Zacks Bull and Bear of the Day Highlights: Universal Technical, Northern Trust, Dr Pepper Snapple Group Inc., Safeway Inc. and Mylan - Press Releases
For Immediate Release
Chicago, IL – February 26, 2010 – Zacks Equity Research highlights Universal Technical (UTI) as the Bull of the Day and Northern Trust (NTRS) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dr Pepper Snapple Group Inc. (DPS), Safeway Inc.(SWY) and Mylan (MYL).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Universal Technical’s (UTI) leading position in providing technical education to aspiring automotive professionals, and its business model of working closely with leading OEMs provide the company a competitive advantage.
The company's sustained effort to expand educational programs helps it to boost enrollments, and in turn, the top-line. Moreover, higher education sees a counter-cyclical movement during sluggish economic conditions.
Furthermore, the company's debt-free balance sheet, and healthy cash reserves augur well for future operating performance. Our current target price is $28 per share.
We are downgrading our recommendation on Northern Trust (NTRS) to Underperform from Neutral. The company's fourth quarter earnings came in better than the Zacks Consensus Estimate, benefiting primarily from lower provisions.
The low interest rate environment is reducing the profitability of the company's balance sheet as earning asset yields are contracting faster than its cost of funds. We expect its net interest income, securities lending revenue and money market fees to remain under pressure until interest rates rise.
Also, credit quality remains a concern. However, with a growing network of clients, the company is poised to benefit from changing demographic trends. Moreover, adequate financial strength positions it for suitable acquisitions.
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Dr Pepper Beats Estimates
Dr Pepper Snapple Group Inc. (DPS) reported strong fourth-quarter 2009 earnings of 44 cents per share. Earnings were 4 cents above the Zacks Consensus Estimate and were up compared to a loss of $2.44 per share in the prior-year period.
Net sales declined 1.5% year-over-year to $1.3 billion, as concentrate price increases taken earlier in the year, combined with 4% growth in sales volume, were fully offset by the loss of certain contract manufacturing and negative mix from higher sales of carbonated soft drink (CSD) concentrates and value juices.
Bottler case sales volume increased 4% during the quarter with carbonated soft drinks growing 4% and non-carbonated beverage sales up 5%. On a geographic basis, volume sales increased 4% in North America and Canada, and 1% in Mexico and the Caribbean.
Safeway Reports In-line
Safeway Inc. (SWY) reported fourth quarter earnings of 53 cents per share, meeting the Zacks Consensus Estimate. However, earnings were down 33% from 79 cents in the prior-year period.
After considering a goodwill impairment charge, the company had a loss of $4.06 per share during the reported quarter. For the full year 2009, Safeway’s earnings came in at $1.74 compared to $2.21 in 2008.
Safeway recorded a year-over-year decline of 8.1% in sales to $12.7 billion in the quarter primarily due to a 4.1% decline in identical-store sales (excluding fuel) and an additional week in the fourth quarter of 2008. Revenues for 2009 declined 7.4% to $40.8 billion.
Due to a lower market capitalization and a weak economy, Safeway recorded a non-cash goodwill impairment charge of $1,974.2 million ($1,818.2 million, net of tax) during the reported quarter. Gross margin of 28.64% for the quarter was 14 basis points lower than the previous year. However, the gross margin declined 16 basis points, excluding the impact of fuel sales.
Mylan Beats, Outlook Robust
Mylan (MYL) reported fourth quarter earnings per share (EPS) of 33 cents, surpassing the Zacks Consensus Estimate of 30 cents and 26 cents in the prior-year period. For the full year 2009, EPS came in at $1.30, up 62.5% from 80 cents in 2008.
Mylan reported revenues of $1.35 billion, a 12% increase compared to $1.20 billion in the year-ago period. Revenues were favorably impacted by the foreign currency translation. For the full year, the company recorded $5.09 billion in sales, marginally lower than $5.14 billion in the previous year, which included $468.1 million of previously deferred revenue related to its sale of Bystolic rights.
From the third quarter of 2009, Mylan has decided to report its results in two segments -- Generics and Specialty -- following the acquisition of approximately 24% of the remaining interest in Matrix and the related de-listing. The former Matrix segment is included in the Generics segment.
While revenues from the Generics Segment increased 14% year-over-year to $1.29 billion during the quarter, revenues from Specialty have recorded an increase of 8% to $87.5 million.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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