The Zacks Analyst Blog Highlights: E. I. du Pont de Nemours, Dow Chemical, BASF, Comcast and Netflix

News provided by

Oct 22, 2012, 09:30 ET

CHICAGO, Oct. 22, 2012 /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 E. I. du Pont de Nemours and Company (NYSE:DD), The Dow Chemical Company (NYSE:DOW), BASF SE (OTC:BASFY), Comcast Corporation (Nasdaq:CMCSA) and Netflix, Inc. (Nasdaq:NFLX).

(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 Friday's Analyst Blog:

Earnings Preview: DuPont

Chemical and industrial products behemoth E. I. du Pont de Nemours and Company (NYSE:DD) is scheduled to report its third-quarter 2012 results before the market opens on Tuesday, October 23. The Zacks Consensus Estimate for the quarter is 46 cents per share, representing an estimated year-over-year decline of 33.5%.

With respect to earnings surprises, the company has surpassed the Zacks Consensus Estimate in all the trailing four quarters. This is reflected in the average positive earnings surprise of 8.63%.

Previous Quarter Performance

DuPont reported adjusted earnings of $1.48 per share in the second quarter of 2012, exceeding the Zacks Consensus Estimate of $1.46 and the year-ago earnings of $1.37 per share. Growth was primarily driven by strong performance in agriculture, food and bioscience businesses, along with the company's advanced materials business, which witnessed healthy results despite weak European markets.

Including one-time items, earnings came in at $1.25 per share versus $1.29 in the prior-year quarter. The year-over-year drop reflects lower sales volumes across several segments and weak demand for titanium dioxide, especially in Europe and Asia.

Net sales grew 7% year over year to $11,006 million, driven by price hikes and portfolio changes, partially offset by unfavorable currency impact and lower sales volumes. However, sales missed the Zacks Consensus Estimate of $11,252 million.

Company's Guidance

DuPont expects full-year 2012 adjusted earnings to come in at the lower end of its previous outlook of $4.20 to $4.40 per share (excluding one-time items), due to macroeconomic and currency-related uncertainties and a higher tax rate.

Estimate Revisions Trend

Agreement

Estimates for DuPont show limited movements over the past week. Over the last 7 days, there has been no upward revision in the third quarter estimate by any of the 14 analysts covering the stock. However, two analysts have reduced their forecasts over the same period. For 2012, none of the 11 analysts revised their estimates in either direction.

Estimates for the third quarter elicit a comprehensive downward drift over the past month with 8 analysts lowering their forecasts while none moving in the opposite direction. Estimates for 2012 demonstrate a negative bias over the last 30 days with 5 analysts lowering their forecasts while none taking the opposite route.

Magnitude 8 cents

Estimate for fiscal 2012 has not shown any movement over the last week. Over the last month, estimate for the year has decreased by 15 cents. The current Zacks Consensus Estimates for 2012 is $3.98, representing a projected year over year increase of 1.23%.

Our View

DuPont successfully completed the acquisition of Danisco in May 2012, which led to increased earnings during the second quarter. The company has adopted aggressive acquisition and joint venture strategies to facilitate its transformation from an industrial chemical maker to one that has diversified businesses ranging from bulletproof vests to solar panel films.

The company is currently pursuing an aggressive cost-cutting strategy by reducing fixed costs, retrenching employees, restructuring work schedules and improving working capital productivity.

Also, markets for the company's agriculture and food businesses continue to be strong. However, DuPont faces stiff competition from The Dow Chemical Company (NYSE:DOW) and BASF SE (OTC:BASFY), in addition to weakness in the housing and construction markets. Moreover, sluggish economic conditions might prove to be headwinds for the company.

Higher energy and raw material costs, if not offset fully by the increase in prices, may have a significant impact on the company's results. The demand of titanium dioxide, which is used to give paint and other coatings a white hue, remained weak in the second quarter of 2012 leading to lower volumes in the performance chemicals business.

Currently, we have a long-term (more than 6 months) Neutral recommendation on DuPont. The stock currently holds a Zacks #5 Rank, reflecting a short-term (1 to 3 months) Strong Sell rating.

Comcast to Expand Xcaliber Service

Continuous loss of video subscribers has forced Comcast Corporation (Nasdaq:CMCSA) – the largest cable MSO in the U.S., to enhance its service offerings by promoting cloud-based service to its cable customers.

Comcast boasts a massive video subscriber base of nearly 22.1 million. The company is offering its cable TV service through its set-top boxes installed in millions of household in the U.S.

However, with the advent of online video distribution companies like Netflix, Inc. (Nasdaq:NFLX) and Hulu, coupled with higher proliferation of smartphones and tablets, the concept of watching TV has completely changed. Moreover, continuous rollout of 3G/4GLTE technology has further accelerated the data speed, which resulted in incremental video subscriber churn rate.

So, to counter such stiff competition, Comcast is constantly launching several innovative services. One among them is the next-generation web-capable platform called "Xcalibur" or X1, which offers a hybrid IP/QAM video gateway with an advanced user interface and has the ability to port third-party apps that tie into a cloud-based infrastructure.

Comcast launched its major innovative product called Xfinity Streampix, a subscription based on-demand video streaming service for TV sets and broadband enabled devices. Through this, a person can watch TV shows anytime and anywhere he/she prefers to watch.

We believe that the idea to move most of Comcast apps to its cloud platform X1 will not only reduce the company's cost of developing advanced set top boxes, but will also improve the quality of its services. Subscribers will also be able to access the service anytime and anywhere they feel like, hence reducing subscriber churn rate.

Currently, we are maintaining our long-term Neutral recommendation on Comcast. Comcast has a Zacks#2 Rank, implying a short-term Buy rating on the 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.