The Zacks Analyst Blog Highlights: Boeing Company, General Dynamics, Lockheed Martin, Northrop Grumman and Patterson Companies

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May 27, 2011, 09:30 ET

CHICAGO, May 27, 2011 /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: Boeing Company (NYSE: BA), General Dynamics Corp. (NYSE: GD), Lockheed Martin Corporation (NYSE: LMT), Northrop Grumman Corporation (NYSE: NOC) and Patterson Companies Inc. (Nasdaq: PDCO).

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Here are highlights from Thursday's Analyst Blog:

Will Boeing 787 Fly by August?

The wait for Aerospace giant Boeing Company's (NYSE: BA) 787 Dreamliner is about to come to an end. The company and Japan's All Nippon Airways have agreed to work together to prove the readiness of the aircraft to ensure its entry into service on a commercial basis.

The companies will use a second flight test aircraft, known as ZA002, and simulate in-service operations across several airports in Japan in a service-ready operational validation. The week of July 4 has been decided upon for the validation, which is expected between Haneda Airport in Tokyo and airports in Osaka (Itami and Kansai), Okayama and Hiroshima.

The 787 Program of Boeing is currently running three years behind schedule and the launch customer All Nippon Airways is eager to introduce this airplane in its service fleet. All Nippon Airways has already placed an order for 55 787 Dreamliners, with a view to strengthen its fleet and augment its growth and expansion plans.

This is the first passenger jetliner manufactured mostly of lightweight and environmentally friendly composite material; a welcome change from traditional materials like aluminum and titanium. Despite its delays, the new airplane was preferred by airline companies at it also promises fuel efficiency, consuming 20% less fuel than the airplanes of its peers.

Currently, Boeing has 835 net orders for the 787. Perhaps because of the postponement, the jetliner's orders are in the negative from 2009 and the company saw 12 cancellations for it since the beginning of 2011. The 787 Dreamliner can be configured in two versions, a 787-8 priced at $185.2 million will carry 210–250 passengers and a 787-9 priced at $218.1 million will fly around 300 people.

Boeing expects its Commercial Airplanes segment to generate revenue in the range of $36–$38 billion in 2011 and deliveries to range from 485–500 airplanes, including first delivery of 787 and 747-8 airplanes.

The 787 program got delayed for a number of reasons, from the hold-up in availability of engines to faulty parts supplied by vendors. Keeping all these delays behind, the company now looks forward to delivering its first airplane to All Nippon Airways in August to September.

The Boeing Company currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with the likes of General Dynamics Corp. (NYSE: GD), Lockheed Martin Corporation (NYSE: LMT) and Northrop Grumman Corporation (NYSE: NOC).

Based in Chicago, The Boeing Company designs and produces commercial airplanes, defense systems, and civil and defense space systems.

Patterson Cos Tops Estimates

Patterson Companies Inc. (Nasdaq: PDCO) finished fiscal 2011 on a high note. The Minnesota-based distributor of dental and veterinary products posted fourth-quarter fiscal 2011 (ended April 30) earnings per share of 53 cents, ahead of the Zacks Consensus Estimate of 51 cents and the year-ago earnings of 52 cents. Net income edged up roughly 1.5% year over year to $62.7 million owing to higher sales.

For fiscal 2011, earnings per share of $1.89 beat the Zacks Consensus Estimate by a penny while exceeded the year-ago earnings of $1.78. Profit climbed 6% year over year to $225.4 million.

Revenues

Revenues for the quarter climbed 8.7% year over year to roughly $883.8 million, surpassing the Zacks Consensus Estimate of $847 million. For the full year, revenues rose 5.5% year over year to $3,415.7 million, also beating the Zacks Consensus Estimate of $3,380 million.

Revenues in the fourth quarter were driven by growth across the board. Patterson registered healthy growth in its dental technology equipment business, which bounced back from a soft third quarter.

By product catergory, revenues from consumable and printed products rose 7.6% year over year to $578.9 million. Equipment and software sales surged 14.8% to $232.5 million. Other revenues increased modestly to $72.4 million.

Segment Analysis

By business segments, revenues from Patterson's core Dental Supply division rose 4.7% year over year in the quarter to $573.1 million, driven by higher dental equipment and software sales (up 11%). Consumable and printed product sales grew 2.5% to $320.5 million.

Dental equipment revenues were boosted by healthy sales from Patterson's CEREC dental restoration systems and digital imaging products, backed by the company's promotional initiatives and recovery in the North American dental market.

Webster Veterinary Supply unit posted healthy growth in the quarter with revenues climbing 13.6% to roughly $183.9 million, buoyed by solid sales of consumable supplies (up 12%) and veterinary equipment and software (up 41%).

Patterson's Rehabilitation Supply ("Patterson Medical") business continues its strong growth momentum with sales cruising 22.4% year over year to roughly $126.8 million, bolstered by the acquisition of DCC Healthcare.

Guidance

Looking ahead, Patterson expects earnings per share of between $1.90 and $2.00 for fiscal 2012. The guidance is below the current Zacks Consensus Estimate of $2.08. Moreover, the company stated that fiscal 2012 will be a 52-week sales year versus 53 weeks in fiscal 2011.

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