Back to top

Press Releases

The Zacks Analyst Blog Highlights: Cisco Systems, Nike, Iconix Brand Group, PVH and Brown Shoe Co.

CSCO NKE ICON PVH BWS

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

For Immediate Release

Chicago, IL – December 18, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Cisco Systems Inc. ((CSCO - Analyst Report)), Nike Inc. ((NKE - Analyst Report)), Iconix Brand Group Inc. ((ICON - Analyst Report)), PVH Corporation ((PVH - Snapshot Report)) and Brown Shoe Company Inc. ((BWS - Snapshot Report)).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Cisco to Sell Linksys

Reportedly, Cisco Systems Inc. ((CSCO - Analyst Report)) will be selling its Linksys wireless router unit. According to media reports, the company has hired Barclays (BCS) to help it sell the home wireless-router company.

This is yet another step by Cisco to exit its consumer-focused business, while strengthening its presence in corporate software and technology services.

In 2003, Cisco acquired Linksys for approximately $500 million in order to make an entry into the consumer networking market. However, strong competition has negatively affected the margins in this business, with a corresponding negative impact on the company’s profits. Now, nearly 10 years later, it looks like Cisco is trying to get out of this market.

The current deal clearly reflects Cisco’s strategy of downsizing its consumer business in order to save cost and expand in certain strategic areas, including cloud computing, which is viewed by many technology firms as a key area for future growth.

Over the past year, the company has closed several of its consumer businesses, such as the Flip video-camera unit, and reduced about 14% of its global workforce, or around 11,500 employees.

As a part of its cloud and networking expansion strategy, Cisco has made three acquisitions in November. The company has acquired Cariden, Meraki and Cloupia for $141 million, $1.2 billion and $125 million, respectively, in line with its growth strategy.


Earnings Preview: Nike

Nike Inc. ((NKE - Analyst Report)), a global leader in sports equipment and apparel, is expected to report its financial results for the second quarter of fiscal 2013 after the market closes on Thursday, December 20, 2012. The Zacks Consensus Estimate for the quarter is $1.00 per share, flat compared to earnings in the prior-year quarter.

Currently, the Zacks Consensus Estimate ranges between 97 cents – $1.04 a share. For the quarter under review, revenue is expected to be $6,019 million, according to the Zacks Consensus Estimate.

With respect to earnings surprises, Nike has topped the estimate in three of the trailing four quarters in the range of negative 14.6% to positive 13.4%. The average surprise over the last four quarters remained positive at 1.3%.

First Quarter Fiscal 2013 - A Synopsis

Nike Inc. reported first-quarter 2013 earnings of $1.27 per share, which ran past the Zacks Consensus Estimate of $1.12. However, the quarterly earnings dipped 9% year over year resulting from poor gross margin, higher SG&A and increased tax rate.

Nike's total revenue augmented 10% to $6,669 million driven by superior demand for Nike brand. Adjusting for currency effect, the company’s revenue grew 15%. Revenue for the quarter also surpassed the Zacks Consensus Estimate of $6,438 million.

On currency neutral basis, revenue for Nike brands elevated 16%, while other businesses delivered 9% growth. Revenue from Cole Haan and Umbro, which are to be divested, was up 6%. During the quarter, the company witnessed strength across all key categories and geographies, except Japan.

Earnings Estimate Revisions

Agreement

We do not see any major estimate revisions at this point for the second quarter of fiscal 2013. Of the 15 estimates, only one second quarter estimate was revised upward, while none moved in the opposite direction in the last 30 days. In the last 7 days, no movement in estimates was noticed in either direction for the quarter.

Magnitude

The magnitude of estimate revisions for Nike depicts a slightly optimistic view for the upcoming quarter. Over the last 7 days, estimates for the upcoming quarter remained unchanged, while it rose by a penny to $1.00 per share in the last 30 days.

Conclusion

Recently, Nike successfully completed its previously announced sale of Umbro to Iconix Brand Group Inc. ((ICON - Analyst Report)) for $225 million. Further, the company is in the process to dispose its Cole Haan affiliate brand to Apax Partners. The company expects to close this deal by early 2013.

We believe the divestiture of these brands will help boost the company’s bottom lines. Meanwhile, in an attempt to expand its global reach and market share, Nike is capitalizing on growth opportunities in emerging markets, especially China.

Additionally, Nike remains focused on other tools, such as a direct-to-consumer business model, to expand geographically. We believe that Nike’s continued investment in China and focus on the direct-to-consumer business will not only help in expanding market share, but will also help strengthen its competitive position.

However, we prefer to remain on the sidelines given sluggish discretionary spending, increase in operating costs, and the ongoing European crisis. Nike faces intense competition in both domestic and international markets from local as well as established players, such as Adidas AG (including Reebok), PVH Corporation ((PVH - Snapshot Report)) and Brown Shoe Company Inc. ((BWS - Snapshot Report)).

We retain a long-term Neutral recommendation on Nike. The company currently has a Zacks #2 Rank, which translates into a short-term Buy rating.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%