For Immediate Release
Chicago, IL – December 6, 2017 – Zacks Equity Research highlights Gol Linhas Aereas Inteligentes (GOL - Free Report) as the Bull of the Day and Tennant Company (TNC - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onGlu Mobile Inc. (GLUU - Free Report) , Calumet Specialty Products Partners, L.P. (CLMT - Free Report) and SunPower Corporation (SPWR - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Gol Linhas Aereas Inteligentesis Brazil's largest airline, carrying 33 million passengers annually on more than 700 daily flights to 63 destinations, 52 in Brazil and 11 in South America and the Caribbean, on a fleet of 120 Boeing 737 aircraft, with a further 120 Boeing 737 MAX on order.
The company recently reported earnings where they crushed the Zacks consensus earnings estimate (actual $0.60 vs. expected $0.19), and easily beat the consensus revenue estimate (actual $859 million vs. expected $783 million). The company saw year over year gains in the following major areas; net revenues +13.2%, recurring operating income +49.3%, auxiliary and cargo revenues +7.0%, net income +12.1%, and adjusted total net debt -66.7%.
In discussing the recent earnings report, Paulo Kakinoff, CEO, commented, “Brazilian macroeconomic remains a challenging environment, once again we renew our commitment to continuous improving customer experience, strong discipline in seats supply, growth in load factor, and cost control to generate better operating results. As a result, we achieved good operating results, with recurring EBITDA margin increasing by 3.7 p.p. in relation to 3Q16.”
Factors of the Earnings Guidance Increase
Due to improved demand both domestically and internationally, an expanding Brazilian economy, an upturn in the number of total seats, and international development, management increased FY 17 EPS guidance from a range of $0.57-0.78 to $1.25-1.40.
In the month of October the company saw total volume of departures increase by +0.5% with the total number of available seats rising by +0.3%. Further, GOL’s load factor was 80.6% during the month, which was an improvement of +4.4% when compared to the year ago quarter. On the domestic side, the company posted an uptick in total departures, +0.5%, and total number of seats +0.4%. Most importantly, GOL saw demand rise by +9.1%, and its load factor up +5.5%. As for the international segment, demand was up +0.3%, and total seat supply increased by +3.9%.
Price and Earnings Consensus Graph
As you can see in the graph below, 2015 and the first half of 2016 was a difficult time period for the company, but the impressive Q3 earnings and increased guidance caused the stock price and future earnings estimates to rise.
Bear of the Day:
Tennant Company, who currently holds a Zacks Rank #5 (Strong Sell) is a world leader in designing, manufacturing and marketing solutions that empower customers to achieve quality cleaning performance, significantly reduce their environmental impact and help create a cleaner, safer, healthier world. Its products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; detergent-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading surfaces. Tennant's global field service network is the most extensive in the industry.
Recent Earnings Data
The company posted net sales of $262, million which was a record for a third quarter, and net income of $3.6 million. But gross margins fell to 39.9% from 42.6% in the year ago quarter. This decline was due to “continued pressure form field service productivity, manufacturing inefficiencies, and raw material inflation. Further, selling and administrative (S&A) expensed increased to $85.7 million, 32.7% of sales, from $60.6 million, 30.3% of sales from the year ago quarter. This increase in spending offset the companies cost reduction initiatives.
During the earnings report, management decreased guidance for both FY 17 reported GAAP earnings, and adjusted earnings per share. Tennant now expects 2017 fully year reported GAAP earnings in the range of $0.05 to $0.25, down from the previously expected range of $0.85 to $1.05 per share. Further, adjusted earnings per share is now expected to be in a range of $1.50 to $1.70, well below the earlier expected range of $2.20 to $2.40. According to the report, “The change in guidance is attributed to continued operational challenges within our business, including field service productivity, manufacturing efficiencies, and raw material inflation, which accounted for approximately $0.37 per share.”
According to Chris Killingstad, President and CEO, “Our third quarter results reflect slower growth in North America attributed to timing of key strategic account deals, the restructuring of our field service team, continued manufacturing inefficiencies and raw material inflation, matters we continue to address. While we faced some near-term setbacks, we are staying the course strategically and positioning Tennant to be operationally stronger than ever before. We are ahead of our acquisition plans for IPC, our core Tennant EMEA business grew by 14.6 percent in the quarter and a steady stream of new products has raised our vitality index to 47 percent. I remain confident that we are building the right platform for long-term profitable growth.”
3 Stocks Under $10 That Soared Wednesday
At Zacks, we encourage investors to follow our proven stock-picking system, which places a great deal of emphasis on the importance of earnings estimates revisions in finding winning stocks. On top of that, we strive to cover stocks, big or small, that are making newsworthy moves.
With that said, we understand that low-priced stocks can often become eye-catching investments for many investors. One group of stocks that investors tend to pay particular attention to are those currently trading for $10 per share or less.
These stocks give retail investors the opportunity to buy a substantial position in a firm. However, they are also often subject to massive one-day swings. This means that these under $10 stocks can be some of the biggest day-to-day movers.
Now, let’s take a look at three notable companies trading for less than $10 per share that surged today:
Glu Mobile Inc.
Shares of this developer and publisher of free-to-play mobile video games gained 4.60% on Tuesday. Before Tuesday’s climb, Glu Mobile had already seen its stock price surge nearly 80% during the last year. Looking forward, Glu’s Q4 earnings are projected to soar 75%, while its sales are expected to climb 68.18%, based on our current Zacks Consensus Estimates. Glu is currently a Zacks Rank #2 (Buy) and could be a stock to watch as the mobile gaming revolution continues.
Calumet Specialty Products Partners, L.P.
This maker of specialty hydrocarbon and fuel products—including solvents, waxes, and asphalt—saw its stock price jump 4.52% on Tuesday. Shares of Calumet Specialty Products Partners had already skyrocketed 93.75% since the start of the year. Now, our Zacks Consensus Estimates are calling for the company to post full-year earnings of $0.27 per share, after reporting a loss a year ago. On top of that, CSPP’s full-year sales are projected to gain 4.16% to hit $3.75 billion.
This San Jose, California-headquartered solar panel company is currently a Zacks Rank #1 (Strong Buy). Shares of SunPower Corporation climbed over 5.15% on Tuesday and also experienced after-hours gains. The solar and renewable energy industry can be volatile, but the company is expected to see its bottom line pop substantially this year. Based on current consensus estimates, SunPower’s Q4 earnings are expected to jump 125%, while its full-year EPS is projected to jump 9.78%.
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About the Bull and Bear of the Day
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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