For Immediate Release
Chicago, IL – August 06, 2010 – Zacks.com Analyst Blog features:
Viacom Inc. (VIA.B), News Corporation (NWSA), Prudential Financial Inc. (PRU), Kinross Gold Corporation (KGC) and STMicroelectronics NV (STM ).
Here are highlights from Thursday’s Analyst Blog:
Viacom Nets Soars on Flat Revs
Viacom Inc. (VIA.B) today declared financial results for the second quarter 2010 with net earnings rising more than 40% year-over-year. However, a flat top-line remains a concern, especially in the Home Entertainment businesses.
Quarterly net income from continuing operation was $418 million or 68 cents per share compared to a net income of $298 million or 46 cents per share in the prior-year quarter. Second quarter 2010 EPS of 68 cents was well above the Zacks Consensus Estimate of 65 cents.
Quarterly total revenue of $3,301 million remains flat year-over-year. However, revenue was below the Zacks Consensus Estimate of $3,383 million. Growth in affiliate fees, theatrical and advertising revenue was offset by lower Home Entertainment revenue.
Quarterly operating income was $894 million, up 35% year-over-year driven by the solid performance of the Media Networks segment and highly effective cost management strategy taken by Viacom for its Filmed Entertainment segment.
At the end of the second quarter of 2010, Viacom had $677 million of cash & cash equivalent and $6,758 million of outstanding debt on its balance sheet compared to $298 million of cash & cash equivalent and $6,773 million of outstanding debt at the end fiscal 2009. At the end of the reported quarter, debt-to-capitalization ratio was 0.42 compared to 0.43 at the end of fiscal 2009.
News Corp Beats Estimate
News Corporation (NWSA) posted better-than-expected fourth-quarter 2010 results on the heels of improved advertising performance at its Television, Cable Networks and Newspaper segments and significant cost-cutting initiatives.
The improvement in advertising trends was witnessed across automotive, retail and telecommunications categories. The quarterly earnings of 30 cents a share outdid the Zacks Consensus Estimate of 20 cents, and rose substantially from a cent delivered in the year-ago quarter. News Corporation anticipates advertising markets to improve as the downturn fades.
On a reported basis, including one-time items, quarterly earnings swung to earnings of 33 cents a share, witnessing a sharp rise from a loss of 8 cents posted in the prior-year quarter.
News Corporation said that total revenue rose 5.7% year-on-year to $8,110 million driven by the strength across Filmed Entertainment (up 4.1%), Television (up 11.6%), Cable Network Programming (up 14.9%), Newspapers and Information Services (up 8.9%), and Book Publishing (up 8.6%), partially offset by Direct Broadcast Satellite Television (down 3.4%) and Integrated Marketing Services (down 3.2%). The Other segment revenue fell 19.8%. Total revenue also comfortably surpassed the Zacks Consensus Revenue Estimate of $7,960 million.
Total operating income dropped 1.7% to $932 million during the quarter. News Corporation now expects fiscal 2011 operating income to increase in the low double-digit percentage range.
Prudential Gains on Higher Revs
Life insurer Prudential Financial Inc.'s (PRU) second quarter operating income of $1.51 per share was ahead of the Zacks Consensus Estimate of $1.31. Earnings were, however, down from $1.87 per share in the year-ago quarter. Results for the quarter benefited from strong annuity sales, higher investment income and asset management fees.
Prudential’s revenues of $8.7 billion came in much higher than the Zacks Consensus Estimate of $7.2 billion. On a year-over-year basis, revenues jumped 39%, primarily due to higher asset management fees, commissions and other income.
Premiums written increased 15.2% to $3.8 billion. Net investment income also increased 3% to $2.1 billion. Assets under management increased 19% year over year to $690 billion, led by increased net new flows and an overall improvement in markets.
Book value per share, a closed watch measure of the company’s performance, increased to $59.94 from $40.20 in the prior-year quarter.
Kinross Reports In-Line
Gold miner Kinross Gold Corporation (KGC) recorded net income of $103.8 million or 15 cents per share in the second quarter of 2010, significantly higher than last year’s $19.3 million or 3 cents. Excluding one–time charges, the company earned $113.1 million or 16 cents, in line with the Zacks Consensus Estimate.
Quarterly revenues leaped 16% to $696.6 million on a 27% hike in average realized gold price to $1,158 per ounce. Pricing gains offset an over 5% decline in gold sales volume to 551,958 ounces of gold. Gold production also declined 4% to 538,270 ounces driven by lower-than-expected output at the mines in Chile and lower grades at Kupol. Healthy revenues led to a 43% increase in operating income to $220.5 million despite a 14% rise in costs to $496 per ounce. Margins came in at a higher rate of 31% versus 26% in the second quarter of 2009.
STMicroelectronics Tops View
STMicroelectronics NV (STM ) reported second quarter 2010 earnings from continuing operations of 18 cents per share, beating the Zacks Consensus Estimate of 14 cents.
STMicroelectronics' net revenues for the reported quarter were $2,531 million, up 8.9% sequentially. The increase primarily reflects better than seasonal sequential revenue growth trends in ACCI and IMS product segments. However, revenue of STMicroelectronics' Wireless segment decreased by 10.5%.
On a sequential basis, all market segments except Telecom, posted growth with Computer increasing by 6%, Industrial by 11%, Automotive by 10%, and Consumer by 15%. Distribution increased 22%, reflecting strong demand and improving market conditions. Telecom declined sequentially by 2%.
Gross margin in the quarter was 38.3%, higher by 60 basis points sequentially due to manufacturing efficiencies and product innovation. In the second quarter, STMicroelectronics continued certain ongoing restructuring activities and headcount-reduction programs to streamline its cost structure. Related to the company's cost-realignment initiatives, STMicroelectronics posted second quarter restructuring and impairment charges of $12 million.
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