General Mills, Kraft Foods, Unilever, International Business Machines and Netezza

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: General Mills Inc. (NYSE: [ GIS ]), Kraft Foods Inc. (NYSE: [ KFT ]), Unilever (NYSE: [ UL ]), International Business Machines Corp. (NYSE: [ IBM ]) and Netezza Corp. (NYSE: [ NZ ]).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: [ http://at.zacks.com/?id=4579 ]

Here are highlights from Tuesdaya�s Analyst Blog:

Earnings Preview: General Mills

General Mills Inc. (NYSE: [ GIS ]) is scheduled to report its first-quarter 2011 financial results on Wednesday, September 22, 2010. The current Zacks Consensus Estimate for the quarter is 63 cents a share.

Fourth Quarter and Fiscal 2010 Synopsis

General Mills had reported disappointing fourth quarter fiscal 2010 results. For the quarter, adjusted earnings dropped 4.6% to 41 cents per share compared to earnings of 43 cents in the year-ago period. For fiscal 2010, adjusted earnings jumped 16% to $2.30 per share compared with the year-ago earnings of $1.99.

Both the quarterly and yearly results were in line with the Zacks Consensus Estimate. However, the fiscal 2010 earnings results significantly surpassed the companya�s long-term high single-digit growth target.

Total revenue for the reported quarter dipped 2% year over year to $3.6 billion. The quarter saw positive currency translation and flat volumes compared with the year-ago period, but unfavorable price and product mix. However, total revenue for fiscal 2010 grew 1% annually to $14.8 billion, benefiting from both price and product mix. The company projects fiscal 2011 net sales to climb at a low single-digit rate.

Minneapolis-based General Mills expects fiscal 2011 earnings in the range of $2.46 - $2.48 per share. Excluding mark-to-market effects and the tax charge related to health care legislation, the fiscal 2011 earnings guidance reflects an annual growth of 7% a" 8%.

First Quarter 2011 Consensus

Analysts surveyed by Zacks expect General Mills to post first-quarter 2011 earnings of 63 cents a share. The current Zacks Consensus Estimate represents a year-over-year decline of 1.6%. Analyst estimates for the quarter range from a low of 63 cents to a high of 65 cents.

The current Zacks Consensus Estimate has remained stagnant over the last 30 days; with only 3 out of 19 analysts covering the stock revising their estimates downward. In the last 7 days, two analysts have lowered the forecast, while the others have kept their estimates unaltered, leaving the consensus unchanged.

Earnings Surprise History

With respect to earnings surprises, General Mills has reported well above the Zacks Consensus Estimate over the last four quarters with an average of 11.7%. This suggests that General Mills has outperformed average analyst expectations during this period.

General Mills in Neutral Lane

General Mills has an outstanding portfolio of growth products and brands, especially its healthy and convenience packages. Through the Holistic Margin Management (HMM) program, the company manages costs and abates inflation, thus improving margins and gaining over its peers. Further, the recent hike in dividend and authorization of the buyback program ascertains a robust balance sheet, huge cash flow and optimistic long-term outlook.

However, the company faces stiff competition from its rivals, such as Kraft Foods Inc. (NYSE: [ KFT ]) and Unilever (NYSE: [ UL ]). Furthermore, General Mills also encounters competition from local and regional players in the countries in which it operates. Consequently, the company is under pressure to maintain profitability and increase market share.

General Mills is a global consumer food company and the second largest domestic manufacturer of cereals, including the well-known brands of Cheerios, Chex, Total, Kix, Wheaties, Golden Grahams, Trix, Cinnamon Toast Crunch and Lucky Charms. It maintains a Zacks #3 Rank (Hold), in line with our long-term Neutral recommendation on the shares.

IBM Bids for Netezza

A premier Information Technology (IT) services provider, International Business Machines Corp. (NYSE: [ IBM ]) has agreed to acquire data warehouse company Netezza Corp. (NYSE: [ NZ ]) in an all cash transaction of $1.70 billion or $27.00 per share.

The price of $27.00 per share reflects a 9.8% premium on September 17 closing price of Netezza of $24.60. Following the acquisition bid, Netezzaa�s share price rose $3.67 or 14.92% to $28.27. IBMa�s offer values Netezza at 8.9 times of sales ($190.6 million) in its fiscal year that ended in January, 2010.

IBM expects to wrap up the deal by the fourth quarter. The merger is subject to Netezza shareholder approval and regulatory clearances.

Marlborough, Massachusetts based Netezza is a leading company in data warehousing technology. The company makes computer appliances that integrate hardware and software for analyzing a huge amount of data in a quick and efficient manner.

Business analytics/intelligence has gained significant growth in recent times. With a rapid increase in data volumes, organizations are trying to process information on the run at a very short span of time, rather than fetching it from a database. This process calls for high interaction between software and hardware.

IBM has been working on the analytics field for sometime with its System S technology. Since 2005, IBM has invested $10.0 billion in 14 strategic acquisitions (including Cognos in 2007 and SPSS in 2009) to build its business analytics portfolio. Currently, IBM holds 14.5% share of the market, following SAS Institute Inc.'s 33% share.

Most recently, IBM bought OpenPages, a provider of risk management software. Analytics posted a strong growth in the second quarter of 2010 (most recent quarter), which was up 14.0% year over year.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: [ http://at.zacks.com/?id=5514 ].

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=5516 ]

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics 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=4580 ].

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

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.

N@N

General Mills, Kraft Foods, Unilever, International Business Machines and Netezza