Zacks Analyst Blog Highlights: The Clorox, AstraZeneca, Merck, Dean Foods and Coach - Press Releases

For Immediate Release

Chicago, IL – August 04, 2010 – Zacks.com Analyst Blog features:

The Clorox Co. (CLX), AstraZeneca plc (AZN), Merck and Co. (MRK), Dean Foods Co. (DF) and Coach, Inc. (COH ).

Here are highlights from Tuesday’s Analyst Blog:

Clorox EPS Meets, Affirms Guidance

Clorox EPS Meets, Affirms Guidance The Clorox Co. (CLX) posted marginal 0.6% growth in fiscal 2010 fourth-quarter earnings to $171 million from $170 million in the year-ago period. Earnings per share came in at $1.20, matching the Zacks Consensus Estimate, but lagged the year-ago earnings of $1.25 per share.

Clorox’s net sales during the quarter grew 1.1% year-over-year to $1.52 billion, beating the Zacks Consensus Estimate $1.51 billion. The growth was primarily driven by increased volume and higher pricing in International markets, partially offset by the unfavorable impact of Venezuelan currency devaluation. Total volume in the quarter edged up 2% on the back of strong shipments of Kingsford charcoal and Hidden Valley bottled salad dressing.

Segment-wise

Clorox’s sales in the Cleaning segment dipped 1%, while volumes rose 1%. The decline in segment sales was mainly caused by unfavorable product mix. Volume increase was driven by higher shipments of Armor All auto care products and Pine-Sol cleaner, partially offset by reduced shipments of disinfecting products.

Household segment sales remained flat amid a 1% increase in volumes. Volume growth in the segment was primarily attributable to higher volumes of charcoal and trash bags, partially offset by reduced shipments of Clorox’s food-storage products.

Clorox’s Lifestyle segment recorded 7% sales growth on the back of a 10% growth in volumes. The volume growth was mainly driven by Hidden Valley bottled salad dressing and Burt's Bees products, partially offset by lower volumes of Brita water-filtration products.

In the International segment, Clorox’s sales grew 2% on flat year-over-year volumes. The top-line primarily benefitted from price increases. Volumes during the quarter witnessed higher shipments of cleaning products in southern Latin America, entirely offset by reduced shipments of home care products in Venezuela and Mexico and distribution losses in Australia.

AstraZeneca Beats & Ups

AstraZeneca plc (AZN) second-quarter earnings came in at $1.79 per American Depositary Share (ADS), surpassing both the Zacks Consensus Estimate of $1.59 and the year-ago figure of $1.64. Lower net finance expense and a lower tax rate boosted AstraZeneca’s second quarter earnings.

Revenues

Total revenue increased 3% year over year to $8.2 billion, about in line with the Zacks Consensus Estimate. The primary reasons for the increase in revenues were strong performance of AstraZeneca’s key brands such as Crestor (sales up 23% at constant exchange rates [CER] to $1.43 billion), Seroquel (up 8% CER to $1.35 billion), Symbicort (up 20% CER to $664 million), and robust growth in emerging markets.

AstraZeneca recorded strong sales across all geographies during the quarter. Sales in the US, Western Europe, established markets and emerging markets increased (at CER) 4%, 1%, 4% and 16%, respectively.

Among the product categories, while Oncology and Infection & Other both recorded sales declines (at CER) of 11% and 14%, respectively, all other segments recorded an increase in revenues. AstraZeneca earned about 30% of its revenues during the quarter from Cardiovascular drug sales. This segment and Neuroscience recorded the highest growth of 8% and 6% (at CER), respectively. Revenues for the Gastrointestinal segment increased 1% (at CER), while revenues from Respiratory and Inflammation segment remained flat (at CER).

Margins

AstraZeneca’s gross margin increased to 83.0% during the second quarter from 82.7% in the year-ago period driven by lower payments made to Merck and Co. (MRK). However, operating margin declined to 44.6% from 45.3% in the year-ago period, mainly due to lower other income.

With respect to the restructuring program announced earlier, the company incurred costs of $470 million during the quarter.

Dean Foods EPS Tops, View Tepid

Dean Foods Co. (DF) second-quarter 2010 GAAP earnings slipped 30.2% to $44.8 million from $64.1 million in the year-ago period. Excluding special items, adjusted earnings per share came in at 29 cents, well behind 43 cents recorded in the year-ago quarter, but topped the Zacks Consensus Estimate of 25 cents per share.

However, Dean Foods offered disappointing guidance for the third quarter of 2010 amid continued headwinds in the form of intense competition from private label milk offered by retailers and increasing commodity costs. The company stated that it expects earnings of 17 to 22 cents per share during the third quarter, well below the Zacks Consensus Estimate of 26 cents, which dipped 2 cents over the past month as 2 of 14 covering analysts lowered expectations. Shares of Dean Foods slipped more than 9% in morning trade on the New York Stock Exchange.

Meanwhile, Dean Foods’ quarterly net sales grew 10.7% year-over-year to $2.95 billion, narrowly missing the Zacks Consensus Estimate of $2.99 billion. The growth was primarily driven by acquisitions and pass-through of higher commodity costs to consumers in the form of higher prices. In terms of segments, Fresh Dairy Direct–Morningstar segment’s sales grew 8% year-over-year to $2.5 billion, while WhiteWave–Alpro division sales surged 31% to $459 million.

Coach Outperforms

Coach, Inc. (COH ), the designer and marketer of fine accessories and gifts, recently posted better-than-expected fourth quarter results on the back of healthy sales registered in North America, China and Japan.

The quarterly earnings of 64 cents a share outperformed the Zacks Consensus Estimate of 56 cents, and surged 48.8% from 43 cents delivered in the prior-year quarter buoyed by strong top-line growth and competitive pricing.

New York-based company, Coach, said that total net sales for the quarter came in at $950.5 million, up 22.2% from the year-ago quarter, and breezed past the Zacks Consensus Estimate of $886 million.

Excluding the extra week in the quarter under review compared to the year-earlier quarter sales would have increased 13%, and earnings per share would have jumped 23%.

Direct-to-consumer sales jumped 23% to $842 million driven by a 6.3% rise in the North American comparable-store sales and strong growth in the China business with a double-digit rate increase in comparable-store sales. In Japan, sales grew 6%, excluding foreign currency translation, whereas in terms of dollar, sales climbed 13% adjusted for a stronger yen.

The rise in sales was a positive indication for the luxury-goods market, battered by the recent economic downturn. Coach, the maker of handbags, wallets, shoes and other accessories, hinted that its merchandising, marketing and strategic pricing initiatives helped it keep afloat in a difficult consumer environment.

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ASTRAZENECA PLC (AZN): Free Stock Analysis Report
 
CLOROX CO (CLX): Free Stock Analysis Report
 
COACH INC (COH): Free Stock Analysis Report
 
DEAN FOODS CO (DF): Free Stock Analysis Report
 
MERCK & CO INC (MRK): Free Stock Analysis Report
 
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