Zacks Analyst Blog Highlights: Moody’s Corp., Dun & Bradstreet, Energizer Holdings, Broadcom Corporation and Jones Lang LaSalle Incorporated

CHICAGO, April 28, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Moody's Corp. (NYSE: MCO), Dun & Bradstreet Corp (NYSE: DNB), Energizer Holdings Inc. (NYSE: ENR), Broadcom Corporation (Nasdaq: BRCM) and Jones Lang LaSalle Incorporated (NYSE: JLL).

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Here are highlights from Wednesday's Analyst Blog:

Moody's Reports Excellent Q1

Moody's Corp. (NYSE: MCO) reported strong first quarter 2011 earnings, beating the Zacks Consensus Estimate of 53 cents by 14 cents (26.4). The positive surprise was primarily driven by strong top-line growth across all segments.

Based on the strong results, Moody's revised its full-year guidance, expecting higher revenues from most of its operational segments.

2011 Guidance

Based on better-than-expected first quarter results, Moody's revised its fiscal 2011 guidance. For fiscal 2011, Moody's expects revenue to increase in the low-double-digit percent range (previous guidance high-single-digit percent range). However, expenses are expected to increase in the mid- to high-single-digit percent range.

Management expects fiscal 2011 operating margin to be in the range of 38% to 40% and the effective tax rate to be approximately 36.0%.

Management intends to continue with its share repurchase program in 2011, subject to available cash flow and other capital allocation decisions.

The company expects diluted earnings per share for fiscal 2011 in the range of $2.22 to $2.32 (previous guidance was $2.12 to $2.22). Currently, the Zacks Consensus Estimate is pegged at $2.18 for the fiscal year.

Segment wise, for the global MIS business, revenue is expected to increase in the low-double-digit percent range (previous guidance mid- to high-single-digit percent range) for fiscal 2011. Domestic MIS revenue is expected to increase in the mid-single-digit percent range, while overseas revenue is expected to increase in the mid- to high-teens percent range (previous guidance low-double-digit percent range).

Corporate finance revenue is anticipated to increase in the high-teens percent range. Structured finance revenue is expected to grow mid-single-digit percent range.

Revenue from financial institutions is expected to grow in the high-single-digit percent range, while public, project and infrastructure finance revenue is estimated to increase in the mid-single-digit percent range.

MA revenue is likely to increase in the high-single- to low-double-digit percent range for fiscal 2011. MA revenue is expected to increase in the high-single-digit percent range in the U.S. and in the low-double-digit percent range outside the U.S.

Revenue growth is expected in the mid-single-digit percent range for Research, Data and Analytics and in the low- to mid-single-digit percent range for Risk Management software. Professional services revenue is expected to double, driven by revenue generated from the newly acquired CSI Global Education.

Recommendation

We maintain our Outperform rating over the long term. Moody's achieved strong growth across most segments in the first quarter. We expect Moody's to benefit from the gradual recovery in the U.S. economy, with the Investor Service and Analytics business delivering strong top-line results over the long term.

Despite tough competition from Dun & Bradstreet Corp (NYSE: DNB) and privately held Fitch Ratings Inc., we believe Moody's remains a solid franchise in rating debt instruments based on its diversified credit research business model and international growth.

Moreover, lower operating expense and higher share repurchases will improve profitability going forward.

Currently, Moody's has a Zacks #2 Rank, which implies a Buy rating in the short term (1-3 months).

Energizer Beats on Strong Top Line

Energizer Holdings Inc. (NYSE: ENR) reported second quarter 2011 non-GAAP earnings (excluding charges) of $1.04 per share, comprehensively beating the Zacks Consensus estimate of 91 cents per share. The upside surprise was driven by better-than-expected top-line growth.

Operating Performance

Earnings per share (EPS) on a non-GAAP basis decreased 15.4% year over year from $1.23 reported in the prior-year quarter.

Including charges and one-time items of 49 cents, EPS came in at 55 cents in the quarter, down 56.0% year over year from $1.25.

Gross margin was 45.5% compared with 47.8% in the year-ago quarter. The decline was primarily credited to the negative impact of approximately 180 basis points (bps) on margins arising from the increased coupon and trade promotional activity for the Schick Hydro product launch.

In addition, the inclusion of value priced American Safety Razor (ASR) products for the full quarter reduced comparative gross margin by approximately 150 bps.

Spending on advertising and promotion (A&P) escalated 30.6% year over year (9.7% of total second quarter 2011 revenue versus 8.2% in the year-ago period) due to increased spending on support for the Schick Hydro launch.

Broadcom Beats, but Guidance Weak

Broadcom Corporation (Nasdaq: BRCM) generated revenues of $1.82 billion in the first quarter of 2011, up 24.2% year over year but down 6.6% sequentially. The results were within management's guidance of $1.75 billion - $1.85 billion and surpassed the Zacks Consensus Estimate of $1.81 billion.

In terms of end-markets, the Broadband Communications segment recorded a 15% sequential decline as expected by management due to excess channel inventory.

Growth in this segment will be driven by the continued expansion of pay-TV and Internet access services internationally, especially in China and India. Surging demand for online video content also continues to drive growth in next generation, high-speed modems utilizing DOCSIS 3.0, VDSL and PON access technology.

In addition, demand for greater bandwidth throughout in the domestic sphere will drive adoption of Gigabit Ethernet 802.11n, MoCA and power line high-speed home networking technology.

Guidance: For the second quarter of 2011, Broadcom projects revenues around $1.75 billion - $1.85 billion, flat with the previous quarter. Revenue from Broadband Communications segment is expected to be up as inventory correction is almost over.

Revenue from Mobile & Wireless segment is expected to be down in the second quarter due to market softness at some of the key customers. Revenues from Infrastructure & Networking sales are expected to be flat to slightly down.

Jones Lang LaSalle Misses

Jones Lang LaSalle Incorporated (NYSE: JLL), a leading real estate investment trust (REIT), has reported first quarter 2011 net income of $1.5 million or 3 cents per share compared to $0.2 million or 1 cent in the year-earlier quarter. Earnings for the reported quarter were well below the Zacks Consensus Estimate of 31 cents.

Revenues for the reported quarter came in at $687.9 million compared to $580.7 million recorded in the year-ago quarter. Total revenues during the quarter exceeded the Zacks Consensus Estimate of $651 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $28.3 million for first quarter 2011 compared with $29.4 million for the same period in 2010.

By segment, revenues from 'Real Estate Services' were $621.2 million during the quarter, compared to $515.3 million in first quarter 2010 – a year-over-year increase of about 21%. By geographic region, revenues from the Americas came in at $288.1 million reflecting a year-over-year increase of 26%, while that in EMEA (Europe, Middle East, and Africa) increased 11% to $168.1 million.

In the Asia-Pacific region, revenue growth during the quarter was 22% to $165.5 million. The solid year-over-year increase in revenue across all the segments was largely due to strong income from 'Project & Development Services', 'Capital Markets & Hotels' and 'Leasing', which improved 37%, 26% and 23% respectively during the quarter.

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