Zacks Bull and Bear of the Day Highlights: Apple, Plexus, Toyota Motor, Avon Products and NYSE Euronext

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Feb 09, 2011, 09:30 ET

CHICAGO, Feb. 9, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Apple Inc. (Nasdaq: AAPL) as the Bull of the Day and Plexus Corp. (Nasdaq: PLXS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toyota Motor Corp. (NYSE: TM), Avon Products Inc. (NYSE: AVP) and NYSE Euronext Inc. (NYSE: NYX).

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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:

Bull of the Day:

Apple Inc.'s (Nasdaq: AAPL) posted stellar first quarter 2011 results beating the Zacks Consensus Estimate. The outperformance was driven by strong iPhone, Mac and iPad sales. Over the last four quarters, Apple has surpassed the Zacks Consensus Estimate by 21.3%.

The outlook for Mac, iPad and iPhone remains robust, backed by domestic and international demand, boding well for Apple's revenues and earnings. With a loyal customer base, international expansion, competitive pricing strategy and solid cash in hand, we remain positive on its long-term growth. Moreover, we expect Apple to introduce new products this year to compete against new Android-based phones and tablet PCs.

We are also positive on the addition of Verizon as a carrier that will help it double its customer base. Stronger-than-expected iPhone and iPad sales will help Apple gain increasing smartphone market share. We expect the company to outperform its peers this year and thus we again raise our 2011 revenue and EPS estimates. We upgrade Apple shares to Outperform and raise our price target to $422.00.

Bear of the Day:

Plexus Corp. (Nasdaq: PLXS) posted mixed first quarter 2011 results with earnings surpassing but revenues missing the respective Zacks Consensus Estimates marginally. Plexus reduced its outlook for the next two quarters of 2011 due to significant headwinds resulting from a slow down in production for two significant customers, an increase in operating costs and a significant production delay for the Coca-Cola Company.

Plexus' weak revenue outlook will weigh on the company's 2011 results. Intense competition in the EMS market, small market share, continued component challenges and supply chain constraints pose threats.

We remain apprehensive about the company meeting its 2011 targets and expect revenues to be down with difficult operating performance. We have reduced our estimates for fiscal 2011 and downgrade the stock to Underperform. We lower our target price to $25.00.

Latest Posts on the Zacks Analyst Blog:

Toyota Posts Dips, Ups Guidance

Toyota Motor Corp. (NYSE: TM) posted a 39% fall in profit to yen 93.63 billion ($1.14 billion) or yen 29.86 (36 cents) per share in the third quarter of fiscal 2011 from yen 153.22 billion ($1.86 billion) or yen 48.86 (59 cents) per share in the year-ago quarter. The fall in profit was attributable to lower sales in Japan, North America and Europe as well as a stronger yen.

Consolidated revenues in the quarter dipped 12% to yen 4.67 trillion ($56.74 billion) on the back of a 13% fall in global sales volume to 1.8 million units. Vehicle sales declined 21% to 507,861 units in North America, 31% to 402,476 units in Japan and 5% to 207,621 units in Europe. Meanwhile, sales rose 21% to 334,504 units in Asia and 2% to 349,219 units in Other regions.

Operating profit almost fell yen 90.03 billion to yen 99.07 billion from yen 189.11 billion in the quarter. The decrease in operating profit was attributable to unfavorable changes in exchange rates.

Segment Performance

In the Automotive segment, revenues dipped 12% to yen 4.26 trillion due to lower unit sales. The segment saw an operating loss of yen 27.53 billion in the quarter in contrast with an operating profit of yen 124.48 billion in the prior fiscal year due to the same factors that affected the company's operating income.

In the Financial Services segment, revenues slipped 3% to yen 297.50 billion. Consequently, operating profit declined by yen 35.80 billion to yen 116.44 billion from yen 80.64 billion in the prior fiscal year. In All other businesses, revenues ebbed 7% to yen 224.65 billion. However, operating profit rose by yen 27.79 billion to yen 13.39 billion.

Guidance Raised

Toyota revised its estimates upward for fiscal 2011. The automaker now anticipates vehicle sales in the range of 7.41 million–7.48 million units up from the prior estimate of 7.38 million–7.41 million units.

The company forecasted consolidated revenues to be yen 19.2 trillion, operating income to be yen 550 billion and net income to be yen 490 billion. This compared to the prior guidance of yen 19.0 trillion in consolidated revenues, yen 380 billion in operating income and yen 350 billion in net income.

Toyota's results clearly reflect loss of consumer confidence as a result of its series of automotive safety recalls since September 2009. However, we appreciate the company's efforts to improve its sales volume as well as its cost reduction measures. As a result, the company has a Zacks #3 Rank (Hold) on its stock for the short term (1–3 months).

Avon Products Misses Our Estimates

Avon Products Inc. (NYSE: AVP) recently posted fourth-quarter 2010 adjusted earnings of 59 cents a share, which fell short of the Zacks Consensus Estimate of 67 cents and dipped 13.2% from the year-ago figure of 68 cents a share.

For the fiscal 2010, the company reported adjusted earnings per share of $1.80 compared with $1.75 in the year-ago quarter. Earnings also failed to meet the Zacks Consensus Estimate of $1.89 per share.

On a reported basis, including one-time items, earnings dropped 15% to 53 cents per share from 62 cents per share in the year-ago quarter. For fiscal 2010, earnings fell 4% to $1.39 per share.

Total sales of the company rose 1.0% year over year to $3,175.6 million compared with $3,134 million a year ago, backed by a surge in pricing and synergistic acquisitions. However, revenues earned remained below the Zacks Consensus Estimate of $3,277.0 million.

The company's beauty product sales slipped 1.0%, driven by growth across all categories marred by skin care and color, which declined 12.0% and 2%, respectively.

NYSE Euronext Clears Low Bar

NYSE Euronext Inc.'s (NYSE: NYX) fourth quarter operating earnings per share of 46 cents came in a couple of pennies ahead of the Zacks Consensus Estimate of 44 cents. However, earnings were substantially behind the 58 cents recorded in the year-ago quarter.

Results reflect weak transaction and clearing volumes, particularly in the European derivatives and U.S. cash trading that primarily lowered the top line. Both New York Portfolio Clearing (NYPC) and NYSE Liffe U.S. are currently incurring losses.

However, the company benefited from various cost reduction programs. These aided in increasing efficiency of the new initiatives taken to launch new data centers as part of its long-term strategy. Nevertheless, operating net income decreased 21% year over year to $120 million from $151 million in the year-ago quarter.

NYSE reported GAAP net income of $135 million or 51 cents per share as compared with $172 million or 66 cents per share in the prior-year quarter. These include the impact of pre-tax merger expenses, exit costs and requisite reversal of discrete tax reserves of $18 million versus $43 million reported in the year-ago quarter.

Gross revenues declined by 8.0% year over year to $1.05 billion in the reported quarter. Besides, net revenues (defined as gross revenues less direct transaction costs consisting of Section 31 fees, liquidity payments and routing and clearing fees) were $613 million, down 4% from $640 million in the prior-year quarter and also below the Zacks Consensus Estimate of $617 million.

Revenues from information service and technology solutions (up 11% year over year) were offset by a decline in derivatives (down 6% year over year) and in cash trading and listings (down 7% year over year) due to price reductions, unfavorable currency fluctuations and lower trading volumes. Fixed operating expenses decreased slightly to $425 million from $431 million in the prior-year quarter.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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