The Zacks Analyst Blog Highlights: American Axle & Manufacturing Holdings, Microsoft, Nokia, Google and Apple

Oct 10, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Oct. 10, 2013 /PRNewswire/ -- 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 the American Axle & Manufacturing Holdings Inc. (NYSE: AXL-Free Report), Microsoft Corporation (Nasdaq: MSFT-Free Report), Nokia (NYSE: NOK-Free Report), Google (Nasdaq: GOOG-Free Report) and Apple (Nasdaq: AAPL-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

American Axle Raised to Strong Buy

On Oct 8, 2013, Zacks Investment Research upgraded American Axle & Manufacturing Holdings Inc. (NYSE: AXL-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

American Axle reported positive earnings surprise in both quarters of 2013. The company reported second-quarter 2013 earnings of 34 cents per share, beating the Zacks Consensus Estimate of 30 cents. However, earnings per share plunged 38.2% from 55 cents per share in the comparable quarter of 2012 (excluding special items).

Revenues went up 8.1% to $799.6 million compared with $739.8 million in the second quarter of 2012.  The results were favorably impacted by recovery in the North American light truck market together with the launch of products ensuring fuel efficiency, reduced emissions and improved safety.

American Axle is undergoing a significant expansion of its manufacturing footprint in Asia, where growing demand for vehicles is boosting production volumes. The company expects to accelerate the expansion of its global manufacturing footprint in Brazil, China, India, Mexico, Poland and Thailand.

American Axle is focused on diversification and geographic expansion. The company's backlog of new and incremental business to be launched between 2012 and 2014 is valued at $1.1 billion. However, weak SUV demand, high commodity costs and pricing pressure by original equipment manufacturers (OEMs) remain causes for concern.

The Zacks Consensus Estimate for American Axle's 2013 earnings per share stands at $1.77, up 48.55% over 2012. The estimate for 2014 is $2.83 per share, up 60.34% year over year.

Is Microsoft Eyeing HTC Devices?

Bloomberg reported that Microsoft Corporation (Nasdaq: MSFT-Free Report) has been in talks with HTC Corporation about the possible addition of its Windows Phone operating system to Android handsets manufactured by HTC at practically no extra cost. This is obviously an attempt on the part of Microsoft to increase its mobile market share. There has been no confirmation of the report from either of the companies.

Microsoft had recently acquired Nokia's (NYSE: NOK-Free Report) handset business for $7.2 billion to facilitate hardware and software integration. It also hoped to target the lower-end of the market, especially in developing countries where Nokia is still a much-loved brand. Nokia's Windows-based phones have also been doing rather well in Europe, so it was expected that more compelling offerings would help the company take market share.

Other phone-makers using the Windows OS would naturally view this as increased competition from Microsoft itself, so this could be the reason Microsoft decided to woo HTC.   

HTC has manufactured both Windows and Android phones in the past. However, seeing the falling demand for Windows Phone, it has not launched any new Windows-based handset since June this year and has no plans of launching any in the near future.

Microsoft normally charges a license fee for every Windows Phone sold but now as an endeavor to boost sales it has even agreed to give HTC certain concessions in the form of reduction or elimination of license fees.

There has been speculation about a hypothetical phone, which may run Windows and Android simultaneously or allow users to select a default system. It is also unclear whether the data for an application running on a specific operating system would be available on the other one, including contact details and photos.

As per reports of market research firm IDC, in the second-quarter of 2013, Google's (Nasdaq: GOOG-Free Report) Android OS was the leading smartphone operating system with a 79% share of the total market, followed by Apple's (Nasdaq: AAPL-Free Report) iOS with a 13% share and Windows trailing behind with 3.7%.

Microsoft Corporation develops, manufactures, licenses, sells, and supports software products. The company operates in five segments: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.

Currently, Microsoft has a Zacks Rank # 3 (Hold).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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