The Zacks Analyst Blog Highlights: Google, Motorola Mobility, Apple, Cisco Systems and NetApp

CHICAGO, April 13, 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 Google, Inc. (Nasdaq: GOOG), Motorola Mobility (NYSE: MMI), Apple (Nasdaq: AAPL), Cisco Systems (Nasdaq: CSCO) and NetApp (Nasdaq: NTAP).

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Here are highlights from Thursday's Analyst Blog:

Google Mixed, Announces 2-for-1 Split

As search engine king Google, Inc. (Nasdaq: GOOG) announced 1st quarter earnings results after the bell Thursday and market bloggers grabbed our calculators to check whether the company topped the Zacks Consensus Estimate on earnings and revenue, Google subsequently sprung unexpected news of a 2-for-1 stock split of GOOG shares.

Diluted earnings per share reached $8.75 for GOOG's Q1 results (excluding traffic acquisition costs, or TAC), on $8,140 million in revenues. Thus, it amounts to a mixed report: the Zacks Consensus Estimates were expecting $8.24 per share (ex-TAC) on $8,150 million, so while Google managed to post a 6.2% positive earnings surprise, it was a tick below expectations on the top-line.

But the 2-for-1 stock split is what has sent shares higher in the after-market, even following a 2.37% gain in regular Thursday trading. The new shares will be non-voting capital stock and will halve the rich $650+ price tag for future buyers. Some 20 minutes after Google made the announcement, shares have gained an extra 1%.

Much will need to be explained in the conference call, such as the status of Google's plans to acquire Motorola Mobility (NYSE: MMI), on which regulators had signed off back in February, but a deal has yet to be made. Is Google serious about keeping this company and its still relatively large staff, or is it merely trying to find a way to hang onto the rights to Motorola's many patents?

Also, though Google continues to grow, its average cost per click is down for the second quarter in a row: -12% year over year and -6% sequentially. However, Google reported better-than-expected 39% volume growth for the quarter.

Analysts had been upwardly revising earnings expectations over the past month, but this is after heavy downward revisions earlier in the quarter. Today's $8.75 per share actual was still a penny below what analysts were expecting 90 days ago.

Ultimately, how the stock split pays out for investors -- as opposed to, say, how issuing a dividend yield has worked out for Apple (Nasdaq: AAPL) shares -- is what will drive Google headlines through Friday and perhaps beyond.

NetApp Joins with Cisco

Networking major Cisco Systems (Nasdaq: CSCO) joined hands with NetApp (Nasdaq: NTAP), to introduce a new cloud product, which is expected to help more customers accelerate their transition to the cloud. The companies recently announced plans to extend the FlexPod with a series of new pre-validated design architectures priced and sized for smaller workloads.

This new FlexPod series is built on the background of a flexible, scalable, shared infrastructure that combines technologies such as computing, networking and storage solutions offered by the tech major.

The entry level flexpod offered by the tech major, has the offering price and scale that is best suited for the business application workloads having 500 to 1000 users, and provides solution that help customers to invest only in infrastructure required for simple and rapid scaling to meet growing demands as different companies have different business needs.

This new flexpod has gained in popularity since the companies joined hands to first launch it in November 2010. Now, the FlexPod is available worldwide through more than 500 FlexPod partners and more than 850 customers use FlexPod for their data center infrastructure – which has resulted in staggering growth of 400% in less than a year.

Although new product launches and collaborations work in favor of the company, NetApp is in a vulnerable position due to its significant exposure to Europe (roughly 33% contribution) and the U.S. public sector (~15%). These two sectors are fighting with debt issues and constrained budgets, respectively, impacting NetApp's revenue growth trajectory.

NetApp's third quarter's results were modest, with the bottom line missing the Zacks Consensus Estimate, while the top line matched. Despite a high year-over-year revenue growth, NetApp posted a bottom-line decline, which was mostly due to higher costs and tax. Moreover, management guided its next quarter cautiously, keeping in mind the ongoing macro uncertainty caused by the European debt crisis, federal budget cuts and Thailand flood (which is limiting component availability).

But we believe that NetApp will be able to sustain its growth story and remain a key player in the virtualization and network storage market based on product launches and strategic acquisitions. With its latest Engenio takeover, NetApp will now be able to address the video storage market as well as high performance computing applications like genomics sequencing.

NetApp currently carries a Zacks #3 Rank (short-term Hold recommendation).

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