NEW YORK, Dec. 22 /PRNewswire/ -- Standard & Poor's Equity Research has published semi-annual surveys for several industries, including Alcoholic Beverages & Tobacco, Household Durables, Lodging & Gaming, General Retailing, Computers (Commercial Services and Consumer Services & the Internet), Investment Services, Pharmaceuticals, and Household Nondurables.

These industry surveys, which are about forty pages long and written by S&P equity analysts, include sections on each industry's current environment, an industry profile, industry trends, how the industry operates, key industry ratios and statistics, how to analyze a company in that industry, industry references, and comparative company analysis.

Following are short excerpts from each of the industry surveys listed above.

Alcoholic Beverages & Tobacco: Our outlook for the tobacco industry is positive, as competitive pressures in the US cigarette market are contained and significant federal and state excise tax hikes appear to be well absorbed by consumers. Despite an anticipated volume decline of 7% to 9%, we believe that total industry operating profits for 2009 will rise in the high single digits, due to positive pricing, major cost restructuring, a reduction in marketing expenditures, and consolidation. Over the longer term, we expect domestic cigarette consumption to decline 4% to 5% a year, acceleration from recent declines of 3% to 4%.

Despite a weak housing market and high unemployment, and the likely near-term effect of these two factors on disposable income, we remain positive on the US alcoholic beverage industry, given attractive demographics, longer-term trading-up activity, and significant increases in brand investments by beverage companies.

Household Durables: We maintain a negative fundamental outlook on the home furnishings sub-industry since it continues to experience weak demand from lower customer spending, minimal pricing power, and low net margins. We think customers are fairly stretched due to higher energy and healthcare costs, and a slowdown in home equity cash-outs. We believe higher unemployment also contributes to a weaker spending outlook.

Lodging & Gaming: Our view for the hotel industry in 2010 is for a long period of continued tough operating conditions, with oversupply becoming more the story as demand somewhat recovers. We think this will likely lead to only a small uptick in industry occupancy rates from severely depressed levels. The continued growth in supply, coupled with a continuing shift in hotel guests' preference for cheaper rooms, will likely lead to hotel operators to lower rates, pressuring revenue per available room.

Gaming fundamentals continue to be poor. We expect the industry's performance in 2009 and 2010 to be notably worse than lodging's because gaming is more sensitive to consumer discretionary spending. Its largest markets, Las Vegas and Atlantic City, are more severely impacted by higher levels of supply in Las Vegas and increasing competition from gaming expansion in neighboring states.

General Retailers: Retailers are weathering the economic downturn by keeping a close watch on inventory and expenses. They are planning inventories cautiously to minimize the markdown risk, particularly on more discretionary-purchase items, and are rationalizing businesses to lower costs. They have closed underperforming stores, consolidated operating divisions, laid off employees, eliminated bonuses, and suspended matching contributions to employee 401 (k) plans. Retailers are also keeping a close watch on capital expenditures to maintain healthy cash flow despite lackluster sales.

Computers (Commercial Services): We believe that many of the key players in the IT services arena are relatively well-positioned to post revenue and earnings gains when the economy pulls out of the current recession. Due to a large number of layoffs, we believe many companies will be understaffed when the economy heats up again. We believe the outsourcers that have done the best job of controlling their own cost structures throughout the current recession will be in the best position to benefit.

Computers (Consumer Services): Consumers have found the Internet to be a useful tool for communicating, conducting research, and purchasing goods and services, and many other purposes. Corporations have found that, although the Internet is challenging traditional business models, it can offer significant advantages to those that fully embrace it. The Internet is still in a growth phase, fueled by increasing availability of PCs and Internet access, but the pace of expansion has moderated over the years.

Investment Services: Prominent trends affecting this industry include globalization, structural change, and increased regulation. Trends in investment banking include a decrease in leverage, the decline of the big buyout, and changes to the discount broker model. Major developments in asset management include the growing importance of exchange traded funds (ETFs), a decline in private equity and hedge fund activities, the flow of client assets towards large management companies, changes in distribution channels, and declines in funds' expense ratios.

Healthcare (Pharmaceuticals): We believe the proposed healthcare reform initiatives now being debated in Congress represent a mixed bag for the US pharmaceutical industry. The planned expansion of coverage for uninsured Americans would significantly broaden the overall market and increase the number of prescriptions written. However, this projected market expansion would come with new cost-containment measures that are expected to result in more restrictive drug formularies, constrained reimbursement, and widespread price discounting.

Household Nondurables: Given the low rates of population growth and household formations in the developed nations, it has become more difficult for consumer product manufacturers to achieve significant sales gains. In response, these companies are attempting to stimulate sales in varying ways, such as entering new markets, creating new product categories, adding new distribution channels, and acquiring (and divesting) businesses. Companies are also undergoing restructurings to cut costs and boost profit margins. Because of these efforts, the industry should continue to consolidate, and consumers will likely see more product choices at more points of purchase.

Individuals can purchase Standard & Poor's Industry Surveys online for immediate download at http://sandp.ecnext.com. Members of the media can request a copy from marc_eiger@standardandpoors.com.

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