JAKKS Pacific, Range Resources, the Walt Disney Company, AFC Enterprises and Medicis Pharmaceutical

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: JAKKS Pacific (Nasdaq: [ JAKK ]) as the Bull of the Day and Range Resources (NYSE: [ RRC ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Walt Disney Company (NYSE: [ DIS ]), AFC Enterprises Inc. (Nasdaq: [ AFCE ]) and Medicis Pharmaceutical Corp. (NYSE: [ MRX ]).

"a programming writeoff at one of our equity networks, the timing of ESPN revenue recognition and the effect of one fewer week of operations this year than last"

Full analysis of all these stocks is available at [ http://at.zacks.com/?id=2678 ].

Here is a synopsis of all five stocks:

[ Bull of the Day ]:

JAKKS Pacific's (Nasdaq: [ JAKK ]) third quarter 2010 results came in well ahead of the Zacks Consensus Estimate. Although key brands like WWE, Hannah Montana and Pokemon continued to be a drag on the company's sales growth, improving consumer spending and cost-cutting initiatives benefited the profitability.

We remain confident on the company's long-term growth potential with new product launches, possible acquisitions, improved earnings helped by cost-saving measures, resolution of litigation and a strong financial condition to materialize such growth.

Moreover, the company enters the 2010 holiday season with a strong booking momentum. Impressive product portfolio for 2011 and the recently announced share buyback program will also augur well for the company. Hence, we upgrade the stock from Neutral to Outperform.

[ Bear of the Day ]:

Range Resources (NYSE: [ RRC ]) announced record-setting third-quarter 2010 production volume of 503 million cubic feet equivalent per day (MMcfe/d), up 15% from last year and 7% from the second quarter.

While the company's third quarter production increased mainly on the back of solid contribution from its core Marcellus Shale properties, this area is primarily over-pressured and, in some areas, contains rich gas that must be processed further. As such, Range Resources needs more capital as well as new high-pressured lines to gather Marcellus gas.

Although we appreciate Range Resources increasing focus on liquids, natural gas-weighted production and reserves will weigh on the stock. Our Underperform recommendation for Range Resources remains unchanged at this stage. As such, we see little reason for investors to hold this stock. Our $33 price objective reflects a multiple of 9.3x the trailing 12-month cash flow.

Latest Posts on the Zacks [ Analyst Blog ]:

Disney Lowers Curtain on Fiscal 2010

The Walt Disney Company (NYSE: [ DIS ]), the entertainment conglomerate consisting of Disney and Pixar Studios, ABC Television Network, ESPN, Disneyworld and Disney Resorts, reported fiscal 4th quarter and full-year 2010 earnings results just before the closing bell Thursday. But the results disappointed: 4th quarter EPS reached 43 cents, below the Zacks Consensus Estimate of 46 cents. For the full year, Disney's $2.03 per share missed the consensus of $2.09.

Zacks Consensus Revenue Estimate had been $9,924 million for the 4th quarter, and the most recent estimate was an even-more optimistic $9,936 million. But DIS reported revenues of $9,742 million -- missing expectations by 1.9% and down 1% year over year. The stock fell 3% before regular market trading ended.

Disney President and CEO Robert Iger also cited a series of one-time items that led to the earnings and revenue misses, including "a programming writeoff at one of our equity networks, the timing of ESPN revenue recognition and the effect of one fewer week of operations this year than last," which reportedly impacted results by 9 cents per share. Iger then expressed enthusiasm about its Marvel franchise portfolio going forward. Marvel had been acquired back in the 4th quarter of 2009.

Over the past month, analysts had been turning more positive about Disney earnings, as 6 of 24 analysts upwardly revised estimates for both the 4th quarter and full year. Eight analysts upped their expectations for fiscal 2011 in the past month, as well. That said, Disney shares had also been downgraded from Outperform to Neutral on November 2nd, as 3 analysts had downwardly revised earnings estimates for the quarter.

Among the positive developments articulated in the full-year earnings report, Consumer Products revenues rose 10%, and Studio Entertainment was up 9%. Both can be attributed by the success of 2010 releases such as Toy Story 3.

AFC Beats, Outlook Raised

AFC Enterprises Inc. (Nasdaq: [ AFCE ]) posted its third quarter 2010 adjusted earnings of approximately 23 cents per share, which surpassed the Zacks Consensus Estimate of 18 cents and soared 27.8% year over year from 18 cents in the prior-year quarter.

AFC Enterprises reported a net income of $5.9 million or 23 cents, well above $3.4 million or 13 cents recorded in the year-earlier quarter.

The better-than-expected results were driven by positive same-store sales and the company's 4 strategic plans, which focus on developing the brand, offering more value service to guests and introduce new product innovation along with cost saving initiatives to improve margins and ramp-up new unit growth.

The operator and franchisor of Popeye's restaurants reported total revenue of $34.1 million, which spiked up 6.9% from the year-ago quarter, attributable to positive same store sales. The company also outperformed the Zacks Consensus Estimate of $33.0 million.

Medicis Pharma Tops by a Cent

Medicis Pharmaceutical Corp. (NYSE: [ MRX ]) posted third quarter 2010 earnings of 58 cents per share, beating the Zacks Consensus Estimate by a cent and exceeding the year-ago earnings of 50 cents per share by 16.5%. Higher revenues accounted for increased earnings.

Outlook

For fiscal 2010, Medicis Pharma expects earnings in the range of $2.25 to $2.30 per share on revenues of $698 million to $703 million. The current Zacks Consensus Estimate for fiscal year 2010 is $2.28 per share, at the mid-point of the guided range.

Medicis Pharma also provided guidance for earnings and revenues for the fourth quarter of 2010. The company expects earnings in the range of $0.57 a" $0.62 per share on revenues of $180 million a" $185 million. The fourth quarter Zacks Consensus earnings Estimate is 60 cents per share.

Our Take

We currently have a Neutral recommendation on Medicis Pharma, which is supported by a Zacks #3 Rank (short-term Hold rating). Medicis Pharma recently received approval for additional dosage strengths (55 mg, 80 mg, 105 mg) of acne treatment drug, Solodyn.

The company currently has the US Food and Drug Administrationa�s approval for eight dosing strengths of Solodyn a" 45 mg, 55 mg, 65 mg, 80 mg, 90 mg, 105 mg, 115 mg and 135 mg a" offering greater prescribing flexibility to physicians.

We believe that the company will look to shift patients to the new dosage strengths so as to reduce the impact of the entry of generic versions of older dosages post November 2011. On the third quarter call, Medicis Pharma stated that the 65 mg and 115 mg strengths, which were approved in July 2009, and the new 55 mg, 80 mg and 150 mg strengths, accounted for 70.0% of new prescriptions and 66.8% of total prescriptions.

Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].

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JAKKS Pacific, Range Resources, the Walt Disney Company, AFC Enterprises and Medicis Pharmaceutical