The Zacks Analyst Blog Highlights: Aflac, Novatel Wireless, Verizon Communication, AT&T and Sprint Nextel

CHICAGO, May 9, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Aflac Inc. (NYSE: AFL), Novatel Wireless Inc. (Nasdaq: NVTL), Verizon Communication Inc. (NYSE: VZ), AT&T, Inc. (NYSE: T) and Sprint Nextel Corp. (NYSE: S).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday's Analyst Blog:

Aflac Slips to Underperform

We have downgraded life and health insurer – Aflac Inc. (NYSE: AFL) to Underperform based on its faltering financial growth outlook.

Why the Downgrade?

Estimates for Aflac have witnessed a steady decline since its first-quarter 2013 results on Apr 24. The company's first-quarter earnings per share of $1.69 comfortably surpassed the Zacks Consensus Estimate of $1.62, but lagged the year-ago quarter's earnings of $1.74. Meanwhile, total revenue of $6.21 billion missed the Zacks Consensus Estimate of $6.27 billion but inched up 0.5% on a year-over-year basis.

Following a tempered growth outlook, the Zacks Consensus Estimate for 2013 has gone down 2.7% to $6.17 per share in the last 30 days. The Zacks Consensus Estimate for 2014 also slid 4.2% to $6.54 per share. With the Zacks Consensus Estimates for both 2013 and 2014 going down, the company now has a Zacks Rank #4 (Sell).

Cause for Concern

Aflac's top line remains sufficiently exposed to a challenging operating environment, particularly in Japan. Sales from its banks channel, WAYS life policies and other third sector cancer and medical products (together contributing about 75% to Japan's top line) decelerated in the first quarter of 2013.

Management's expectation of third sector revenue growth in Japan in the band of nil to 5% in 2013 further validates the lackluster results ahead. Despite the re-pricing initiatives taken in Apr 2013, Aflac projects a 40–60% decline in the WAYS sales in the upcoming quarters, after over 124% growth in 2012. This will severely weigh on the financials of the company.

On the other hand, Aflac's U.S. operations are yet to gain traction given the deteriorated new annualized sales on the back of intense competition, low demand and reduced client activity from larger businesses. Management projects new annualized sales in the U.S. to witness sluggish growth of nil to 5% in 2013, driven by difficult comps.

Moreover, the company's investment portfolio comprises about 43% in Japanese government bonds, which is being adversely impacted by the historically low interest-rate environment. The past few quarters have witnessed significant weakness in yen as well, indicating deterioration in the upcoming quarters. Increasing expenses, lower investment yield and low rate environment have further impelled management to peg its earnings growth guidance at low- to mid-single digit in 2013.

Novatel Drives MiFi Usage

Novatel Wireless Inc. (Nasdaq: NVTL) – one of the leading manufacturers of wireless data modems – launched SA 2100, a superior higher frequency MiFi-based M2M device which will connect various M2M vertical markets.

The launch of the new SA 2100 technology will ease the usage of M2M applications across vertical markets as the new device will be integrated with simple applications.

The new device will be of immense help to various M2M vertical markets which includes M2M Fixed Telemetry, M2M Fleet Management and Asset Tracking and Connected car. By using SA 2100 in cars as a hotspot, the user can easily connect multiple devices through a Wi-Fi platform.

Likewise, the usage of SA 2100 device for M2M Fleet Management and Asset Tracking will also benefit the user to easily track the fleet through advanced GPS tracker. While in case of M2M Fixed Telemetry, the new device will connect Ethernet-powered or Wi-Fi-based devices to lightning fast Internet by 4G LTE access.

Novatel is one of the leading brands to offer MiFi devices to its customers. The company already supplies its LTE-based MiFi devices to the top three carriers in the U.S., namely, Verizon Communication Inc. (NYSE: VZ), AT&T, Inc. (NYSE: T) and Sprint Nextel Corp. (NYSE: S).

However, the company is facing stiff competition from the low-cost Asian manufacturers, including ZTE and Huawei Technologies. Moreover, in recent times, most smartphones have inbuilt hotspot facilities, thus completely bypassing the need for any MiFi modem.

In order to boost its top line, the company is continuously upgrading its software and launching innovative devices in an attempt to drive the Mi-Fi usage.

Currently, Novatel Wireless has a Zacks Rank #3 (Hold).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

SOURCE Zacks Investment Research, Inc.



RELATED LINKS
http://www.zacks.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.