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Here are highlights from Monday's Analyst Blog:
Earnings Preview:
The current Zacks Consensus Estimate for earnings per share (EPS) is
With respect to earnings surprises over the trailing four quarters, JEC outperformed the Zacks Consensus Estimate in one quarter; was in line in another and lagged behind in two other quarters. Average earnings surprise was a negative 1.75%. The average earnings surprise implies that the company underperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters.
Third Quarter Highlights
On
Total revenue jumped 9.4% year over year to
Agreement of Estimate Revisions
In the last 30 days, none of the analysts providing estimate increased or decreased the company's earnings per share (EPS) for the fourth quarter, as there was no catalyst for such change. However, for fiscal 2011, one analyst increased the estimate in the last 30 days while one decreased the same for fiscal 2012.
Magnitude of Estimate Revisions
Estimates over the last 30 days remained intact at
Estimate for fiscal 2011 also remained intact at
Our Take
Jacobs is likely to post impressive results in the fourth quarter and fiscal 2011 based on improvements in the economic conditions and end markets as well as the company's diversification across geographies and services. We believe that the company's contract wins as well as controlled SG&A expenses and backlogs over time will help to improve financials, going forward.
We currently maintain a long-term Neutral recommendation on the stock. Jacobs has a Zacks #3 Rank, which translates into a short-term Hold rating (1-3 months).
Lowe's Beats Estimates
Let's Unveil the Picture
The quarterly earnings of
Net sales for the quarter crept up 2.3% to
Comparable-store sales during the quarter inched up 0.7%. Management had earlier predicted comparable-store sales to remain flat in the quarter.
Lowe's indicated that gross profit edged down 0.6% to
Stores Update
During the quarter, Lowe's opened 8 stores. The company expects to open 25 new stores during fiscal 2011. At the end of the quarter, the company operated 1,744 stores in
Other Financial Aspects
Lowe's ended the quarter with cash and cash equivalents of
Strolling Through Guidance
Lowe's said that it now expects fourth-quarter 2011 earnings in the range of
The current Zacks Consensus Estimates are
Management now expects sales to increase approximately 8% in the fourth quarter and between 2% and 3% in fiscal 2011. Earlier, Lowe's had forecasted fiscal 2011 sales to increase by approximately 2%.
Lowe's, which faces stiff competition from
Let's Conclude
With the global economic environment still struggling, we believe that spending on big remodeling projects will likely remain under pressure until the housing market stabilizes, inventory levels normalize and consumer-spending rebounds.
Lowe's recently undertook initiatives such as reformation of its store and merchandising operations to enliven competence, augment operational efficiencies and enrich the shopping experience for customers. All these benefited the company to some or the other extent.
The company also replaced its old tag line "Let's Build Something Together" with a new one "Never Stop Improving", thereby reflecting the company's new brand strategy. We believe that the new tag line would help the company to build a sense a confidence among its consumers.
The new tag line mirrors the company's endeavor of improving and developing innovative ideas to cater to the constant changing demands and preferences of consumers. Lowe's also initiated an online tool, "MyLowes", to aid consumers better manage their homes and other home remodeling projects.
We believe that "Never Stop Improving" campaign and "MyLowes" may help Lowe's in gaining a competitive advantage.
Currently, we have a long-term 'Neutral' rating on the stock. Moreover, Lowe's holds a Zacks #3 Rank that translates into a short-term 'Hold' rating, and correlates with our long-term view.
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