The Zacks Analyst Blog Highlights: Microsoft, Google, Apple, Research In Motion and Fortune Brands Home & Security

Apr 02, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, April 2, 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 Microsoft Corp. (Nasdaq: MSFT), Google (Nasdaq: GOOG), Apple (Nasdaq: AAPL), Research In Motion (Nasdaq: BBRY) and Fortune Brands Home & Security, Inc. (NYSE: FBHS).


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Here are highlights from Monday's Analyst Blog:

Educators Adopt Microsoft Windows 8

The world's largest software maker Microsoft Corp. (Nasdaq: MSFT) announced that 10 K–12 school districts and higher-education institutions across the U.S. are deploying its OS Windows 8. Higher education institutions such as the Apollo Group, Atlanta Public Schools, Barry University, Fargo Public Schools, Fresno Unified School District and the Jackson-Madison County School among others have adopted Windows 8 OS.

Windows 8 is playing a major role in helping schools to upgrade learning tools by providing support for new education standards, online assessment and helping the switch to digital learning through a new platform for easy content creation and consumption.

Educational institutions are deploying Windows 8 for different purposes. The Atlanta Public Schools, Ga opted for the solution to provide its students access to their desktop, Office 365 Education and Office Web Apps from school or any offsite PC easily. The San Antonio Independent School District chose the solution to provide its 22,000 students access to Windows 8 tablets in its 33 libraries to encourage reading and communication among students.

Currently, just like other PC makers, Microsoft is also battling the slump in the PC market caused by the sluggish economy. To make matters worse, tablets continue to cannibalize its core PC market. Although Microsoft has launched its own mobile devices (both tablet and smartphone), it will have to deal with significant competition in these markets..

According to a report by IDC, Google's (Nasdaq: GOOG) Android OS shipments touched 497.1 million units in 2012, up 104.1% year over year. In the process, it captured 68.8% market share, followed by Apple's (Nasdaq: AAPL)  iOS, which managed to hold on to an 18.8% share and Research In Motion's (Nasdaq: BBRY) OS 4.5%. The Windows OS lagged far behind with a mere 2.5% share.

However, Microsoft's growing clout in the academic and government verticals, as well as steady progress in the consumer hardware business bode well for longer-term growth.

Microsoft remains one of the best positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. We believe that Microsoft's current investments are supported by its strong balance sheet and expect these to drive the next growth phase, improving prospects of market share gains.

Microsoft reported revenues, excluding deferrals, of $21.46 billion in the second quarter of fiscal 2013, up 34.0% sequentially and 2.7% from last year, in line with our estimates. All except the Entertainment & Devices segment grew both sequentially and from the year-ago quarter.

Microsoft has a Zacks Rank #3 (Hold).

FBHS Upped to Strong Buy

Zacks Investment Research upgraded Fortune Brands Home & Security, Inc. (NYSE: FBHS) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

With signs of recovery in the U.S. housing and construction market, Fortune Brands Home & Security is now looking much stronger. Shares of this provider of home and security products for use in residential home repair, remodeling, new construction, and security have amassed an impressive year-to-date return of 21.8%.

Created in Oct 2011 by spinning off from Fortune Brands, the company expects 6% – 8% growth in 2013 for its home products in the U.S. market, banking upon the resurgence of the housing sector.

Moreover, the company whose brands include Master Lock, MasterBrand cabinets, Simonton windows and Therma-Tru entry door systems, has outperformed the Zacks Consensus Estimate in 4 out of 5 quarters. Fortune Brands Home & Security has beaten the Estimate by an average of 38.8% in the last 5 quarters. The long-term expected earnings growth rate for the stock is 16.6%.

In the last concluded quarter, it outpaced the Zacks Consensus Estimate by 4.6%. The company declared impressive fourth-quarter 2012 results on Jan 31, 2013, wherein earnings of 23 cents a share came a penny ahead of the Zacks Consensus Estimate and rose 35.3% from the prior-year quarter led by the 2 major housing segments, Kitchen & Bath Cabinetry and Plumbing.

Net sales of $947.9 million surpassed the Zacks Consensus Estimate of $927 million, and rose 8.2% year over year. Kitchen & Bath Cabinetry net sales climbed 12.5%, Plumbing & Accessories net sales jumped 14.9%, Advanced Material Windows & Door Systems net sales inched up 1.4%, but Security & Storage net sales fell 4%.

Management forecasted high-single-digit growth in net sales, and projected earnings between $1.13 and $1.23 per share.

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