Zacks Analyst Blog Highlights: DIRECTV, Jack in the Box, Comstock Resources, Sina and International Flavors & Fragrances - Press Releases

For Immediate Release

Chicago, IL – August 06, 2010 – Zacks.com Analyst Blog features:

DIRECTV (DTV), Jack in the Box Inc. (JACK), Comstock Resources Inc. (CRK), Sina Corp. (SINA) and International Flavors & Fragrances Inc. (IFF).

Here are highlights from Thursday’s Analyst Blog:

DIRECTV Beats Zacks Estimates

DIRECTV (DTV) today declared excellent financial results for its second quarter 2010. Supported by double-digit revenue and significant margin expansion, both top-line and bottom-line outperformed the Zacks Consensus Estimates. During the reported quarter, the company has started two new services: viz and Whole Home DVR, as well as a bundle offering of three dedicated 3D channels.

Second quarter 2010 revenue of $5,848 million was an improvement of 12% year-over-year and well above the Zacks Consensus Estimate of $5,714 million. This was primarily due to massive subscriber growth in both the U.S. and Latin America regions.

Quarterly GAAP net income was $543 million or 42 cents per share compared to a net income of $407 million or 40 cents per share in the year-ago quarter. However, in the reported quarter, DIRECTV incurred around $160 million of one-time charges related to a share transaction with former CEO John Malone and his family. Excluding this, second quarter 2010 EPS of 60 cents was above the Zacks Consensus Estimate of 59 cents.

Quarterly operating profit before depreciation & amortization (OPBDA) was $1,635 million, up 18% year-over-year. Second quarter operating profit was $1,010 million, up 43.9% year-over-year. The company paid a total $1.72 billion for repurchasing shares. Additionally, the board of directors of DIRECTV further extended the share buyback program by $2 billion.

Jack in the Box Misses

Jack in the Box Inc. (JACK) posted fiscal 2010 third-quarter earnings of 50 cents per share after the closing bell on Wednesday. The company’s earnings came in behind the Zacks Consensus Estimate of 53 cents per share as well as the year-ago result of 57 cents. The worse-than-expected results were primarily caused by sluggish sales and higher overheads.

San Diego-based Jack in the Box is a restaurant company that operates and franchises more than 2,200 Jack in the Box quick-service restaurants across 18 states. The company, through a wholly owned subsidiary, also operates and franchises Qdoba Mexican Grill fast-casual dining chain, with more than 500 restaurants in 43 states and the District of Columbia.

During the quarter, Jack in the Box recorded a 9.1% decline in total revenue to $523.3 million from $575.7 million in the prior-year quarter. The decrease was primarily caused by a 17.8% year-over-year decrease in restaurant sales to $376.1 million mainly due to the company’s strategy to sell company-owned restaurants to franchisees. However, overall revenues were partially helped by a 29.6% growth in distribution revenue to $94.0 million and a 16.5% increase in franchised restaurant revenues to $53.1 million.

Company restaurant same store sales dropped 9.4% in the quarter as a high unemployment rate in its major market hurt sales. Thus, to drive traffic, Jack in the Box has been focusing on introducing new meal offer and promotions.

Comstock Posts Narrower Loss

Oil and natural gas firm Comstock Resources Inc. (CRK)reported better than expected second quarter results backed by a rise in production volumes and higher commodity price realizations.

Loss per share came in at 4 cents, considerably narrower than the Zacks Consensus Estimate of 19 cents and the year-ago loss of 26 cents. Oil and gas sales were up 39.8% year over year to $90.7 million, in the process topping the Zacks Consensus estimate of $88.0 million.

Volume Growth

Comstock recorded a quarterly volume growth of 30.2% year over year to 20.0 billion cubic feet equivalent (Bcfe), of which 94% was natural gas. The company’s impressive operational performance continued to reflect the success of its enhanced onshore drilling programs (particularly that in the Haynesville shale natural gas play in East Texas/North Louisiana) and property acquisitions.

Production in the East Texas/North Louisiana operating region increased 62.0% to 14.6 Bcfe, while production from the South Texas properties came in at 4.0 Bcfe, an approximately 20.4% decrease from the year-earlier level.

Price Realizations Up

Average price realization per thousand cubic feet equivalent (Mcfe), before hedging, was $4.54, up 20.4% from the year-ago quarter. Average oil price realization was $67.37 per barrel and average natural gas realization (before hedging) was $4.09 per Mcf, compared with $49.24 per barrel and $3.38 per Mcf, respectively, in the year-earlier quarter.

Sina Bolstered by World Cup

A leading online media company and mobile value added services for China, Sina Corp. (SINA) announced strong second quarter 2010 results. Earnings spiked up 56.5% year over year to 37 cents per share, beating the Zacks Consensus Estimate by 8 cents.

Strong growth was primarily driven by solid revenue growth and strong gross margin expansion. Earnings include stock-based compensation expenses but exclude one-time items.

Earnings on a GAAP basis increased 67.9% year over year to 38 cents in the second quarter, driven primarily by operating margin growth.

Revenue

Revenues on a non-GAAP basis increased 17.5% year over year to $94.7 million in the quarter. GAAP revenues upped 10.1% year over year to $99.4 million.

Strong revenue growth was primarily driven by higher advertising revenues. Advertising revenues were $73.1 million, an increase of 52.0% year over year, while non-advertising revenues plummeted 33.4% year over year to $21.6 million in the quarter.

Advertising revenues were driven by a strong growth from automobiles, telecom and the financial services sector. FIFA World Cup 2010 contributed to the strong quarterly growth, attributable to the massive demand for video clips of the games.

In the second quarter, average spending per advertiser grew 33.0% year over year while the number of advertisers grew 14.0% as compared with the prior-year period.

Sina’s miniblog platform received approximately 14 million World Cup-related streams. This huge traffic helped Sina to gain significant market share in online advertising during World Cup season.

Sina achieved 30.0% year-over-year user growth for its mobile Internet portal during the quarter. We believe Sina’s strategy of accumulating users both for its miniblog platform and mobile Internet will boost top-line growth in the near term.

IFF Beats Estimates, Wary of 2H

International Flavors & Fragrances Inc. (IFF ) reported encouraging results for the second quarter of 2010. Adjusted net income soared 33.6% year over year to $68.7 million, or 85 cents per share compared with $51.4 million or 65 cents per share in the second quarter of 2009. Earnings per share (EPS) surpassed the Zacks Consensus Estimate of 82 cents.

Adjusted results for the second quarter 2010 excluded roughly 2 cents per share charge related to the company’s ongoing restructuring activities in Europe. In the reported quarter GAAP EPS was 83 cents compared with 60 cents in the year-ago quarter.

Outlook

Management was cautious about the outlook for the second half of 2010 and expects diminishing benefits from restocking activities. Revenue on a constant currency basis is expected to return to more normalized levels. Foreign currency impact might hurt results.

Our Take

International Flavors & Fragrances is one of the leading companies engaged in the creation and manufacturing of fragrance and flavor products in the United States and internationally. We believe that the company’s success will be driven by its substantial geographical presence and product mix. Also, the company’s accomplishments in research and intense consumer insight will augment its growth momentum. In addition the company’s strategy of reducing operating costs is expected to yield higher margins.

However, the cyclical nature of the flavors and fragrances industry might be a major hindrance to the company’s growth. Moreover, the intense competition within the industry reduces both top-line and bottom-line results. Prime competitors of the company include Danisco A/S, Firmenich SA, and Givaudan SA.

We currently maintain a Neutral recommendation on the stock, which is supported by Zacks #3 (Hold) Rank.

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