NEW YORK, Nov. 26, 2013 /PRNewswire/ -- S&P Capital IQ Equity Research has published semi-annual surveys for several industries, including Aerospace & Defense, Broadcasting, Cable & Satellite, Communications Equipment, Computers (Consumer Services & the Internet), Computers (Hardware), Insurance (Life & Health), Investment Services, and Semiconductors.
These industry surveys, which are about forty pages long and written by S&P Capital IQ equity analysts, include sections on each industry's current environment, an industry profile, industry trends, how the industry operates, key industry ratios and statistics, how to analyze a company in that industry, industry references, and comparative company analysis.
Following are short excerpts from each of the industry surveys listed above.
Aerospace & Defense: S&P Capital IQ has a positive fundamental outlook on the commercial aerospace cycle. We believe that the underlying drivers of the commercial aerospace industry—improving global economic growth, an emerging global middle class, persistently high energy prices, and an aging fleet of commercial aircraft, combined with recovering aftermarket growth—will provide lift to the industry on the back of potentially record 2013 new aircraft orders and strengthening earnings growth.
Broadcasting, Cable & Satellite: After a significant run-up in stock valuations since the Great Recession, S&P Capital IQ maintains a cautious near-term outlook for the broadcasting, cable, and satellite universe. Our expectations reflect a continued (but slowing) advertising rebound and a growing stream of retransmission and syndication revenues for broadcasters, as well as relatively healthy cable and satellite subscriptions, versus increased audience fragmentation, potentially disruptive technologies, lingering concerns with "cord cutting," and some regulatory overhang.
Communications Equipment: In our view, the continued rapid consumption of network capacity, buoyed by the proliferation of tablets, smartphones, and other connected devices, is a solid long-term growth driver for the industry. We see an improving near-term operating outlook. Specifically, we think spending among U.S. service providers has started to pick up. Further, we believe the European macro environment has stabilized. While near-term industry spending may be choppy, we see strong positive secular demand trends toward virtualization and data center transformation.
Computers (Consumer Services & the Internet): With the Great Recession officially over, we believe many Internet businesses have actually benefited at least somewhat from what has happened over the last few years. We believe the Internet has continued to develop in terms of speed and accessibility, and has become increasingly versatile and important. In our view, Internet companies have largely gained market share against their more conventional competition, have sharpened their strategies and streamlined operations, and have accumulated considerable capital. In part as a result, in early 2010, we raised our fundamental outlook on the Internet Software & Services sub-industry to positive from negative.
Computers (Hardware): We think personal computer (PC) sales will be challenged going forward, hurt by the cannibalization on lower priced tablet devices. Personal computers represent a big part of the industry and we project that shipments will decline 10% in 2013. Since mid-2010, PC unit sales appear to have suffered from consumers substituting media tablets, which are smaller and less robust than traditional PCs and not generally counted as PCs, for laptop PCs. While this substitution effect may pressure PC sales, the computer hardware industry overall should benefit from the growth in tablets. In addition, the growing popularity of robust mobile computing devices stimulates data traffic to be handled by servers, creating another spur to the industry.
Insurance (Life & Health): Although we expect low interest rates to continue to weigh on net interest income, we see the pressure easing, since we think that interest rates are now more likely to rise than fall, which should lead to higher investment yields on this new money. We also expect efforts by various companies to rationalize their businesses—by revamping products, raising prices, and exiting high-risk or non-strategic businesses—to bear fruit. Further, we see companies using excess capital to increase their dividends as well as repurchase shares, which should benefit earnings per share (EPS) growth.
Investment Services: Several factors are key contributors to a potential increase in underwriting and advisory business, in our view. We think there is a positive correlation between equity market appreciation and initial public offering (IPO) activity, boosting private companies' incentive to go public when valuations are higher. We also view high levels of cash on corporate balance sheets as additional support for M&A. If macroeconomic drivers and the capital markets continue to improve, we think companies will begin to put this cash to work with either strategic or tactical M&A. Potentially, the reduced risks of U.S. budget and European sovereign issues may enable the pipeline for M&A and new equity offerings to increase, in our opinion.
Semiconductors: We expect stabilizing economic conditions to result in 3.7% revenue growth in 2013, up from a decline of about 1% in 2012, and forecast 3.9% growth in 2014. After a weak 2012, we are seeing sequentially improving sales through this year. We expect a fairly lean inventory supply chain to leave the supply-demand balance even to slightly favorable for inventory replenishment, which should contribute to potential upside as demand improves.
For more information on Industry surveys subscriptions and platforms, contact Equity Research sales at [email protected] or 877-219-1247.
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