear of the
Day. In addition, Zacks Equity Research provides analysis FedEx
Corporation (NYSE: FDX), Discover Financial Services
(NYSE: DFS) and Bed Bath & Beyond Inc. (Nasdaq:
BBBY).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
We maintain our Outperform recommendation for Ryder
System (NYSE: R) on strong second quarter results and a solid
earnings projection. Despite the negative impacts of the
Japan disruption and an uncertain
economic outlook, earnings beat the Zacks Consensus Estimate on
higher pricing, acquisitions, and increased sales in commercial
rental and used vehicle sales.
Ryder's continued investments in fleets and technology upgrades
will fuel earnings growth despite high maintenance costs and the
negative in the near-term impact of the disaster in Japan. The strong balance sheet encourages the
company to expand its footprint via acquisitions.
Further, Ryder remains committed to its shareholders via
dividends and share repurchases. Thus, we remain optimistic on the
company's growth prospects.
Bear of the Day:
Corning, Inc. (NYSE: GLW) is a leading developer of
advanced glass substrates for multiple markets. June quarter
earnings beat the Zacks Consensus Estimate by a penny, but guidance
was soft, reflecting inventory builds at TV manufacturers, which
impacted both the Display and Specialty Materials segments.
We continue to believe in Corning's longer-term prospects,
especially with respect to GG and strong position at OEMs. However,
while efforts to diversify operations continue, Corning remains
highly dependent on display markets. Price erosion in this market
and the higher debt level will remain a drag on earnings.
Given the above, we are downgrading the shares from Neutral to
Underperform. We think downside potential is greater, given the
extreme dependence on the display market and the possibility of
further weakness in earnings.
Latest Posts on the Zacks Analyst Blog:
FedEx: Mixed Results, Lower Outlook
Before the opening bell, FedEx Corporation (NYSE: FDX),
the world's second-largest package delivery company, reported first
quarter fiscal 2012 adjusted earnings of $1.46 per share. The quarter's earnings fell
short of the Zacks Consensus Estimate by a penny but increased 22%
from $1.20 earned in the year-ago
quarter.
Total revenue climbed 11% year over year to $10.52 billion and surpassed the Zacks Consensus
Estimate of $10.33 billion. The
outperformance was attributable to improved FedEx Ground and FedEx
Freight performance as well as strong yield initiatives.
Operating income increased 17% year over year to $737 million, resulting in operating margin of 7%
compared with 6.6% in the year-ago quarter. Operating expenses grew
11% year over year to $9.78 billion
mainly due to 40% higher fuel cost from the year-ago quarter.
Guidance
FedEx has projected earnings in the range of $1.40 to $1.60 per share for the second quarter
of 2012. The mid-point ($1.50) is
lower than the current Zacks Consensus Estimate of $1.59.
Based on rising fuel prices and moderate economic growth, FedEx
has lowered its fiscal 2012 earnings projection from $6.35–$6.85 to $6.25–$6.75 per share. But the mid-point
($6.60) is still above the current
Zacks Consensus Estimate of $6.42.
FedEx continues to expect capital spending of $4.2 billion for fiscal 2012. The company intends
to buyback shares over the fiscal year under its existing
repurchase authorization of 5.7 million shares.
Discover Beats Estimates
Discover Financial Services (NYSE: DFS) reported
third-quarter earnings per share of $1.18, dramatically ahead of both the Zacks
Consensus Estimate of 91 cents and
47 cents recorded in the year-ago
quarter. Net income spiked substantially by over 148.7% year over
year to $649 million from
$261 million.
Net income allocated to common shareholders also surged to
$642 million from $258 million in the year-ago quarter.
The surge in profits was driven by strong sales volume
complemented by lower interest expense, reduced provision for loan
losses and delinquency rates based on improved credit quality. The
profit was also boosted by the escalated income from both direct
banking and payment services business, which also drove the book
value per share. However, these were partially offset by increased
operating and tax expenses.
Total revenue, net of interest expense, increased 4.6% year over
year to $1.79 billion, also exceeding
the Zacks Consensus Estimate of $1.48
billion. Net interest income increased 7.8% year over year
to $1.24 billion. However, total
expenses also increased 13.4% year over year to $642 million.
Bed Bath & Beyond Beats on Both
Bed Bath & Beyond Inc. (Nasdaq: BBBY) reported
better-than-expected second-quarter 2011 results on the heels of
strong growth in sales and higher margins.
Earnings rose approximately 33% to 93
cents per share from the year-ago quarter earnings of
70 cents a share, handily surpassing
its earnings guidance range of 77 cents to
82 cents per share. Bed Bath & Beyond also outpaced the
Zacks Consensus Estimate of 84 cents
a share.
Earnings Guidance
Bed Bath & Beyond expects to deliver third-quarter 2011
earnings per share between 82 cents and 87
cents. Fiscal 2011 earnings per share are expected to
increase by 22% to 25%, up from the previous forecast of 15% and
20%.
Get the full analysis of all these stocks by going to
http://at.zacks.com/?id=2649.
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)
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