For Immediate Release
Chicago, IL – June 5, 2018 – Zacks Equity Research highlights Anadarko Petroleum (APC - Free Report) as the Bull of the Day, Symantec (SYMC - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Palo Alto Networks (PANW - Free Report) .
Here is a synopsis of all three stocks:
Bull of the Day:
Though oil prices have pulled back a bit from their recent highs, U.S. producers are still performing extremely well, having streamlined operations and reduced expenses during periods of lower price levels over the past 3-4 years. U.S production is on pace to hit 11 million barrels a day this year, more than double the amount produced just 10 years ago.
In fact, so much oil is now being produced in the central and southwest U.S. that many producers report that their biggest bottleneck is transportation – simply moving physical product to the coast where it can be shipped to global markets.
Anadarko Petroleum has been extremely savvy in securing rail and pipeline contracts to insure that its petroleum products (natural gas as well as crude oil) get to market efficiently. In their most recent report to investors, they stated that they have “secured substantial long-term oil transportation capacity with commitments covering more than half the company’s expected 2018 operated production and nearly all of its projected operated production by late 2019.”
Operating primarily in the Delaware Basin in West Texas and New Mexico as well as in Northeast Colorado and the Gulf of Mexico, Anadarko currently produces approximately 643,000 barrels per day and expects that number to increase to an average of 658,000 to 685,000 barrels per day for the full year 2018.
Having soundly beat analyst estimates in the most recent quarter, reporting revenues of $3.045 billion and earnings of $0.52/share, 3% and 21% higher than the Zacks Consensus respectively, the company is now expected to earn $2.73/share in 2018, an increase of 75% over just the past 90 days. Thanks to accelerating earnings estimates, APC is a Zacks Rank #1 (Strong Buy).
APC is also adept at hedging commodity prices effectively, reporting $141M in gains on commodity derivatives in the most recent quarter.
Investors have rewarded the shares which are up 30% YTD versus a return of just 6% for the Oil-Energy market as a whole.
Bear of the Day:
Even though it’s in one of the hottest and most in-demand industries – cyber security – and even though it recently reported quarterly earnings that handily beat analyst estimates, Symantec shares have been in a slump of late, losing nearly a quarter of their value so far in 2018, versus a 3% gain in the S&P 500.
The culprit? Reduced guidance in each of the last two quarters and the revelation of an internal investigation that threatens to cast doubt on previously reported results.
After reporting earnings of $0.46/share on May 10th, beating the Zacks Consensus estimate of $0.40/share by 15%, Symantec disappointed investors with soft revenue figures and by reducing guidance for the second consecutive quarter, predicting Fiscal year 2019 revenues of $4.83B and earnings of $1.58/share.
Analysts were quick to reduce their estimates for the company, with 13 out of 14 represented in the Zacks Consensus Estimates lowering their expectations to an average of $1.59/share, down from $1.82/share just 30 days ago.
Symantec is currently a Zacks Rank #5 (Strong Sell).
The real bombshell in the announcement was the news that the company had hired an outside audit firm and opened an internal investigation into its financial reporting practices based on concerns raised by a former employee. The company did not elaborate on the specific nature of the inquiry, though they did confirm that the issue did not involve a data breach or problem with its services or software.
Symantec voluntarily notified the SEC of the investigation.
Symantec spooked investors even further by stating that they did not have a time frame for the completion of the investigation other than to say that it would likely delay the filing of the company’s annual 10-K report, and that restatement of previously reported results was a possibility.
Even though Symantec has two of the hottest brands in anti-virus and identity theft protection, Norton and LifeLock, the black cloud of accounting irregularities hangs heavy over the shares. Though it’s never positive news, an internal investigation is not necessarily death for a stock, but investors detest uncertainty and Symantec’s decision to not reveal the nature of scope of the potential issue had shareholders running for the exits.
Palo Alto Networks Beats Q3 Earnings, Revenue Estimates, Sales Up 31%
Palo Alto Networks released its third-quarter fiscal 2018 financial results before the market opened on Monday, posting adjusted earnings of $0.99 per share and revenues of $567.1 million.
Palo Alto Networks is currently a Zacks Rank #3 (Hold), which is subject to change based on today’s results. Shares of PANW are up 50% over the last year and have popped 8% during the last 4 weeks. The cybersecurity player’s stock is currently down 1.69% to $205.65 per share through late afternoon trading.
Beat earnings estimates. The company posted adjusted earnings of $0.99 per share, beating the Zacks Consensus Estimate of $0.96 per share.
Beat revenue estimates. The company saw revenue figures of $567.1 million, beating our consensus estimate of $545.79 million.
Palo Alto Networks saw its quarterly revenues climb by roughly 31% from $431.8 million in the year-ago period. Meanwhile, the cybersecurity company’s earnings surged from $0.61 per share.
Looking ahead, Palo Alto Networks said it expects revenue in the range of $625 million to $635 million in Q4, which comes in above our Zacks Consensus Estimates of $619.1 million. The company also noted that it expects full-year earnings in the range of $3.86 to $3.89 per share, which falls in line with our $3.89 estimate.
"We delivered strong fiscal third quarter results with record revenue, deferred revenue and billings, while continuing to capture market share at rates that far outpace the competition," CEO Mark McLaughlin said in a statement. "Our Security Operating Platform utilizes software, the cloud and analytics to deliver increasingly better prevention through automation and ecosystem leverage, while dramatically reducing the complexity of the consumption model for customers."
Check back later for our full analysis on PANW’s earnings report!
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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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