The Zacks Analyst Blog Highlights:AT&T, Research In Motion Limited, Walt Disney, Polycom and DuPont
CHICAGO, May 6, 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 AT&T Inc. (NYSE: T), Research In Motion Limited (Nasdaq: BBRY), The Walt Disney Company (NYSE: DIS), Polycom, Inc. (Nasdaq: PLCM) and DuPont (NYSE: DD).
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Here are highlights from Friday's Analyst Blog:
AT&T Slashes Smartphone Prices
Telecom giant AT&T Inc. (NYSE: T) is introducing new promotional plans to accelerate smartphone sales. The company will offer a $100 rebate on the purchase of a new smartphone in exchange for an older one. The offer is available on newly launched smartphones like Samsung Galaxy S 4, Research In Motion Limited's (Nasdaq: BBRY) Blackberry Z10 and HTC One. Currently, these devices come with a two-year agreement at $199.00 but after the exchange offer, AT&T customers can avail them at $99.00.
We believe that the AT&T's current promotional plan will attract customers and result in higher equipment revenues. In addition, these measures would enable the company to strengthen its footprint in the LTE space as most of these new devices support LTE network usage, which make them attractive in the current market. AT&T has benefited significantly through recycling of old devices. According to the company's press release, customers recycled over 3.1 million phones, a record number within a week. This also signifies that the acceleration in smartphone sales has also resulted in higher data revenues for the company as these support enhanced Internet experience on AT&T's advanced networks.
Currently, AT&T boasts the best Internet speeds in the industry, as it is the only U.S. carrier that provides 4G networks through both Long Term Evolution (LTE) and High-Speed Packet Access Plus (HSPA+) technologies. AT&T's LTE networks serve as the benchmark of mobile technology and the life-blood for operators across the world. The company is running ahead of schedule in the deployment of 4G Long-Term Evolution (LTE) services. The company has, currently, covered about 200 million with its LTE services and expects to achieve the target of connecting 90% of 300 million people by 2013-end.
Further, the company is actively working on improving content services for wireless users. The company introduced its new cloud-based Content Delivery Network (CDN) platform in Feb 2013. The attractively priced CDN offers best-in-class digital media solutions. The company also collaborated with Zynga, a popular Web-based social gaming company to offer mobile social gaming options on its Google Android-based smartphones and tablets. Additionally, AT&T inked a multi-year deal with The Walt Disney Company (NYSE: DIS) and entered into a cloud-based video conferencing service agreement with Polycom, Inc. (Nasdaq: PLCM).
We believe these initiatives would support significant market penetration in the wireless space. However, the company suffers constant access line losses, competitive threats, heavy smartphone subsidies and federal regulations. These could hold back its prospects.
AT&T retains a Zacks Rank #3 (Hold).
Excerpts from DuPont's Analyst Day
Chemical titan DuPont (NYSE: DD) divulged its strategic and operational priorities for this year and beyond during its annual investor day in Wilmington, Del. Chairman and CEO Ellen Kullman highlighted three strategic priorities that are aimed at boosting shareholder value and driving multi-year sales and earnings.
Kullman noted that DuPont's priorities are expansion of its leading footprint across the food value chain, reinforcing its leadership position as a provider of differentiated, high-value advanced materials, and development of leading industrial biotechnology capabilities. Boosting R&D returns will be a top priority.
DuPont reaffirmed, at the meet, its compound annual growth rate (CAGR) targets for sales and operating earnings per share of 7% and 12%, respectively. The company said that it is optimistic in achieving these long-term goals given its portfolio strength, scientific capabilities, global reach and strong execution. Prudent cost saving measures and new products will also help in achieving these targets.
DuPont has embarked on an aggressive cost-cutting strategy by reducing fixed costs, retrenching employees, restructuring work schedules and improving working capital productivity. The company expects pre-tax cost savings of at least $300 million from its restructuring measures in 2013. DuPont also has a bevy of new products in its pipeline that are expected to create value for its customers.
Nicholas C. Fanandakis, DuPont's Vice President and Chief Financial Officer, presented long-term profit margin targets for each business segment at the meet. For the agriculture business, the company expects margins of as much as 24% and sales CAGR of up to 10%.
DuPont is witnessing strong momentum in its agriculture business and is seeing healthy demand for its corn hybrids. Strong planting activity by growers across North and Latin America, product innovation, solid order book and healthy supply of seeds and crop protection products strongly positions DuPont in the agriculture market.
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