Zacks Bull and Bear of the Day Highlights: Flower Foods, General Cable, Embraer, SkyWest and United Continental Holdings
CHICAGO, May 23, 2013 /PRNewswire/ -- Zacks Equity Research highlights Flower Foods (NYSE: FLO) as the Bull of the Day and General Cable (NYSE: BGC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Embraer S.A. (NYSE: ERJ), SkyWest Inc. (Nasdaq: SKYW) and United Continental Holdings Inc. (NYSE: UAL).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Flower Foods (NYSE: FLO) again delivered outstanding quarterly results and seems to be on track to achieving its long-term objective of double-digit earnings growth.
As a result, estimates have been on the uptrend and the company has maintained its Zacks rank #1 (Strong Buy) since March this year.
Headquartered in Thomasville, GA, Flowers Foods is the second largest producer and marketer of packaged bakery foods in the country. The company operates44 bakeries that produce breads, buns, rolls, snack cakes, and pastries, which are distributed fresh to foodservice and retail customers in the Southeastern, Southwestern, mid-Atlantic states and frozen to national foodservice and retail customers.
Flowers' top brands includeNature's Own,Whitewheat,Cobblestone Mill, Tastykake, Mrs. Freshley's, European Bakers, BlueBird and Mi Casa. Additionally they have a number of regional brands.
Flowers Foods operates though two segments—the Direct Store Delivery Segment handles fresh breads, buns, rolls, and snack cakes that are sold regionally through a system of regional distributors and the Warehouse Segment that is responsible for nationwide distribution.
Disappointing results and downbeat guidance have led to sharp downward estimates revisions, sending General Cable (NYSE: BGC) to a Zacks Rank # 5 (Strong Sell).
Headquartered in Highland Heights, Kentucky, General Cable develops, designs, manufactures, markets and distributes copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets around the world.
The company has disappointed its investors with negative earnings surprises in each of the last four quarters.
Last quarter's results were hurt mainly by foreign currency transaction losses and a higher-than-expected effective tax rate. Weakness in Europe and Latin America operations also impacted the performance. While condition in Europe and Mediterranean region remained challenging, continued political and economic uncertainly hurt operations in Venezuela.
However, results in the company's North America business were stable despite the impact of declining metal prices.
Debt increased sharply from the previous quarter, leading to a relatively higher debt to equity ratio compared with the industry peers.
The company also revised down their current quarter and full year outlook. They now expect adjusted operating income in the range of $70 million to $80 million and adjusted earnings of 0.50 to $0.60 per share. Lower guidance was a result of higher inventory costs and weaker metal prices.
Latest Posts on the Zacks Analyst Blog:
Embraer Clinches Potential $8.35B Deal
Brazilian aircraft manufacturer Embraer S.A. (NYSE: ERJ) clinched a major contract with the world's largest regional airline group SkyWest Inc. (Nasdaq: SKYW) to sell as many as 200 aircrafts. This deal − valued up to $8.3 billion − would revive the Brazilian company's stressed commercial aircraft unit.
The latest contract is considered as one of the largest in Embraer's history and involves an initial order of 40 E-175 jets from Embraer, with deliveries set to begin in the second quarter of 2014 and ending in mid 2015. SkyWest will fly the 40 E-175s for United Continental Holdings Inc. (NYSE: UAL) under a 12-year contract.
SkyWest also placed a provisional order to buy an additional 60 aircrafts, depending on securing contracts with other airlines operators. Per the deal, SkyWest has the option to purchase 100 more aircrafts that would bring the total potential value of the deal to $8.3 billion.
Upon exercising the order for 100 jets − with an estimated value of $4.1 billion at current list prices − Embraer's backlog will be boosted by 20% from its first quarter 2013 backlog of $13.3 billion. For now, the company is putting only the initial 40 jets in its backlog.
The deal will be a shot in the arm for Embraer's commercial aircraft division, which has struggled amid weak global demand. The unit now accounts for only about half of the Brazilian group's revenue.
The company's first-quarter earnings also went down drastically by more than 98% from the year-ago profit. The reported figure also missed the Zacks Consensus Estimate by 60.5%. The lower number was mainly due to the lower number of aircraft deliveries and product mix.
However, a recovery in demand will help the beleaguered company to boost its backlog to the levels seen in 2008 when it peaked at $21.6 billion.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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