Zacks Analyst Blog Highlights: McDonald, Abercrombie & Fitch, Las Vegas Sands, Air Products & Chemicals and Airgas

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Feb 07, 2011, 09:34 ET

CHICAGO, Feb. 7, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: McDonald (NYSE: MCD), Abercrombie & Fitch (NYSE: ANF), Las Vegas Sands Corp. (NYSE: LVS), Air Products & Chemicals Inc. (NYSE: APD) and Airgas Inc. (NYSE: ARG).

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Here are highlights from Friday's Analyst Blog:

Employment Report In Depth

In the overall big picture, men have fared far worse than women in this downturn. There are two possible reasons for that. The first is that the industries that have been particularly hard-hit in this downturn tend to be far more male-dominated than the industries that have skated though this recession more or less unscathed. The most glaring example of this would be the construction industry versus the health care industry (more on the industry breakdowns below).

The second explanation is that on average, women tend to still be paid far less than men do, and employers might be more prone to let their relatively high priced male employees go first before their cheaper female employees. The industry effect is probably the bigger one, but the two are not mutually exclusive and both might be playing a role.

Teenage Demographic

Teens, regardless of gender have had a very hard time of it in this recession. Just go to a McDonald's (NYSE: MCD) and you will see this for yourself. Normally the blemishes you see on the cashier's face is acne, not wrinkles and age spots as is the case now. In January, the teen unemployment rate rose to 25.7% from 24.4% in December but it is down from 26.2% a year ago.

The deterioration from last month is not as bad it appears, but the improvement from last year is a bit of an illusion. The participation rate, rose to 34.6% from 34.3% in December, but was 35.3% a year ago. The percentage of teens that actually have a job was just 25.7%, up from 25.6% in November but down from 20% a year ago.

While for the most part the earnings from teen jobs tend to go towards clothes from Abercrombie & Fitch (NYSE: ANF) and other teen clothing stores, for many it is a significant part of paying for college. Also, when teens work, they learn important job skills such as the importance of actually showing up, and doing so on time. The extremely low levels of teens working is not a good sign for the future.

Las Vegas Sands EPS Beats, Stock Tumbles

Las Vegas Sands Corp. (NYSE: LVS) recorded adjusted earnings of 42 cents per share in the fourth quarter of 2010, beating the Zacks Consensus Estimate of 38 cents and 3 cents in the year-earlier quarter.

On a GAAP basis, the company reported net income of $273.0 million or 34 cents, compared with a loss of $113.9 million or 17 cents in the year-ago quarter, primarily reflecting an rise in operating income and decline in net interest expense.

Quarterly revenues climbed 56.9% year over year to $2.02 billion, but was below the Zacks Consensus Estimate of $2.05 billion. Consolidated adjusted property EBITDA (Earnings before interest, taxes, depreciation and amortization) shot up 141.3% to $738.9 million from the year-ago quarter.

The company's results reflect strong performance at its Macau business, outstanding results at its new resort in Singapore and improvement at its Las Vegas business.

The company's full-year adjusted earnings per share were 98 cents per share versus 7 cents per share in full fiscal 2009. Revenues were $6.85 billion in full fiscal 2010, representing a year-over-year growth of 50.2%.

Airgas Buyout Offer Extended

Air Products & Chemicals Inc. (NYSE: APD) continues to court Airgas Inc. (NYSE: ARG) and has extended the expiration date of its tender offer of $70 per share for all of Airgas' outstanding common shares. Air Products in the hope to garner more shareholder support for the takeover extended the expiration date from February 4, 2011 to February 15, 2011.

Air Products stated that out of Airgas' 84.06 million shares outstanding, 7.1 million shares had been validly tendered and not withdrawn from the offer as of February 2, 2011.

In December last year, Airgas' board of directors had again rejected Air Products' final offer of $70 per share. The current offer values the deal at $5.9 billion excluding debt. The board had stated that the offer price was inadequate and below Airgas' current value, which it estimated at no less than $78. Air Products had retaliated by standing firm on $70 per share as its "best and final offer", which was at a 61% premium to Airgas' closing price of $43.53 as of February 4, 2010, the day before it first announced an offer to acquire Airgas.

The Airgas-Air Product imbroglio began in October 2009 when Air Products made an all-stock proposal offer at an implied value of $60 per share. Since then Airgas' board has continuously rejected all subsequent Air Products offers on the premise that they highly undervalue the company and its future prospects, including its industry leading position in the packaged gas business, unrivaled platform and benefits expected from the substantial, recent investments.

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