Rite Aid, Guess?, Amazon, Microsoft and Netflix highlighted as Zacks Bull and Bear of the Day
CHICAGO, April 25, 2014 /PRNewswire/ -- Zacks Equity Research highlights Rite Aid Corporation (NYSE: RAD-Free Report) as the Bull of the Day and Guess? Inc. (NYSE: GES-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAmazon (Nasdaq: AMZN-Free Report), Microsoft (Nasdaq: MSFT-Free Report) and Netflix (Nasdaq: NFLX-Free Report).
Here is a synopsis of all five stocks:
Rite Aid Corporation (NYSE: RAD-Free Report) reported excellent quarterly results supported by strong pharmacy sales growth and expanding margins. Earnings estimates have thus surged, sending this drugstore chain to Zacks rank #1 (Strong Buy).
Rite Aid, headquartered in Camp Hill, Pennsylvania, is the third largest retail drugstore in the U.S., based on revenues. The company has 4,592 stores currently in 31 states across the country and in the District of Columbia.
Rite Aid reported its Q4 earnings on April 10, 2014. Revenues for the quarter came in at $6.6 billion; up from $6.5 billion in the same quarter of prior fiscal year, thanks mainly to a 3.5% increase in pharmacy same store sales.
Adjusted net income for the quarter was $44.1 million or $0.10 per share, handily beating the Zacks Consensus Estimate of $0.04 per share.
The company recently acquired Health Dialog—a provider of in-store care coaches and RediClinic—a leading operator of retail clinics. These will further support RAD's growth initiatives. The management however does not expect a material impact from the acquisitions on the current fiscal result.
RAD also continues to expand its partnership with drug wholesaler MsKesson and expects a working capital benefit of $150 million as a result of the agreement, to be fully realized in the latter half of the year.
A difficult consumer spending environment in all major markets is keeping retailers under pressure.
Started in 1981 as a family business, Guess? Inc. (NYSE: GES-Free Report) designs, markets, distributes and licenses fashion apparel and accessories. Its products are sold through retail, wholesale, e-Commerce and licensing distribution channels.
GES directly operates 494 retail stores in the US and Canada and 346 retail stores in Europe, Asia and Latin America.
Additionally, 868 retail stores outside of the US and Canada are operated by company's licensees and distributors.
On March 19th, GES reported its Q4 2014 results. Adjusted earnings for the quarter were $71.1 million or $0.83 per share, ahead of the Zacks Consensus Estimate of $0.80 per share and were on the higher end of management's expected range of $0.74 to $0.84 per share.
Earnings were however down 12.6% year over year due to a weak top line during the quarter.
Amazon, Microsoft Post Positive Surprises
More solid after-the-bell quarterly reports in the tech sector again came out Thursday afternoon: both Amazon (Nasdaq: AMZN-Free Report) and Microsoft (Nasdaq: MSFT-Free Report) delivered numbers that should impress their particular investor groups. While Amazon put up sales numbers of $19.74 billion in the quarter -- far ahead of the $19.48 billion Zacks was expecting -- Microsoft posted earnings of 68 cents per share, ahead of the 62 cents in the Zacks Consensus Estimate.
By now, just about everyone knows Amazon's earnings aren't where the real story is; AMZN did announce 23 cents per share for the quarter, however -- a penny ahead of our consensus estimate. And Microsoft delivered slightly less in revenues than we had been expecting: $20.4 billion in the quarter, as opposed to our $20.47 billion estimated. Both stocks are currently trading up in the after-hours session.
Net sales for Amazon are up 23% year over year, and that's the name of the game for the giant Internet store. From a successful launch of Fire TV, a subsequent content deal made with HBO and the announcement that video streams of Amazon Prime Video "nearly tripled year over year," CEO Jeff Bezos still has plenty to crow about, even if there are still lots of analysts who remain worried about the amount of money the company is spending and its astronomical valuation. Amazon has been targeting taking market share from Netflix (Nasdaq: NFLX-Free Report) for the past few quarters, and it appears the company may have made some headway.
Microsoft's valuations are much more down to earth, comparatively, though it, like Amazon, resembles a tech conglomerate of sorts: Windows OEM grew 4% in the quarter boosted by Windows OEM Pro, revenues for Surface had increased 50% and Microsoft sold 2 million xBoxes in the quarter. All pretty positive news to go along with a 9.7% positive earnings surprise, but they're not trying to take on market leaders in other areas like Amazon is. You might say Microsoft performed like a quality utility infielder this quarter, whereas Amazon is a prize fighter attempting to jump weight classes.
In any case, Microsoft CEO Satya Nadella is enjoying some smooth sailing for his inaugural earnings report, and is joining the call this afternoon as well. Before earnings came out, Microsoft carried a Zacks Rank #3 (Hold). Amazon currently sits at Zacks Rank #2 (Buy), based on upward earning estimate revision biases for fiscal 2014 and 2015.
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