The Zacks Analyst Blog Highlights:Linear Technology, General Motors, Ford Motor, Honda Motor and Toyota Motor

Jan 14, 2014, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Jan. 14, 2014 /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 the Linear Technology Corp. (Nasdaq:LLTC-Free Report), General Motors Company (NYSE: GM-Free Report), Ford Motor Co. (NYSE: F-Free Report), Honda Motor Co., Ltd. (NYSE: HMC-Free Report) and Toyota Motor Corporation (NYSE: TM-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Will Linear Technology (LLTC) Beat Earnings?

Linear Technology Corp. (Nasdaq:LLTC-Free Report) is set to report second-quarter fiscal 2014 results on Jan 14. Last quarter, it posted a 4.4% positive surprise. Let's see how things are shaping up for this announcement.

Growth Factors This Past Quarter

The company's first-quarter earnings exceeded the Zacks Consensus Estimate by a couple of cents due to higher volumes. Revenues of $340.4 million were up 1.6% year over year and at the higher end of management's guidance range, led by improved sales in the automotive and industrial markets.

Also, the first quarter was strong for Linear Technology in terms of margin growth. This was mainly due to favorable mix and lower-than-expected expenses.

However, the company provided cautious second-quarter guidance, with revenues expected to be flat to down 4% sequentially. Also, the budgeting stalemate at the Federal Government level could hurt results, indicating weak revenues in the upcoming quarter.

Earnings Whispers?

Our proven model does not conclusively show that Linear Technology will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP:  Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 44 cents. Hence, the difference is 0.00%.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

GM to Reinstate Dividend Soon

General Motors Company (NYSE: GM-Free Report) is planning to reinstate a quarterly cash dividend soon, according to Daniel Ammann, the chief financial officer (CFO). He believes that investors are expecting a dividend from the company, now that it is free from government shareholding and is generating positive cash flows.

The U.S. Department of Treasury completed the divestment of its remaining stake in General Motors in Dec 2013. The department recovered a total of $39 billion out of its bailout loan of $49.5 billion to the automaker following its bankruptcy in 2009. Thus, the Treasury had to incur a loss of $10.5 billion.

General Motors had stopped paying dividends following the recession in 2008. It has more or less recovered from the effect of the recession and bankruptcy and has completed 15 consecutive quarters of profitable operations. The fourth quarter of 2013, whose results are scheduled to be announced before the opening bell on Feb 6, 2014, is expected to be the 16th profitable quarter.

The cash flows of General Motors have also improved. During the third quarter of 2013, the company had a net cash flow of $3.3 billion from automotive operations, up from $3.1 billion in the year-ago period.

The company now intends to build a strong balance sheet that can not only provide ample returns to shareholders, but also endure the impact of any economic weakness.

General Motors' peer, Ford Motor Co. (NYSE: F-Free Report), recently increased its dividend for the first quarter of 2014 by 25% to 12.5 cents per share. The new dividend will be paid on Mar 3, 2014 to holders of the outstanding Class B and common stock. The record date for the quarterly dividend is Jan 31, 2014. The increase amounts to a dividend yield of 3.2% per annum, based on the closing share price of $15.84 as of Jan 9, 2014.

General Motors, which carries a Zacks Rank #3 (Hold), is one of the largest automobile producers in the world along with Ford, Honda Motor Co., Ltd. (NYSE: HMC-Free Report) and Toyota Motor Corporation (NYSE: TM-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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