Zacks Bull and Bear of the Day Highlights: Lindsay, Mellanox Technologies, Exelon, TECO Energy and Otter Tail
CHICAGO, Feb. 5, 2013 /PRNewswire/ -- Zacks Equity Research highlights Lindsay Corporation (NYSE: LNN) as the Bull of the Day and Mellanox Technologies, Ltd. (Nasdaq: MLNX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exelon Corporation (NYSE: EXC), TECO Energy Inc. (NYSE: TE) and Otter Tail Corporation (Nasdaq: OTTR).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Lindsay Corporation (NYSE: LNN) delivered a big fiscal first quarter earnings beat on January 8. The company, which provides irrigation systems and infrastructure products, experienced strong top-line growth and saw profit margin expansion in the quarter, leading to a 400% increase in earnings per share.
Earnings estimates jumped significantly higher after the beat, sending the stock to a Zacks Rank #1 (Strong Buy).
Lindsay Corporation manufactures irrigation equipment primarily used in agricultural markets. The company also manufactures infrastructure and road safety products through its wholly owned subsidiaries, Barrier Systems Inc. and Snoline S.P.A. Linsday Corporation was founded in 1954 and has a market cap of $1.2 billion.
Mellanox Technologies, Ltd. (Nasdaq: MLNX) delivered mixed fourth quarter results on January 23. Revenue was mostly in-line with expectations, but earnings per share fell well short of the Zacks Consensus Estimate. And the company's Q1 revenue guidance was significantly below consensus, prompting a flurry of negative estimate revisions from analysts. It is a Zacks Rank #5 (Strong Sell).
Mellanox Technologies supplies end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Fourth quarter revenues surged 68% to $122 million, ahead of the consensus of $120 million. However, the gross profit margin declined 50 basis points quarter-over-quarter to 70.0%. Earnings per share came in at 47 cents, missing the Zacks Consensus Estimate of 55 cents.
On the conference call, management provided weak Q1 revenue guidance, and analysts unanimously cut their estimates for both 2013 and 2014. The 2013 Zacks Consensus Estimate is now $1.43, down from $3.27 before the report. And the 2014 consensus slid from $4.39 to $2.35. It is a Zacks Rank #5 (Strong Sell).
Latest Posts on the Zacks Analyst Blog:
Exelon Likely to Miss
Exelon Corporation (NYSE: EXC) will release its fourth quarter 2012 financial results before the market opens on Feb 7, 2013. In the prior quarter, this electric utility reported an earnings surprise of 6.94%. Exelon Corporation currently has a Zacks Rank #3 (Hold). Let's see how things are shaping up at Exelon prior to this announcement.
Factors to Consider This Quarter
As in the preceding quarter, the accretive benefits from the merger with Constellation are expected to boost results.
However, the sluggish pace of economic recovery in the U.S. has forced Exelon to reschedule its long-term capex plans. The slackness in demand has led Exelon to delay the completion of three projects.
Like other utilities based in the East Coast, the aftermath of Hurricane Sandy will impact the results of the company in the fourth quarter of 2012.
Our proven model does not conclusively show that Exelon Corporation is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here.
Negative Zacks ESP: This is because the Most Accurate estimate stands at 63 cents while the Zacks Consensus Estimate is higher at 65 cents. That is a difference of -3.08%.
Zacks Rank #3 (Hold): Exelon's Zacks Rank #3 enhances the possibility of an earnings surprise. However the negative ESP complicates the forecasting power making surprise prediction difficult.
We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -3.08% lowers the possibility of an earnings surprise.
Other Stocks to Consider
Other companies you may want to consider on the basis of our model which shows that they have the right combination of elements to post an earnings beat this quarter are as follows:
TECO Energy Inc. (NYSE: TE) has earnings ESP of +14.29% and Zacks Rank #3 (Hold).
Otter Tail Corporation (Nasdaq: OTTR) has earnings ESP of +6.67% and Zacks Rank #3 (Hold).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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