For Immediate Release
Chicago, IL – November 11, 2010 – Zacks Equity Research highlights: Biogen Idec (BIIB) as the Bull of the Day and Greatbatch (GB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Macy's Inc. (M), Jamba Inc. (JMBA) and Gentiva Health Services Inc. (GTIV).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Bull of the Day:
Biogen Idec (BIIB) reported third-quarter earnings of $1.33 per share, well above the year-ago figure of $1.20 and the Zacks Consensus Estimate of $1.09. Revenue increased 5% to $1.2 billion, with MS treatments Tysabri and Avonex being the primary growth drivers.
Based on third quarter results, Biogen's new guidance for 2010 and the impact of the company's recently announced restructuring plan, we are raising our earnings estimates for 2010 and 2011 by 16 and 65 cents, respectively. Key products Avonex and Tysabri should continue contributing significantly to sales.
Meanwhile, the company's restructuring initiative should help drive the bottom line. We are also pleased with the company's intention to streamline its pipeline development and focus on candidates that represent higher potential. Based on these positive factors, we are upgrading Biogen to Outperform with a target price of $76.
Bear of the Day:
We downgrade our recommendation for Greatbatch (GB) to Underperform following its lower-than-expected third quarter fiscal 2010 results and management's tepid outlook. Both revenues and earnings for the quarter missed the Zacks Consensus Estimate, impacted by the decline in the company's CRM/Neuromodulation business.
Greatbatch has narrowed its fiscal 2010 revenue and operating margin targets based on sluggish market conditions. The company's cost-cutting and restructuring initiatives continue to support margin expansion.
Moreover, Greatbatch has been acquiring complementary businesses to boost top line. However, we feel that operating metrics are expected remain under pressure through 2010 due to a soft CRM market, pricing pressure and foreign exchange headwinds.
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Macy's Tops, Ups Outlook
Macy's Inc. (M), one of the leading department store retailers in the United States, recently posted third-quarter 2010 results that topped the Zacks expectations. The quarterly earnings of 8 cents a share outperformed the Zacks Consensus Estimate of 3 cents, and rose substantially from a loss of 3 cents delivered in the prior-year quarter.
The Zacks Consensus Estimate remained stable prior to the earnings announcement, in spite of 2 analysts raising their estimates and 4 analysts lowering their projections in the last 30 days.
On a reported basis, including one-time items, quarterly earnings came in at 2 cents a share compared with a loss of 8 cents posted in the year-ago quarter. The shares of Macy's rose 0.8% or 20 cents to $25.42 in pre-market trading.
The company has been taking prudent steps to increase sales, profitability and cash flows, which include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy's continues to focus on price optimization, inventory management and merchandise planning.
The Cincinnati, Ohio-based Macy's said that total sales grew 6.6% to $5,623 million in the third quarter from $5,277 million in the prior-year quarter. Total revenue also comfortably surpassed the Zacks Consensus Revenue Estimate of $5,579 million. Comparable-store sales for the quarter jumped 3.9%.
Online sales, which include macys.com and bloomingdales.com, sustained their growth momentum, and were up 24% in the quarter, favorably impacting comparable-store sales by 0.8%.
Jamba Reports Loss, Misses Estimate
Jamba Inc. (JMBA) reported third quarter 2010 loss of 2 cents per share, which missed the Zacks Consensus Estimate of earnings 4 cents as well prior-year quarter earnings of 4 cents per share. The company reported loss as a result of decline in top line along with the charges incurred for closing restaurants and refranchising company-owned stores.
The top line of the company continues to struggle, as consolidated revenues fell 16.3% year over year to $66.1 million, which was slightly below the Zacks Consensus Estimate of $67.0 million. The revenue declined due to sluggish same store sales and lower operating income at company-owned restaurants.
Sales at company-operated restaurants were down 17.5% year over year to $63.9 million, due to a reduction in the number of restaurants in operation at the end of the quarter compared with the prior-year quarter. However, Franchise and other revenues grew 44.7% to $2.2 million, fueled by increase in the number of franchise stores.
Jamba experienced a drop in its company-owned comparable store sales, which declined to 2.7% in the reported quarter, compared with 5.3% in the year-ago quarter.
Cost of sales declined 22.0% year over year to $15.0 million, labor costs dipped 16.7% to $19.7 million, occupancy costs fell 18.8% to $8.6 million and store-operating expenses plunged 5.7% to $9.5 million. Depreciation and amortization expenses fell 21.8% to $3.1 million and general and administrative expenses decreased 8.5% to 8.1 million.
Consolidated adjusted EBITDA inched up 2.1% year over year to $4.8 million. However, adjusted EBITDA margin improved 50 bps to 7.6%. Adjusted Store level EBITDA declined 4.7% to $12.9 million.
Gentiva Beats, Top Line Soars
Gentiva Health Services Inc. (GTIV) reported its third-quarter adjusted earnings of $22.2 million or 73 cents per share, well ahead of the Zacks Consensus Estimate of 63 cents. This also compares favorably with the income of $15.8 million or 53 cents in the year-ago quarter. Earnings ramped up due to strong growth in Hospice and Home Health Episodic volumes as well as progressive operating margins.
Gentiva's adjusted earnings exclude pre-tax restructuring, acquisition and integration costs of $22.8 million or 44 cents per share in the reported quarter and $0.9 million or 2 cents per share of restructuring and merger & acquisition costs in the prior-year quarter. The results, however, include the impact of the acquisition of Odyssey Healthcare Inc. results, which was completed in August 17, 2010.
Discontinued operations represent results of the respiratory therapy and home medical equipment and infusion therapy businesses of Gentiva, sold on February 1, 2010. Gentiva incurred after-tax losses on discontinuing operations of $0.7 million or 2 cents per share in the reported, far above $0.2 million or 1 cent per share in the prior-year quarter.
Including one-time charges for restructuring, legal settlements and acquisition and integration activities along with gains on sales of assets and discontinuing operations, Gentiva reported a net income of $8.1 million or 27 cents per share as opposed to $15.4 million or 52 cents per share in the prior-year quarter.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
GREATBATCH INC (GB): Free Stock Analysis Report
GENTIVA HEALTH (GTIV): Free Stock Analysis Report
JAMBA INC (JMBA): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
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