CHICAGO, Feb. 18, 2014 /PRNewswire/ --Zacks.com 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 the Arris Enterprises, Inc. (Nasdaq:ARRS-Free Report), SBA Communications Corp. (Nasdaq:SBAC-Free Report), Equinix, Inc. (Nasdaq:EQIX-Free Report), Palo Alto Networks, Inc. (NYSE:PANW-Free Report) and Foster Wheeler AG (Nasdaq:FWLT-Free Report).
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Here are highlights from Friday's Analyst Blog:
Is Arris (ARRS) Poised to Beat Earnings?
Arris Enterprises, Inc. (Nasdaq:ARRS-Free Report), a leading video and broadband gear manufacturer, is scheduled to report fourth-quarter 2013 financial results after the closing bell on Feb 19, 2014.
In the last quarter, the company delivered a 28.57% positive earnings surprise. Let's see how things are shaping up for this announcement.
Factors to Influence This Quarter
Arris completed the acquisition of the cable set-top box business of Motorola Mobility. This will undoubtedly help Arris attain a strong foothold in the high-speed video offerings and Internet delivery markets. The merged entity has a global presence with more than 500 customers in 70 countries.
With Motorola Mobility's Cable Home business in its kitty, Arris is likely to become a formidable player in the video infrastructure and customer premises equipment for the cable TV industry.
Arris is solely dependent on cable operators for its revenues. Lack of industry diversification may result in limited business prospects. Potential shifts in industry dynamics may adversely impact cable TV service providers. This is evident from the fact that large telecom carriers in the U.S. are increasingly expanding their high-speed fiber-based network and satellite TV providers are also upgrading their networks.
Earnings Whispers
Our proven model does not conclusively show that Arris Enterprises is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at $0.42. Hence, the ESP is 0.00%.
Zacks Rank: Arris Enterprises' Zacks Rank #1 (Strong Buy) when combined with a Zacks Earnings ESP of 0.00% makes surprise prediction difficult.
Other Stocks to Consider
Here are some other companies worth considering as our model shows these have the right combination of elements to post an earnings beat this quarter.
SBA Communications Corp. (Nasdaq:SBAC-Free Report) with earnings ESP of +100.00% and a Zacks Rank #2 (Buy).
Equinix, Inc. (Nasdaq:EQIX-Free Report) with earnings ESP of +6.41% and a Zacks Rank #3 (Hold).
Palo Alto Networks, Inc. (NYSE:PANW-Free Report) with earnings ESP of +33.33% and a Zacks Rank #3.
Foster Wheeler to Be Acquired
Foster Wheeler AG (Nasdaq:FWLT-Free Report) recently signed a definitive sell-off agreement with its rival AMEC plc. Following the announcement, the company's share prices increased by 1.8% on the day (Feb 13).
As per the agreement, AMEC will be entailed to acquire all the issued and to be issued share capital of Foster Wheeler for about $3.3 billion or $32.69 per share. The purchase consideration consists of 0.8998 shares of AMEC stock along with a cash component of $16.00 in exchange of one outstanding share of Foster Wheeler common stock. Pending approvals, the deal is expected to culminate in the back half of 2014.
Earlier on Jan 13, Foster-Wheeler had made an announcement stating the provisional agreement between the two companies.
Considering the exchange rates and AMEC's stock price as on Wednesday, Feb 12, the amount represents a gain of 13.8% from the day (Nov 26) of the public announcement of the possible deal and a gain of more than 20% compared with the 3-month volume weighted average price (ending Nov 26, 2013).
Foster Wheeler has been a market leader in mid-stream and down-stream oil and gas industry, which provided it the competitive advantage. However, the company was witnessing a growing need for capacity additions in a number of developing countries.
This acquisition, while meeting these requirements, will also complement Foster Wheeler's long-term objective of expansion across diverse sectors including upstream, minerals and metals. Moreover, this acquisition will further enhance the company's presence in Middle East. AMEC's strength in the upstream exploration will perfectly complement Foster Wheeler's strengths to drive up both top and bottom lines.
Post the acquisition; the combined company is expected to have a strong pro-forma revenues and backlogs of $10 billion each and an employee base of greater than 40,000. The increased capacity along with a broader footprint is likely to allow for increased strategic and commercial benefits to its stock holders.
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