CHICAGO, Nov. 15, 2011 /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 Bank of America (NYSE: BAC), The Boeing Company (NYSE: BA), General Electric Company's (NYSE: GE), General Dynamics Corporation (NYSE: GD) and Lockheed Martin Corporation (NYSE: LMT).
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Here are highlights from Monday's Analyst Blog:
3Q Earnings Good, Not Great
Third quarter earnings season is almost over. Total net income growth has been far higher than expected, although the median surprise and the ratio of positive surprises to disappointments is slightly below normal. Thus, I would characterize the season as good, but not great.
We have had 456, or 91.2%, of the S&P 500 firms reporting so far. The year-over-year growth rate for the S&P 500 (so far) is 16.17%. That is actually well above the 12.33% growth that those same 456 firms posted in the second quarter. However, the second quarter was distorted by some big hits to the financial sector, most notably Bank of America (NYSE: BAC). This time it reported better than expected earnings and did not have the big write off it did in the second quarter. That resulted in a $12 billion swing in total net income between the second and third quarters.
If we exclude the financials, the year-over-year growth rate is just a bit higher at 19.61%, but it represents a slowdown from the second quarter, when growth was 20.74%. The final growth tally for the quarter is likely to be slightly lower than that. The remaining 44 stocks are expected to actually post earnings 5.44% lower than last year, down from positive 7.35% growth in the second quarter. At the beginning of earnings season, growth of 9.7% was expected; 12.2% ex-Financials.
If we combine the already reported results with the expectations, it now looks like the final growth will come in at 14.6%. If the remaining firms surprise to the upside the way the ones that have already reported do, it is not hard to see the final growth coming in at around 15%. The bar for the remaining firms does seem to be set pretty low.
Multi-Billion Dollar Deal for Boeing
The Boeing Company (NYSE: BA) announced that it has received an order from Dubai-based Emirates Airline for 50 long-range, twin-engine jet 777-300 Extended Range aircraft. The order is valued at $18 billion. The aircraft would be powered by General Electric Company's (NYSE: GE) GE90-115B engines.
The order, agreed upon at the Dubai Air Show, is the single largest commercial airplane order in Boeing's history by dollar value. The order also includes an option for an additional 20 of twin-aisle commercial jetliner for about $8 billion.
The 50 airplane order also makes fiscal 2011 the best-selling year for the 777 program, surpassing the previous record of 154 orders set in 2005. With the Emirates order, the 2011 net order book for the 777 currently stands at 182.
Emirates is the world's largest 777 operator with a fleet of 94 777s through direct purchase and lease, plus additional unfilled orders on backlog for 41 777-300ERs previously on order. It is also the only airline in the world to operate every model in the Boeing 777 family, including the 777 Freighter. Emirates took delivery of its first Boeing 777 series aircraft in 1996.
The Boeing 777 is the world's most successful twin-engine, long-haul airplane. The 777-300ER extends the 777 family's span of capabilities, bringing twin-engine efficiency and reliability to the long-range market. The airplane carries 365 passengers up to 7,930 nautical miles or 14,685 km.
Boeing has a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. Besides, it is one of the largest aerospace and defense contractors in the world. Also, its revenues are spread across more than 90 countries around the globe.
Earlier, strong performance from the commercial airplanes business and stable core operations allowed Boeing to register a solid third quarter in 2011. The company's earnings surpassed both the year-ago results and the Zacks Consensus Estimates.
Boeing expects its fiscal 2011 revenue to be in the range of $68 billion – $70 billion. However the company recently raised its earnings per share guidance for fiscal 2011 to $4.30 – $4.40 from the earlier band of $3.90 – $4.10 buoyed by strong core performance across its businesses.
The guidance incorporates the delivery initiation of revenue boosters like the 787 Dreamliner and 747-8 series, which started in the third quarter. However, the company revised the Commercial Airplanes' deliveries guidance for fiscal 2011.
Deliveries for fiscal 2011 are now expected to be approximately 480, down from the earlier range of 485 – 495. The reduction was due to lower planned deliveries on development programs (especially 787 and 747-8 units).
Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. This is in sync with other aerospace and defense behemoths like General Dynamics Corporation (NYSE: GD) and Lockheed Martin Corporation (NYSE: LMT).
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