The Zacks Analyst Blog Highlights: Honda Motor, VistaPrint N.V., AGCO Corporation, EI DuPont de Nemours and Lexmark

Aug 04, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Aug. 4, 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 Honda Motor Co. (NYSE: HMC), VistaPrint N.V. (Nasdaq: VPRT), AGCO Corporation (NYSE: AGCO), EI DuPont de Nemours & Co. (NYSE: DD) and Lexmark Inc. (NYSE: LXK).

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Here are highlights from Wednesday's Analyst Blog:

Honda's Profit Plunges 88%

Honda Motor Co. (NYSE: HMC) posted an 88.3% fall in profit to ¥31.8 billion ($394 million) or ¥17.64 per share (22 cents per share) in the first quarter of its fiscal year ended March 31, 2012 from ¥272.49 billion or ¥150.27 per share in the same quarter of the previous fiscal year. The decline in profit was attributable to the adverse impact of the earthquake and tsunami in Japan on March 11 and unfavorable currency translation effects.

Consolidated net sales and other operating revenues dipped 27.4% to ¥1.71 trillion ($21.24 billion) attributable to the same factors outlined above, despite increased revenues in the motorcycle business. However, at constant exchange rates, revenues decreased 22.7% from the prior year.

Consolidated operating profit plummeted 90.4% to ¥22.6 billion ($280 million) from ¥234.44 billion due to lower sales volume and model mix, increase in fixed cost per unit as production has reduced and the unfavorable foreign currency effect, despite a fall in selling, general and administrative expenses.

Guidance

Honda, a Zacks #2 Rank (Buy) stock, has projected revenues to fall 2.7% to ¥8.70 trillion in fiscal 2012. Unit sales are expected to rise by 1.26 million to 12.71 million in the Motorcycle segment; fall 77,000 to 3.44 million in the Automobile segment; and go up 566,000 to 6.08 million in the Power Product and Other segment.

Operating profit is expected to decrease 52.6% to ¥270 billion, profit is anticipated to decline by 56.9% to ¥230 billion and earnings per share are expected to be ¥127.61.

VistaPrint Beats, but Guidance Weakens

VistaPrint N.V. (Nasdaq: VPRT) has declared fourth quarter 2011 adjusted earnings of 43 cents per share, handily beating the Zacks Consensus Estimate of 32 cents. Earnings per share (EPS) increased 13% year over year and touched the upper-end of the company's guided range of 38–43 cents. The better-than-expected results were driven by double-digit growth in the top line.

On a GAAP basis, EPS increased 23% to 32 cents during the quarter, in line with the company's guided range of 28–33 cents.

The company registered a 27% year-over-year growth in revenues to reach $208.8 million, including the favorable impact of foreign currency. Revenues surpassed management's guidance range of $202 million to $207 million and the Zacks Consensus Estimate of $204 million. Geographically, VistaPrint derived 57%, 37% and 6% of revenues from North America, Europe and Asia-Pacific markets, respectively.

For full-year 2011, revenue grew 22% year over year to $817.0 million. Adjusted EPS increased 16% to $2.30 while GAAP EPS of $1.83 saw a growth of 23%.

Guidance

For the first quarter of 2012, VistaPrint expects adjusted EPS to be in the 20–30 cent range. On a GAAP basis, the company expects EPS in the range of 7 cents to 17 cents and revenues in the range of $207 million to $215 million.

For full-year 2012, the company expects adjusted EPS in the range of $1.58 to $1.68 per share. On a GAAP basis, EPS is projected between $1.10 and $1.20. Revenue is expected in the range of $980–$1,030 million.

Our Take

VistaPrint's focus on small business markets provides it with ample growth opportunities. The company is also expanding its geographical footprint. However, management commented that 2012 will prove to be  a challenging year for VistaPrint. There are a few planned investments in 2012 that will hurt its bottom line. Revenue growth will also be slower year over year. 

AGCO Guides with Strength

AGCO Corporation (NYSE: AGCO) has reported fiscal 2011 second quarter results, delivering an EPS of $1.36 versus 66 cents in the year-earlier quarter. The quarter noted some special items, excluding which adjusted EPS amounted to $1.35 versus 66 cents in the year-ago quarter.

Total revenue in the reported quarter increased 35.3% year over year to $2.4 billion. Included in the sales was a currency translation impact of 12.9%, excluding which sales increased 22.4% in the quarter.

The EAME region reported the highest improvement in sales of about 39.5% on a year-over-year basis. The North American region reported a 5% improvement in sales, while sales in South America were more or less flat.

Outlook

The company expects farm equipment to continue driving results in fiscal 2011. In Europe, market recovery is likely to drive the results in a positive direction; while North American and South American markets are expected to generate favorable results.

Based on this, AGCO is expecting adjusted EPS of $4.00 for fiscal 2011; while net sales are expected in the range of $8.5 billion to $8.7 billion.

Our Take

With a full product line of farm equipment and a wide network of dealers and distributors, we believe AGCO is well positioned, over the long term, to capitalize on the need for increased food production, driven by worldwide population growth. Moreover, the company is also looking forward to expanding its operations in high-growth emerging markets, which bodes well for future operating performance. We currently have a Zacks #1 Rank (short-term Strong Buy recommendation) on the stock.

AGCO Corporation is a leading manufacturer and distributor of agricultural equipment and related replacement parts. Its product line is categorized under five groups: tractors, replacement parts, combines, application equipment/sprayers and other machinery.

DuPont Increases Product Prices

EI DuPont de Nemours & Co. (NYSE: DD) has announced price increases for all DuPont Ti-Pure titanium dioxide (TiO2) grades sold in North America (United States and Canada) by 10 cents per pound, effective August 15, 2011.

DuPont reported an increase in profit of $1.22 billion or $1.37 per share in the second quarter of 2011 versus $1.16 billion or $1.17 per share in the same quarter of 2010. The profit exceeded the Zacks Consensus Estimate by 4 cents per share.

The improvement in profit was attributable to higher selling prices, increased sales volume and currency benefit, partly offset by higher raw material, energy and freight costs.

Sales in the quarter grew 19% to $10.3 billion, up from the Zacks Consensus Estimate of $9.95 billion. The increase in sales reflected a rise of 2% in sales volume, an increase of 11% in local price, 3% currency benefit and 3% net increase from portfolio changes. Sales in the developing markets rose 29%.

Lexmark to Resume Share Buyback

After reporting an encouraging second quarter last week, Lexmark Inc. (NYSE: LXK) has now announced its intention to resume the share buyback program. In a conference call, the printing solution provider commented that it has managed to generate strong cash as well as maintain a superb liquidity position.

The re-initiation of the share repurchase program is indicative of management's commentary and is a good way of encouraging investor confidence as it would return shareholder value.

The repurchase program had received the board's approval back in May 2008. As per the approval, Lexmark was allowed to buyback an additional $0.75 billion of its Class A Common Stock for a total repurchase value of $4.65 billion.

The authority gives Lexmark the power to selectively repurchase its stock from time to time in the open market or in privately negotiated transactions depending upon market price and other factors.

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