House & Home
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Published in House and Home on Thursday, September 23rd 2010 at 14:11 GMT by Market Wire🞛 This publication is a summary or evaluation of another publication
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Nike Inc. (NYSE: [ NKE ]), FactSet Research (NYSE: [ FDS ]), Wyndham Worldwide Corporation (NYSE: [ WYN ]), Starwood Hotels & Resorts Worldwide Inc. (NYSE: [ HOT ]) and Home Inns & Hotels Management Inc. (Nasdaq: [ HMIN ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
Earnings Preview: Nike, Inc.
The global leader of sports equipment and apparel maker, Nike Inc. (NYSE: [ NKE ]) is expected to report its first quarter 2011 earnings on Thursday, September 23, 2010. The Zacks Consensus Estimate for the first quarter is $1.01 per share.
Surprise History
With respect to earnings surprise, Nike shows a favorable trend in the last 4 quarters. The company has recorded mostly positive surprises in the trailing 4 quarters with the stagnant surprise of 0.0% in the fourth quarter of 2010 to the maximum of 13.48% in the third quarter of 2010. On an average basis, the earnings surprise was a positive 9.20%. Based on the current flow, we expect the company to come up with healthy results in the upcoming quarter.
Our Recommendation
Taking into account Nikea™s dominance in the athletic industry, we believe that the company has the ability to drive growth consistently. The companya™s long-term strategy of aggressively expanding operations in the emerging markets and focus on direct-to-consumer business and other brands add to our positive sentiment.
The unique amalgamation of solid balance sheet strength, free cash flow generation capability and an efficient managerial team will enhance Nikea™s top-line performance in the coming quarter.
However, considering the apprehensions about stringent consumer spending and strong competitors across the globe, such as Adidas and Puma, we are compelled to hold on to the Neutral recommendation in the long run.
With an expectation that the stock will perform in line with the broader U.S. equity market over the next one-to-three months, Nike currently has a Zacks #3 Rank (Hold) rating.
FactSet Tops, Stock Dips
FactSet Research (NYSE: [ FDS ]) reported third quarter 2010 EPS of 83 cents, exceeding the Zacks Consensus Estimate of 80 cents.
Revenue
The company reported revenue for the fourth quarter of $168.2 million, up 8.2% from $155.5 million reported in the year-ago quarter. Factset witnessed some benefits from investments made during the downturn, which helped results across all its key segments.
Revenues from the U.S. were $114.7 million, up 8.0% compared to the year-ago quarter. Non-U.S. revenues also increased 8.0% to $53.5 million.
Annual Subscription Value
Annual Subscription Value (ASV) increased $38.0 million sequentially to $648.0 million in the fourth quarter. Of this, 82.0% of ASV was from buy-side clients and the remainder from sell-side firms performing M&A advisory work and equity research. ASV from FactSet's U.S. operations was $466.0 million, while ASV from international operations amounted to $218.0 million.
The company exited the quarter with 42,800 users, an increase of 2,400 users during the quarter. Client count was 2,110 at quarter-end, a net increase of 35 clients. The annual client retention rate was greater than 95.0% of ASV and 90.0% of clients. Portfolio Analytics (PA) 2.0 was deployed by 693 clients and 6,291 users at quarter-end. PA users increased by 312 sequentially, while the number of PA clients increased by 22.
Operating Results
Operating margin was 34.1% in the quarter, an increase of 10 basis points year over year. The limited expansion in the operating margin was due to the fact that operating expenses increased at a higher rate than revenue. The increase in operating expense can be attributed to the increase in headcount, which improved by 485 employees sequentially.
Net income for the quarter came in at $38.3 million, an increase of 8.3% from $36.3 million reported in the year-ago period. The growth in net income for the quarter was partially offset by other income which declined 24.2% year over year to $72,000. On a fully diluted basis, the quarterly EPS of 83 cents was an increase from 74 cents in the year-ago quarter.
Wyndham & Planet Hollywood Team Up
Wyndham Worldwide Corporation (NYSE: [ WYN ]) subsidiary Wyndham Hotel Group announced recently that it has entered into a license agreement with Planet Hollywood Resorts International LLC.
As per the agreement, Wyndham will franchise the Planet Hollywood Hotels brand and provide management services globally. However, Wyndham will have no right on branda™s trademarks and intellectual property; the rights will be retained to Planet Hollywood only. The Planet Hollywood brand was founded in 1989 and it is renowned as an entertainment-based brand.
Management anticipates that the recent addition of this brand to its portfolio will enable it to broaden its customer base.
We remain positive on the deal as it is in sync with Wyndhama™s strategy to acquire brands and expand through its franchise model, given that it reduces the companya™s capital intensity. Going forward, we expect Wyndham to benefit from its repositioning as a more fee-for-service based business.
In March 2010, Wyndham Hotel Group signed four franchise agreements in India with Ramada brand, bringing the total number of hotels that the company has opened or under development in India to 14.
Wyndhama™s primary competitors in the hotel industry include Starwood Hotels & Resorts Worldwide Inc. (NYSE: [ HOT ]) and Home Inns & Hotels Management Inc. (Nasdaq: [ HMIN ]).
Wyndham currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.
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