Today's Must Read
Mondelez's (MDLZ) Margins Strong on Cost Saving Initiatives
Strong Drilling & Evaluation Margins Boost Halliburton (HAL)
Wednesday, March 14, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Charter Communications (CHTR), Mondelez (MDLZ) and Halliburton (HAL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Charter Communications’ shares have outperformed the Zacks Cable TV industry over the past three months (+8.6% vs. -4.3%). Moreover, the Zacks analyst likes the company’s wireless venture, along with plans to offer its wireless service in 2018. The company’s residential and commercial internet and voice customer growth continues to accelerate, evident from the revenue growth and subscriber gains.
Further, despite cord-cutting, the company reported a net gain of 15,000 video, 300,000 Internet and 53,000 voice customers in fourth-quarter of 2017. However, Charter's operations in a saturated and competitive multi-channel U.S. video market is a worry. The company continues to face stiff competition from online TV streaming service providers. The company's high debt level and consolidation-related woes are other potential hazards.
Shares of Mondelez have lost -1.2% in the last one year, outperforming the -11% decline of the Zacks Food Preparation industry. Mondelez reported fourth-quarter 2017 results, with earnings beating expectations and revenues meeting the same. Adjusted earnings grew 21%, primarily driven by operating gains. Net revenues increased 2.9% year over year, courtesy of the Power Brands and favorable trends in emerging markets. Emerging markets’ net revenues rose 6.3%, while Power Brands witnessed a 3.7% rise.
Regionally, Latin America, Asia, Middle East & Africa and Europe registered an increase of 4.2%, 2.6% and 5% in revenues, respectively. However, North America’s revenues declined 0.6%. Adjusted operating margin expanded 180 basis points year over year on lower overhead costs owing to continued cost reduction.
Halliburton’s shares have outperformed the Zacks Oil & Gas Field Services industry over the past six months (up +9% vs. -2.9%). This price performance is backed by phenomenal earnings surprise history, with HAL having surpassed expectations in all the trailing 14 quarters. The world’s No. 2 oilfield-services provider's consistently strong numbers could be attributed to improved utilization and pricing gains in North America.
Of late, HAL has also been aided by margin expansion at its drilling and evaluation product lines, while the international market continues to improve. However, cost inflation triggered by increased fracking sand pricing is likely to dampen investor confidence. Moreover, with the failure of BHI acquisition, HAL had to book a massive $3.5 billion in breakup charges that stretched its balance sheet. Hence, the Zacks analyst advises investors to wait for a better entry point before buying shares of HAL.
Other noteworthy reports we are featuring today include JetBlue (JBLU), ONEOK (OKE) and Fujifilm (FUJIY).
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>