Back to top

The Zacks Analyst Blog Highlights: Yahoo, Aluminum Google, Computer Sciences, Accenture plc and Hewlett-Packard

Read MoreHide Full Article

For Immediate Release

Chicago, IL – April 9, 2012 – 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 Yahoo Inc. , Aluminum Google Inc. , Computer Sciences Corporation , Accenture plc (ACN - Free Report) and Hewlett-Packard Company (HPQ - Free Report) .

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:

Here are highlights from Thursday’s Analyst Blog:

Yahoo to Cut 14% of Workforce

Web pioneer Yahoo Inc.  plans to eliminate 14% of its workforce or about 2,000 jobs in order to reduce operational costs. This layoff is an attempt to optimize the cost structure, concentrate on the core businesses, and thereby improve the company’s competitiveness.

The workforce reduction will be conducted across all the divisions at Yahoo but the product division is expected to be hit the hardest. Along with other unspecified operational changes, the layoffs are expected to save $375 million upon completion of all employee transitions. Currently, the company expects $125 million to $145 million in a pre-tax cash charge relating to employee severance packages.

Management is looking to restructure its businesses by focusing on its online content properties and media business, which drive most of its revenue. In the fourth quarter, Yahoo posted a decent performance, with non-GAAP earnings beating the Zacks Consensus Estimate by a couple of cents.

However, despite being one of the biggest brand names, Yahoo has not done very well in the last few years. The social networking site Facebook and Google Inc.  have been eating away its market share over the years.

In fact, the company has seen limited growth for quite some time, hence the new CEO, Scott Thompson is not leaving any opportunity for additional revenue generation. Thompson plans to provide more information about his strategy during the company's first-quarter earnings announcement, which is scheduled for April 17.

Sometime in mid-March, Yahoo filed a patent infringement suit against Facebook alleging infringement of 10 patents. The counter-suit that Facebook filed against Yahoo’s patent infringement claims is simply the latter’s bad luck as it could drag Yahoo into a long-drawn legal dispute.

We believe that Yahoo’s restructuring efforts are not enough to bring a total turnaround in the company. However, a leaner cost structure will boost margins and earnings growth in the near future.

Government Deals for CSC

Tech behemoth Computer Sciences Corporation  has recently entered into a discussion with the National Health Service (NHS) department of the U.K., which may be expected to extend its relations with the government department. The interested parties have issued a non-binding letter of intent, which is expected to become binding by March 31, 2012.

The relationship between the two may be expected to improve as a result, although it will take some more time to come to an agreement.

Apart from NHS, the company is also enhancing its business prospects with NAVAIR UAS to enhance its business prospects with the U.S. Navy. 

This job has been awarded to three main vendors under its indefinite delivery/indefinite quantity (IDIQ) agreement with them. The contract has been valued at $874 million, to be received over a 60 month period.

As per this agreement, CSC is eligible to receive task orders to fly land-based UAS aircraft to deliver streaming video from electro-optic and infrared cameras directly to military users in a remote theater of operations. The company is expected to deploy trained people, equipment and supplies to execute this job.

These facilities combined together results in cost savings for the customers, who are expected to receive Intelligence, Surveillance, and Reconnaissance (ISR) coverage without any additional investment in labor and equipment. The customer pays only for video hours delivered as a service.

CSC has never found much difficulty in attracting deals. Apart from Government orders, the company has also won some big-ticket private orders in the recent past. Overall, CSC’s pipeline of projects looks good right now and the company continues to augment it at regular intervals.

CSC has won a series of deals over the past six months. The company reported modest third quarter 2012 results, with EPS exceeding our expectation. Although revenues declined on a year over year basis, the flow of new business improved substantially from the year-ago period.

Despite the intense competition in the IT and cloud computing space from both small and big players such as Accenture plc (ACN - Free Report) and Hewlett-Packard Company (HPQ - Free Report) , the European exposure and strained federal budgets; we believe that things are beginning to look up given the new business wins.

Currently, CSC holds a Zacks #3 Rank (implying a short-term Hold rating).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter:

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:

About Zacks 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

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

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

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Accenture PLC (ACN) - free report >>

HP Inc. (HPQ) - free report >>

More from Zacks Press Releases

You May Like