The Zacks Analyst Blog Highlights: Clorox Corporation, Colgate-Palmolive, Procter & Gamble, Yahoo! and Microsoft

News provided by

Jul 20, 2011, 09:30 ET

CHICAGO, July 20, 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: Clorox Corporation (NYSE: CLX), Colgate-Palmolive Co. (NYSE: CL), Procter & Gamble Co. (NYSE: PG), Yahoo! (Nasdaq: YHOO) and Microsoft (Nasdaq: MSFT).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday's Analyst Blog:

Clorox Rejects Icahn Offer

Clorox Corporation (NYSE: CLX) rejected the recent offer of a conditional acquisition from activist investor Icahn Enterprises L.P. Icahn offered $76.50 per share for Clorox, the offer being subject to due diligence, financing and other conditions. After evaluating and discussing the proposal, Clorox's financial and legal advisers came to the conclusion that the offer undervalues the company.

The advisers pointed out that the company to its credit continues to create shareholder value in the form of dividends and share repurchases. From fiscal 2006 to date, the company has distributed $2.6 billion in cash to stockholders in the form of dividend payouts and share repurchases. The company has consistently increased its dividends, doubling it from $1.20 to $2.40 per diluted share over the past five years

Clorox is one of the world's leading manufacturers of consumer products. Its strong portfolio of brands, including Clorox, Glad, Brita, Armor All, Burt's Bees, STP and Kingsford, offers a competitive edge to the company and bolsters its well-established position in the market.

Moreover, Clorox has established definite financial goals to measure its progress. These goals include 3% to 5% annual sales growth before acquisitions, and 75 to 100 basis points of annual improvement in the operating margin. It speaks for the company that it has competed effectively with peers of the likes of Colgate-Palmolive Co. (NYSE: CL) and Procter & Gamble Co. (NYSE: PG).

We maintain a long-term Neutral recommendation on Clorox Corporation. Moreover, the company has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

Yahoo! Reports In-Line, Misses on Revenue

Yahoo! (Nasdaq: YHOO) reported second quarter EPS of 18 cents, in-line with the Zacks Consensus Estimate. This snaps the company's streak of five consecutive positive earnings surprises.

It was an 18% increase over the same quarter in 2010, however.

Revenue Falls Short

Revenue excluding traffic acquisition costs (revenue ex-TAC) came in at $1.076 billion, a 5% decline from the same quarter in 2010. Revenue fell short of the Zacks Consensus Estimate of $1.104 billion.

The decline was due in large part to the revenue share related to the search agreement with Microsoft (Nasdaq: MSFT). Under the terms of the deal, Microsoft receives $12 of every $100 in ad revenue generated from clicks alongside ads next to search results.

Excluding this item and other special items, revenue ex-TAC for the first quarter of 2011 rose 1% year-over-year.

Overall, search revenue ex-tac fell 15% from the same quarter in 2010 but jumped 31% from Q1. Display revenue, which accounted for 43% of total revenue, climbed 5% year-over-year but fell 1% from the previous quarter.

Meanwhile, operating income increased 9% over the second quarter of 2010 due to lower operating expenses.

Buying Back Shares

Yahoo! repurchased 30 million shares in the quarter for $472 million. Most of these repurchases came from its existing cash balance as free cash flow for the quarter came in at just $96 million, 25% below the same period in 2010.

The company ended the quarter with $3.255 billion in cash, cash equivalents, and marketable securities.

Outlook

Management expects third quarter revenue ex-TAC between $1.050 billion and $1.100 billion. Total expenses less TAC are expected to be in the range of $915 million to $935 million.

The company projects operating income between $135 million and $165 million.

It did not give specific EPS guidance, but the Zacks Consensus Estimate for the third quarter is currently 19 cents.

Shares were down more than 2% after hours. Yahoo! is a Zacks #3 Rank (Hold) stock.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

SOURCE Zacks Investment Research, Inc.