The Zacks Analyst Blog Highlights: Priceline.com, Orbitz Worldwide, Expedia.com, News Corporation and the Walt Disney Company
CHICAGO, Nov. 12, 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 Priceline.com (PCLN), Orbitz Worldwide (OWW), Expedia.com (EXPE), News Corporation (NWSA) and The Walt Disney Company (DIS).
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Today, Zacks is promoting its ''Buy'' stock recommendations. Four daily picks are offered free.
Here are highlights from Monday's Analyst Blog:
Priceline Signs Deal to Buy Kayak
Priceline.com Inc. (PCLN) announced that it has signed an agreement to buy Kayak Software Corp. for $1.8 billion or $40 per share, in a move to expand its online travel business.
Under the terms of the deal, Priceline will pay $500 million in cash and $1.3 billion in stock. Following the transaction, Kayak shares jumped 27%, while Priceline shares fell about 1.9%, in the extended trading hours. Subject to customary closing conditions and regulatory approval, the buyout is expected to close in the first quarter of 2013.
Based in Concord, Kayak is a leading travel research site that helps consumers to compare prices for airlines, hotels and rental cars from hundreds of websites, including Priceline competitors such as Orbitz Worldwide, Inc. (OWW) and Expedia.com (EXPE). The company recently reported its third quarter profit of $8 million, an increase of 14% from the year-ago quarter.
We believe the deal will likely increase Priceline's market share in a weakening economy. Recently, Kayak announced its expansion into Russia and also acquired travel search companies in Germany and Austria. Considering the condition of the global economy and the fact that Priceline has a significant exposure to the European region, the company needs to increase its market share in other regions.
Upon the completion of the deal, Kayak will continue to operate independently as a Priceline Group company. Management also stated that the acquisition will not have any impact on the company's earnings in 2013.
Priceline.com is one of the leading online travel companies in the world, helping people to shop for travel. We believe that Priceline will continue to invest in the business to push growth and especially to continue its international expansion strategy. Despite a weak macro environment, Priceline reported strong third quarter results with earnings beating the Zacks Consensus by 40 cents (3.5%).
Priceline retains a Zacks #2 Rank, which translates into a short-term Buy rating.
News Corp Acquires ESPN STAR
News Corporation (NWSA) announced the completion of the acquisition of The Walt Disney Company's (DIS) stake in their 16 year-old Asian sports joint venture, "ESPN STAR Sports (ESS)." However, the financial terms of the deal were not disclosed.
ESS was the 50/50 joint venture between Disney's ESPN and News Corporation, providing Asian sports fans a diverse collection of sports programs across 24 countries through 28 networks.
Earlier in June, the company announced that it will acquire ESPN's 50% stake in ESS. ESS, with its right mix of exclusive sporting licenses with top sporting leagues emerged as an industry leader in the pay-TV industry.
With the acquisition, ESS is now the wholly-owned subsidiary of News Corporation. We believe that the buyout will enhance the company's position in sports programming, thus bringing in incremental revenues through advertising and subscriptions.
Further, owing to a mandatory shift to a digital addressable system in India, the move better positions both the companies to independently manage their brands and generate positive cash flows while significantly expanding digital opportunities.
News Corporation strives to add diverse revenue streams to hedge against economic volatility. The company is focusing on the emerging markets to expand its media business, since these regions have millions of viewers. News Corporation's significant international presence has helped it broaden its client base and product portfolio.
The company recently posted first-quarter 2013 earnings of 43 cents a share beating the Zacks Consensus Estimate of 37 cents, and rose 34% from 32 cents earned in the prior-year quarter on the back of double-digit growth across Cable Networks.
Including one-time items, News Corporation posted quarterly earnings of 94 cents a share, soaring from earnings of 28 cents delivered in the year-ago quarter.
News Corporation's total revenue rose 2% year over year to $8,136 million. However, total revenue also fell short of the Zacks Consensus Estimate of $8,175 million
Currently, we maintain a long-term Neutral recommendation on the stock. Moreover, News Corporation holds a Zacks #3 Rank, which translates into a short-term Hold rating.
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