CHICAGO, Aug. 13, 2012 /PRNewswire/ -- Zacks Equity Research highlights The New York Times Company (NYSE:NYT) as the Bull of the Day and Ford Motor Company (NYSE:F) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Groupon Inc. (Nasdaq:GRPN), Amazon.com Inc. (Nasdaq:AMZN) and Google Inc. (Nasdaq:GOOG).
The New York Times Company's (NYSE:NYT) second-quarter 2012 earnings of $0.14 per share beat the Zacks Consensus Estimate by a penny, and rose 27.3% from the prior-year quarter. The quarter reflects favorable response to the digital subscription packages, rise in circulation revenue and cost containment efforts.
The top-line portrayed marginal growth of 0.6% to $515.2 million during the second quarter, and also came ahead of the Zacks Consensus Estimate of $509 million. The ongoing slump in the advertising market continues to weigh upon the company's results. To mitigate this, the company is diversifying its business and adding new revenue streams.
The company is also streamlining its cost structure, strengthening its balance sheet and restructuring its portfolio. The company is offloading assets that bear no direct relation with the core operations in order to re-focus on its core newspapers and pay more attention to its online activities.
Ford Motor Company (NYSE:F) saw a depressing 2012 second quarter, with a sharp 39% fall in profits to $0.30 per share and 6% drop in revenues to $33.3 billion due to lower operating results in all regions except North America. Further, it expects market share in the U.S. and Europe to be lower than 16.5% and 8.3%, respectively, in 2011 and overall pre-tax operating profit to be lower than 2011 compared with the prior guidance of tallying.
We are also concerned about the company's higher structural costs and economic weakness around the world. Therefore, we continue with our Underperform recommendation on the stock and set a target price of $8.25.
The current P/E, which is close to the lower end of the historical range, is at a 31% discount to the peer group for 2012. Our $8.25 target price, 6.2x 2012 EPS, reflects our Underperform recommendation.
Groupon Inc. (Nasdaq:GRPN) is scheduled to release its fiscal second quarter 2012 results after the closing bell on August 13, 2012. In the run up to the earnings release we do not notice any significant estimates revision by the analysts covering the stock.
Previous Quarter Highlights
Groupon reported better-than-expected first quarter results. Quarterly revenue of $559.3 million soared 89.0% year over year, driven by higher gross billing and steady increase in the number of active customers.
Groupon's quarterly loss per share (including stock based compensation) of 2 cents was narrower than the Zacks Consensus Estimate of a loss of 4 cents. Strong revenue growth and lower marketing expense drove the quarterly result.
In the last 30 days, out of the 12 analysts covering the stock, only one downward revision was noticed. The Zacks Consensus Estimate for the second quarter was pinned at a loss of 2 cents per share over the same period.
Analysts expect expansion of the paid-user base to positively impact the company's top line. Moreover, higher gross billing on a year–over-year basis is expected to drive revenues.
However, currency fluctuations (owing to weak euro) remain a headwind.
We believe that Groupon is well positioned to gain from increasing e-commerce spending on mobile devices, profitable domestic market and an under penetrated international market. We expect these opportunities to continue to drive top-line growth going forward. Moreover, Groupon enjoys a first-mover advantage in the daily deals market based on its well-recognized discount coupons.
However, we believe that the market is getting more competitive due to the growing interest from technology stalwarts such as Amazon.com Inc. (Nasdaq:AMZN) and Google Inc. (Nasdaq:GOOG).
Moreover, we believe that Groupon need to earn profits on a consistent basis for the next couple of quarters to gain confidence of its jittery investors. Until that happens, we prefer to remain Neutral on the stock over the long term.
Currently, Groupon has Zacks #3 Rank, which implies a Hold rating in the short term.
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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