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 Southwest Airlines Co. (NYSE: LUV), United Continental Holdings Inc. (NYSE: UAL), Delta Air Lines Inc. (NYSE: DAL), Boeing Co. (NYSE: BA) and Whirlpool Corporation (NYSE: WHR).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Thursday's Analyst Blog:
Southwest Traffic Falls in March
Traffic at Southwest Airlines Co. (NYSE: LUV), the largest U.S. low-cost carrier, inched down 0.9% year over year in March. Airline traffic is customarily measured in billions of revenue passenger miles.
On a year-over-year basis, consolidated capacity (or available seat miles) fell 0.9% and the load factor (percentage of seats filled by passengers) deteriorated 10 basis points (bps) to 81.8%. Passenger revenue per available seat mile (PRASM) rose 5% year over year in March compared to increases of 4% in February and 7% in January.
In the first quarter of this year, traffic dipped 0.1% on load factor decline of 110 bps year over year partially offset by capacity increase of 1.2%. In addition, Southwest expects strong passenger revenue in the first quarter. Management did not provide any specific projection for the first quarter unit costs but it expects to register higher growth compared to $0.0783 (excluding fuel and special item) in first quarter 2011.
The company, slated to release first quarter earnings on April 19, does not expect to report profits due to high fuel costs. The Zacks Consensus estimates a loss of 5 cents for the first quarter, representing a substantial 266.67% decline on an annualized basis.
Fuel costs, including fuel taxes are estimated at approximately $3.50 per gallon, which is higher than its previous expectation of $3.35 per gallon. Coupled with surging fuel prices, Southwest expects non-fuel costs to grow modestly this year primarily due to higher salaries, wages and benefits, and airport costs.
Although Southwest is poised to benefit from fleet rightsizing, the Evolve retrofit program, steady capacity growth, All-New Rapid Rewards, AirTran merger synergies and several ancillary revenues, we are mainly concerned about high maintenance and operating costs associated with fleet rightsizing and modernization. Additionally, the successful integration of AirTran would result in a one-time charge of $500 million, of which $134 million was expended last year.
Moreover, new advertising rules and stiff competition from United Continental Holdings Inc. (NYSE: UAL) and Delta Air Lines Inc. (NYSE: DAL) keep us cautious on the stock. Besides, Southwest is dependent on Boeing Co. (NYSE: BA) as its sole supplier for aircraft. If Southwest is unable to acquire additional aircraft from Boeing or if the latter is unable to provide adequate support, the company's profitability will inevitably be hampered.
The company also launches fare sales from time-to-time, with discounted ticket prices in order to boost sales. These actions, however, hurt overall revenues.
Based on expected weak first quarter projections and feeble macro data points in the entire airline industry, we recently downgraded our long-term recommendation to Underperform on Southwest. For the short term (1–3 months), the stock retains a Zacks #3 (Hold) Rank.
Whirlpool Opens New Plant
Whirlpool Corporation (NYSE: WHR) has opened a million-square-feet facility in East Tennessee that will manufacture premium cooking products. The new facility, replacing a 123-year-old plant at the same location, will add 130 jobs to the company's 1,500 people workforce.
The company has invested $200 million in the project. The facility also includes a 400,000-square-foot distribution center.
Whirlpool posted a profit of $2.62 per share for the fourth quarter of 2011 compared with $171 million or $2.19 per share in the same period last year. However, excluding special items, profits decreased to 32 cents per share from 43 cents per share in the fourth quarter of 2010. It was significantly lower than the Zacks Consensus Estimate of $1.93 per share.
Sales in the quarter fell marginally to $4.9 billion from $5.0 billion as improving price/mix was offset by unfavorable currency and lower industry demand. It was slightly lower than the Zacks Consensus Estimate of $5.0 billion.
Sales in North America rose a meager 1% to $2.6 billion. Operating profit improved to $202 million from $53 million in the previous year. It was favorably affected by the implementation of previously announced price increases and improved product mix that more than offset lower industry volumes, higher material costs and the impact from lower production volumes. Whirlpool expects U.S. industry unit shipments to increase in the range of 0%–3% in 2012.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article