WebMD Health, Agrium, Potash and Ferro highlighted as Zacks Bull and Bear of the Day
CHICAGO, Oct. 10, 2013 /PRNewswire/ -- Zacks Equity Research highlights WebMD Health Corporation (Nasdaq:WBMD-Free Report) as the Bull of the Day and Agrium Inc. (NYSE:AGU-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Potash Corp. (NYSE:POT-Free Report) and Ferro Corp. (NYSE:FOE-Free Report).
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Here is a synopsis of all five stocks:
WebMD Health Corporation (Nasdaq:WBMD-Free Report) has a famous web site and triple digit earnings growth to go along with it. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by 205% in 2013.
WebMD Health provides health information to consumers, physicians, healthcare professionals, employers and health plans through both public and private online portals and mobile platforms.
Its websites include WebMD Health, Medscape, MedicineNet, eMedicineHealth, RxList, theheart.org, and Medscape Education.
Reaffirmed Full Year Guidance in July
In July, when it reported second quarter results, WebMD reaffirmed its full year 2013 guidance. Full year revenue is expected to jump between 3% and 7% from 2012.
The company is also expected to be profitable in 2013 with net income of $3 million to $11 million versus a loss of $20.3 million in 2012.
Big Earnings Growth Ahead
2012 was tough for WebMD as earnings plunged compared with previous years.
But both 2013 and 2014 are looking up.
Earnings are expected to rebound 205% in 2013 to $0.22 and another 88% to $0.41 in 2014.
After flying high on strong fertilizer prices over the last few years, Agrium Inc. (NYSE:AGU-Free Report) recently warned on the third quarter as fertilizer prices went soft. This Zacks Rank #5 (Strong Sell) is trading near its 52-week lows.
Agrium produces all three major fertilizers, including nitrogen, phosphates and potash. It is also a retail supplier of agricultural products such as crop protection and seeds in North America, South America and Australia.
On Sep 23, Agrium provided a third quarter outlook which was pretty grim. Soft fertilizer prices, combined with lower sales volumes, are expected to negatively impact the Wholesale segment's third quarter results.
Agrium said customer demand had been delayed across all the fertilizers in the quarter. Wholesale nitrogen sales plunged 20% and phosphates sales sank 30% from the year ago quarter. Potash was no better, coming in about 30% lower than a typical third quarter.
To add on even more bad news, fertilizer prices were also about 20%-30% lower than the same period in 2012.
To placate shareholders, Agrium raised its dividend by $1.00 a share. It is now yielding a healthy 3.4%.
This dividend increase was larger than the analysts had anticipated.
Additional content:
Agrium Down to Strong Sell
On Oct 8, Zacks Investment Research downgraded fertilizer company Agrium Inc. (NYSE:AGU-Free Report) to a Zacks Rank #5 (Strong Sell).
Agrium, which is a prominent Canadian fertilizer company along with Potash Corp. (NYSE:POT-Free Report), suffered a double-digit drop in its second-quarter 2013 profit (reported on Aug 7), hurt by cold weather in North America and pricing pressure. However, both revenues and adjusted earnings beat the Zacks Consensus Estimate. The company witnessed higher retail sales in the quarter, but weak global demand and pricing continued to hurt its phosphate business.
The company delivered negative earnings surprises in two of the last four quarters with an average negative surprise of 10.27% for the trailing quarters.
Sales from the company's wholesale segment also fell 9% to $1.5 billion. The segment's EBITDA of $517 million represented a decline of $160 million from the year-ago quarter. The results were affected by lower realized sales prices for urea, potash and phosphate as a result of global market pressures accompanied by an unplanned outage at the company's Redwater nitrogen facility.
While Agrium may benefit from high crop prices and overall strong fundamentals for the crop input market, demand for potash and phosphate is expected to be weak in India, a key market. Changes in pricing and subsidy policies by the Indian government are expected to continue to affect demand in the country.
Moreover, the pricing environment for phosphate is expected to remain soft in the near future. The global phosphate market is expected to remain weak, partly due to lower demand from India (a major phosphate import market). Phosphate import is expected to decline in India in 2013 and the next year due to the change in subsidy and currency devaluation.
The Zacks Consensus Estimate for 2013 for Agrium has gone down roughly 9.2% to $8.51 per share since the second-quarter earnings release. The Zacks Consensus Estimate for 2014 has also declined 12.7% to $8.46 per share.
One company in the basic materials sector with a favorable Zacks rank is Ferro Corp. (NYSE:FOE-Free Report), with a Zacks Rank #1 (Strong Buy).
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