The Zacks Analyst Blog Highlights: Motorola Mobility Holdings, Verizon Communications, Vodafone Group, Google and Vale S.A

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Sep 09, 2011, 09:30 ET

CHICAGO, Sept. 9, 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: Motorola Mobility Holdings Inc. (NYSE: MMI), Verizon Communications Inc. (NYSE: VZ), Vodafone Group plc. (Nasdaq: VOD), Google Inc. (Nasdaq: GOOG) and Vale S.A (NYSE: VALE).

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Here are highlights from Thursday's Analyst Blog:

Motorola Mobility Enters 4G Era

Motorola Mobility Holdings Inc. (NYSE: MMI) finally entered into next-generation 4G wireless field. Yesterday, the company announced that Verizon Wireless, the largest wireless operator in the U.S., will start selling its much hyped 4G Long-Term Evolution (LTE) capable Droid Bionic smartphone from September 8, 2011. Verizon Wireless is a joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc. (Nasdaq: VOD). Droid Bionic runs on Google Inc. (Nasdaq: GOOG) developed Android operating system.

Droid Bionic was expected to be launched in the second quarter of 2011. However, Motorola Mobility delayed its launch by a quarter after management received quite a few negative feedback for this phone for which it wants to make some changes and improve it further. In the meantime, Samsung Electronics and HTC Corp. came out with their respective 4G LTE capable Android-based smartphones. As a result, Motorola mobility lost some vital market share to those two companies. In last July, management predicted that its third-quarter financial results will be affected due to this delay.

Droid Bionic will be the first Verizon Wireless smartphone, which combines 4G LTE with dual-core 1 GHz processors. At present, this device stands as the thinnest 4G LTE smartphone in Verizon desk. Droid Bionic will cost $299.99 with a new two-year data plan of Verizon Wireless. Several industry analysts expressed their confidence that Droid Bionic may turn out to be game changer for Motorola Mobility. The company earlier declared that it expects its core Mobile Devices segment to achieve profitability in the fourth quarter of 2011, primarily leveraging on Droid Bionic.

Meanwhile, in August 2011, Google has entered into a definitive agreement with Motorola Mobility to acquire it for approximately $12.5 billion. The deal is subject to the regulatory approval and customary closing conditions. We maintain our long-term Neutral recommendation on Motorola Mobility. Currently, it holds a short-term Zacks #3 Rank (Hold) on the stock.

Vale Faces Trouble Overseas

Indonesia, a major importer of iron ore for Vale S.A (NYSE: VALE), has announced its intention to impose a tax or quota on mineral ore exports, ahead of a planned regulation to ban all exports of raw minerals by 2014.

As per the industry ministry of Indonesia, the tax imposition will work as a transition before the export ban, which seems to be a major move to ensure protection for the country's nickel firms, INCO and Antam, and copper miners Freeport McMoRan Copper & Gold and Newmont Corp.

The planned 2014 export ban is part of a mining and coal law already introduced in 2009 in Indonesia. According to the law, the miners are required to process coal and minerals into higher value products before exporting them to boost the country's mining sector revenue. This move of the Indonesian government is anticipated to give Vale a tough blow going forward.

The new transitional reform to impose a tax or quota is estimated to be high on mining products like iron ore, bauxite, and other metals like nickel and copper. The new regulation is also anticipated to take the form of an obligation to sell part of the firms' output to the domestic market. However, risk remains as the new government regulations may take a longer time to be approved or even may fail to materialize.

Of late, Vale was trying to force its partner Aquila Resources to vote on a bid plan for developing the Eagle Downs coal project, in order to ensure secured access to rail and port capacity in Australia. However, The Queensland Supreme Court in the Australian court has blocked the move.

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