CHICAGO, April 15, 2014 /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 includethe Yahoo! Inc. (Nasdaq:YHOO-Free Report), E-Commerce China Dangdang Inc. (NYSE:DANG-Free Report), ON Semiconductor Corp. (Nasdaq:ONNN-Free Report), Yelp, Inc. (NYSE:YELP-Free Report) andKohl's Corp (NYSE:KSS-Free Report).
Yahoo! Inc. (Nasdaq:YHOO-Free Report) is set to report first-quarter 2014 results on Apr 15. Last quarter, it posted a 30.0% positive surprise. Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Yahoo's fourth-quarter earnings exceeded the Zacks Consensus Estimate by 10 cents driven by its equity holdings in Yahoo Japan assets and a lower tax rate. Also, GAAP revenues of $1.27 billion were up sequentially as well as year over year.
Margins expanded both sequentially as well as from the year-ago quarter due to solid expense management and a favorable mix.
For the first quarter, Yahoo expects revenues within $1.12–$1.16 billion, adjusted EBITDA in the $290–$330 million range and non-GAAP operating income in the range of $130–$170 million.
Our proven model does not conclusively show that Yahoo 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 29 cents. Hence, the difference is 0.00%.
Zacks Rank: Yahoo has a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.
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.
Other Stocks to Consider
You could consider other stocks with a positive Earnings ESP and a Zacks Rank #1, 2 or 3 such as:
E-Commerce China Dangdang Inc. (NYSE:DANG-Free Report), with Earnings ESP of +33.33% and a Zacks Rank #1 (Strong Buy).
ON Semiconductor Corp. (Nasdaq:ONNN-Free Report), with Earnings ESP of +6.67% and a Zacks Rank #1.
Yelp, Inc. (NYSE:YELP-Free Report), with Earnings ESP of +33.33% and a Zacks Rank #2 (Buy).
Kohl's Shows Fundamental Stability
On Apr 10, 2014, we issued an updated research report on Kohl's Corp (NYSE:KSS-Free Report). The specialty retailer reported fourth-quarter 2013 results on Feb 27. While Kohl's delivered positive surprises in three out of the four quarters of 2013, it faces headwinds from a volatile retail sales environment in the U.S.
Kohl's fourth quarter 2013 earnings of $1.56 per share declined 6.0% from the prior-year quarter due to lower sales and higher operating expenses. An extra operating week in the year-ago period made comparisons difficult this quarter. Net sales dipped 3.8% and missed the Zacks Consensus Estimate due to a challenging retail environment and a decline in comparable sales. While gross margin expanded due to lower costs of merchandise, operating margin declined due to higher operating expenses particularly higher e-commerce costs.
Despite soft fourth quarter results, we have faith in the company's strong fundamentals. Kohl's has a solid brand portfolio. It has expanded in the apparels, fashion jewelry/beauty brand and cosmetic categories. Kohl's has been working on improving its merchandising and execution strategies and aims to increase assortments and expand the number of private and exclusive brands.
Kohl's continuously focuses on introducing new brands in order to keep the inventory assortment fresh and drive customer traffic to its stores and website. In 2013, Kohl's launched an assortment of over 20 new national beauty and fragrance brands in over 250 stores and online. Kohl's plans to launch the Jumping Beans brand featuring Disney characters in fiscal 2014. The company is also planning to offer the IZOD branded menswear and Juicy Couture brand in fall 2014.
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