The Zacks Analyst Blog Highlights: Google, Delta Air Lines, United Continental Holdings, JetBlue Airways and Tumi Holdings

Mar 06, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, March 6, 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 Google (Nasdaq: GOOG), Delta Air Lines (NYSE: DAL), United Continental Holdings Inc. (NYSE: UAL), JetBlue Airways Corp. (Nasdaq: JBLU) and Tumi Holdings Inc. (NYSE: TUMI).


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Here are highlights from Tuesday's Analyst Blog:

Let's Talk About Google

I think we have gotten away from pointing out specific things we see on specific stocks. So I am going to throw out a name and let's all comment on it as to what we see and where we think it's headed and why.

My pick is Google (Nasdaq: GOOG) - maybe you have heard of them. If not, do a Google Search for them. They should appear at the top of the search.

So I like to look at earnings first... and maybe the weakest part of this Zacks Rank #3 (Hold) story is that it has missed in two of the last seven quarters. The miss in the December 2011 quarter saw the stock move lower by 7% while the September 2012 miss pushed the stock lower by 9.75%. The beats, on the other hand, have helped move the stock higher by an average of 4.3%.

The next thing I look to as a growth guy is the revenue line. I see the last three quarters have shown year over year growth of 39%, 51% and 39%. That is pretty solid, but the sequential growth story isn't as nice. The December 2011 quarter saw 8% growth in sales from the previous quarter, which was much better than the 0% growth that was posted for the fourth quarter of 2012. That said, the sequential growth for the June and September quarters was 18%, and that is significant.

So why is this real time? I mean earnings were reported back on January 22, right? Well, I see the stock hitting new all-time highs of $840.15 and I saw where some research analysts have moved targets to $1,000. So that is as real time as it gets.

February Traffic Slows for Delta

Delta Air Lines (NYSE: DAL) posted weak traffic for Feb 2013 due to lackluster performance in the regional arena.

The company's airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – dropped 2.2% year over year to 12.7 billion. Consolidated capacity (or available seat miles/ASMs) for the month fell 5.0% from Feb 2012 to 16.1 billion.

The load factor or percentage of seats filled by passengers, however, went up 220 basis points from the second month of 2012 to 79.1%. Passenger revenue per available seat mile (PRASM) also improved 5.0% year over year, supported by higher corporate revenue and efficient operations in the Transatlantic region. The company registered a completion factor of 99.0%, with nearly 86.1% of the flights on schedule.

For the first two months of 2013, Delta generated RPMs of 26.6 billion (down 1.1% year over year) and ASMs of 33.6 billion (down 3.6% year over year), while load factor was 79.2%, up 200 basis points.

Delta – the second largest airline company in the U.S. after United Continental Holdings Inc. (NYSE: UAL) – is in constant endeavor to improve operating efficiencies and customer experience. Recently, the company revealed plans to operate summer flights from Montana to Atlanta and Los Angeles, from Jun 22.

With a fleet of over 700 aircraft, Delta is concentrating on stepping into various domestic as well as international spots. The company, currently, serves 19 destinations in 59 countries across six continents.

In the coming quarters, we expect Delta to post revenue and earnings growth aided by various strategic actions that include optimization of fleet, capacity discipline, capturing of new markets and profitable takeovers. These innovative and attractive initiatives along with enhanced service offerings will position the company advantageously compared to other industry players such as JetBlue Airways Corp. (Nasdaq: JBLU).

Delta – which collaborated with top brands like Malin+Goetz and Tumi Holdings Inc. (NYSE: TUMI) to offer travel luxuries to BusinessElite flyers – carries a Zacks Rank #2, implying a Buy rating.

Avery currently retains a short-term Zacks Rank #1 (Strong Buy).

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