Zacks Bull and Bear of the Day Highlights: Alexion Pharma, Hospira, Boeing, General Dynamics and Lockheed Martin
CHICAGO, Oct. 27, 2011 /PRNewswire/ -- Zacks Equity Research highlights Alexion Pharmaceuticals' (Nasdaq: ALXN) as the Bull of the Day and Hospira Inc.'s (NYSE: HSP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis The Boeing Company (NYSE: BA), General Dynamics Corporation (NYSE: GD) and Lockheed Martin Corporation (NYSE: LMT).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Alexion Pharmaceuticals' (Nasdaq: ALXN) third quarter 2011 adjusted earnings of $0.32 per share breezed past the Zacks Consensus Estimate by $0.09 and the year-ago adjusted earnings by $0.11. Results were driven by increased revenues thanks to a strong performance by Soliris, Alexion's sole marketed product. Following strong third quarter results, Alexion upped its guidance for 2011.
Our estimate is within the revised guidance range provided by the company. We are also impressed by the successful label expansion of Soliris into the aHUS indication in the US and the positive recommendation in the EU. The string of good news has boosted the stock.
We expect the stock to continue performing well and believe that the current price represents an attractive entry point for long-term investors. Our target price is $82.00.
Hospira Inc.'s (NYSE: HSP) third quarter preliminary results were below expectations due to continued manufacturing problems at the company's Rocky Mountain facility. The facility is expected to continue functioning below full capacity through the remainder of 2011. The additional costs for manufacturing remediation resulted in lost sales, inventory loss and lower service levels.
In addition, management cut its 2011 adjusted earnings guidance to $2.95-$3.05 from $3.90-$4.00. We have slashed our 2011 earnings estimate from $3.93 to $3.01 and our 2012 estimates from $4.47 to $2.85, in line with management's action.
Moreover, the Symbiq and Plum pump issues remain matters of concern. We have, therefore, downgraded our rating on Hospira from Neutral to Underperform.
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Boeing Beats EPS, Raises Guidance
The Boeing Company (NYSE: BA), riding on strong operational performance reported strong numbers for the third quarter of 2011. In the reported quarter, the company posted quarterly earnings of $1.46 per share, beating the Zacks Consensus Estimate of $1.11 a share as well as the year-ago earnings of $1.12.
Operating Statistics
On the revenue front, quarterly revenues increased 4% year over year to $17.73 billion, primarily attributable to higher commercial airplane deliveries. Reported revenues, however, failed to beat the Zacks Consensus Estimate of $17.82 billion. Operating margin increased 150 basis points (bps) year over year to 9.7%. Overall net income rose 31% to $1.10 billion from $837 million in the year-ago quarter.
Outlook
Boeing has a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries; and is one of the largest aerospace and defense contractors in the world. Moreover, the company's revenue streams span more than 90 countries around the globe.
Boeing narrowed its fiscal 2011 revenue guidance in the range of $68 billion-$70 billion versus earlier range of $68 billion-$71 billion. However, the company raised its earnings per share guidance range for fiscal 2011 to $4.30-$4.40 from the earlier guidance range of $3.90-$4.10 buoyed by strong core performance across its businesses.
The guidance incorporates the delivery initiation of revenue boosters like the 787 Dreamliner and 747-8 series, which started in the reported quarter. However, the company revised the upper range of the Commercial Airplanes' deliveries guidance for fiscal 2011. Deliveries for fiscal 2011 are now expected to be approximately 480, down from earlier range of 485 – 495.
The reduction was due to lower planned deliveries on development programs (especially 787 and 747-8 units). Operating margin is now expected to be in the range of 9.0% – 9.5%, from earlier range of 8.0% – 8.5%, reflecting strong core performance and the lower planned development program deliveries.
In the defense space, the company also secured big contracts like the U.K. Ministry of Defence contract for CH-47 Chinook helicopters, Indian contract for C-17 airlifters. In the reported quarter the KC-46A Tanker program also successfully completed the Integrated Baseline Review with the U.S. Air Force. However, the threat of defense cutbacks will remain headwinds for the company going forward.
Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. This is in sync with other aerospace and defense behemoths like General Dynamics Corporation (NYSE: GD) and Lockheed Martin Corporation (NYSE: LMT).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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