Rudolph Beats Estimates – Analyst Blog
Rudolph Technologies, Inc (RTEC) reported non-GAAP diluted earnings per share of 36 cents for the fourth quarter 2010, beating the Zacks Consensus Estimate of 31 cents. The result compares favorably with last year's 2 cents.
The GAAP earnings provided by the company was 30 cents per share, which increased significantly from a loss of 20 cents in the prior year quarter.
Quarter in Detail
Revenue for the quarter increased 86.9% from the prior year to $54.0 million, which failed to beat the Zacks Consensus Estimate of $55.0 million. International represented about 63.0% of sales, down from 71.0% last year, while domestic represented 37.0% of sales, up from 29.0%. Revenue from front-end semiconductor customers were 79.0% of revenue and back-end customers were 21.0%.
Gross profit increased 149.6% to $29.2 million from last year. Gross margin increased from 40.5% to 54.1% in light of higher revenues, which included an increase in software sales, higher average selling prices and lower reserves owing to better inventory utilization.
Non-GAAP operating income increased from $1.0 million last year to $13.0 million. Operating margin increased from 3.5% in the previous year quarter to 24.1%.
Conclusion
Analyst estimates remained stable in the run up to the earnings release. The average estimate was 31 cents when the company reported. We note that Rudolph Technologies has consistently exceeded estimates over the past year or so. The average surprise in the preceding 4 quarters is a positive 55.52%, and another positive surprise was therefore expected.
Rudolph Technologies faces stiff competition from Camtek Ltd. (CAMT) and KLA-Tencor Corporation (KLAC).
We currently have Zacks # 3 Rank for Rudolph Technologies, which translates into a Hold rating on short term basis. We have an "Outperform" recommendation on long term basis.
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Rudolph Beats Estimates – Analyst Blog
Rudolph Technologies, Inc (RTEC) reported non-GAAP diluted earnings per share of 36 cents for the fourth quarter 2010, beating the Zacks Consensus Estimate of 31 cents. The result compares favorably with last year's 2 cents.
The GAAP earnings provided by the company was 30 cents per share, which increased significantly from a loss of 20 cents in the prior year quarter.
Quarter in Detail
Revenue for the quarter increased 86.9% from the prior year to $54.0 million, which failed to beat the Zacks Consensus Estimate of $55.0 million. International represented about 63.0% of sales, down from 71.0% last year, while domestic represented 37.0% of sales, up from 29.0%. Revenue from front-end semiconductor customers were 79.0% of revenue and back-end customers were 21.0%.
Gross profit increased 149.6% to $29.2 million from last year. Gross margin increased from 40.5% to 54.1% in light of higher revenues, which included an increase in software sales, higher average selling prices and lower reserves owing to better inventory utilization.
Non-GAAP operating income increased from $1.0 million last year to $13.0 million. Operating margin increased from 3.5% in the previous year quarter to 24.1%.
Conclusion
Analyst estimates remained stable in the run up to the earnings release. The average estimate was 31 cents when the company reported. We note that Rudolph Technologies has consistently exceeded estimates over the past year or so. The average surprise in the preceding 4 quarters is a positive 55.52%, and another positive surprise was therefore expected.
Rudolph Technologies faces stiff competition from Camtek Ltd. (CAMT) and KLA-Tencor Corporation (KLAC).
We currently have Zacks # 3 Rank for Rudolph Technologies, which translates into a Hold rating on short term basis. We have an "Outperform" recommendation on long term basis.
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Rudolph Beats Estimates – Analyst Blog
Rudolph Technologies, Inc (RTEC) reported non-GAAP diluted earnings per share of 36 cents for the fourth quarter 2010, beating the Zacks Consensus Estimate of 31 cents. The result compares favorably with last year's 2 cents.
The GAAP earnings provided by the company was 30 cents per share, which increased significantly from a loss of 20 cents in the prior year quarter.
Quarter in Detail
Revenue for the quarter increased 86.9% from the prior year to $54.0 million, which failed to beat the Zacks Consensus Estimate of $55.0 million. International represented about 63.0% of sales, down from 71.0% last year, while domestic represented 37.0% of sales, up from 29.0%. Revenue from front-end semiconductor customers were 79.0% of revenue and back-end customers were 21.0%.
Gross profit increased 149.6% to $29.2 million from last year. Gross margin increased from 40.5% to 54.1% in light of higher revenues, which included an increase in software sales, higher average selling prices and lower reserves owing to better inventory utilization.
Non-GAAP operating income increased from $1.0 million last year to $13.0 million. Operating margin increased from 3.5% in the previous year quarter to 24.1%.
Conclusion
Analyst estimates remained stable in the run up to the earnings release. The average estimate was 31 cents when the company reported. We note that Rudolph Technologies has consistently exceeded estimates over the past year or so. The average surprise in the preceding 4 quarters is a positive 55.52%, and another positive surprise was therefore expected.
Rudolph Technologies faces stiff competition from Camtek Ltd. (CAMT) and KLA-Tencor Corporation (KLAC).
We currently have Zacks # 3 Rank for Rudolph Technologies, which translates into a Hold rating on short term basis. We have an "Outperform" recommendation on long term basis.
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IRF Surpasses Estimates – Analyst Blog
International Rectifier Corporation (IRF) reported second quarter 2011 diluted earnings per share of 62 cents moving way ahead of the Zacks Consensus Estimate of 49 cents per share. This also compares favorably with a sequential increase of 47.6% and an increase of 1650% from net loss of 4 cents from year ago quarter.
Management reasoned executing on the strategy to have delivered one of the most profitable quarters for the company in years. Strong demand in the appliance, industrial and automotive markets helped to ease off the weakness in consumer and computing markets.
Quarter That Was
IRF reported revenue of $281.7 million and was just ahead of the Zacks Consensus Revenue Estimate of $281.0 million. Revenue increased marginally by 0.3% sequentially but surged 34.0% from prior year quarter. Among the segments Power Management Devices contributed the most with $112.6 million or 39.9% of the total revenue. Following next, Energy-Saving Products contributed $63.1 million or 22.4%.
Gross profit increased 92.7% from same quarter last year and 11.2% sequentially to $121.0 million. Lower manufacturing costs due to higher cost absorption related with an increase in inventory in anticipation of future demand and a higher gross margin product mix led to the gross margin’s sequential increase of 430 basis points to 43%. Gross margin was also up from 29.9% in the year ago quarter.
Operating income increased 41.1% on a sequential basis to $44.6 million. Operating income contributed for 15.8% of the total revenue in the reported quarter compared with 11.3% sequentially.
IRF exited the quarter with cash, cash equivalents and marketable investments of $602.5 million and included restricted cash of $3.4 million.
During the quarter the company purchased 170,000 shares of its common stock for $4.9 million and has 69,791,968 shares outstanding.
Quarter Ahead
Management expects revenue in the following quarter to be in the range of $285-$295 million. Zacks Consensus Revenue Estimate expects the revenue to be $273 million. Gross margin is expected to be between 39%-39.5%. Management also stated that strength in appliance, industrial and automotive markets is expected to continue and the company is witnessing the early signs of recovery in computing.
Conclusion
Estimates for the quarter had been trending up in the run-up to the earnings release, though only 1 analyst gave a positive revision in the last 30 days. The full-year estimate for next year has moved up over the past month to $2.00 per share from $1.98, with 1 analyst giving a positive revision. The full-year Zacks Consensus Estimate for 2010 had increased to $1.76 from $1.73 thirty days ago.
IRF exists in the market in the face of competition from Power Integrations Inc. (POWI).
We currently have a Zacks #2 Rank for IRF which translates into a Buy rating on short term basis. On a longer term we currently have an Outperform rating.
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Earnings Preview: Lincoln National – Analyst Blog
The U.S. life insurer Lincoln National Corp. (LNC) is scheduled to release its fourth quarter earnings results after the market opens on February 2, 2011. The Zacks Consensus Estimate for the fourth quarter is 88 cents per share, representing a loss of about 2.2% over the year-ago quarter.
Following the third quarter trends, improvement in deposits, net flows and ending account balances could continue to accelerate the book value growth. This fundamental strength will also help drive the top line expansion. However, continuous increase in expenses and charges along with the low interest rate milieu could hamper the bottom line recovery.
Previous Quarter Performance
Lincoln reported third quarter operating earnings per share of 63 cents came way behind the Zacks Consensus Estimate of 87 cents and 84 cents recorded in the prior-year quarter.
Results were primarily impacted by the company’s annual comprehensive review of actuarial assumptions and model work, which resulted in a net charge of $72 million or 22 cents per share. Besides, the current low interest rate environment also added to the adverse results.
Consequently, operating income declined 25.4% year over year to $206 million. However, net income available to common shareholders was $245 million or 75 cents per share compared with $137 million or 44 cents per share in the year-ago quarter.
Lincoln’s total revenue increased to $2.61 billion from $2.08 billion in the prior-year quarter. This also came in above the Zacks Consensus Estimate of $2.53 billion.
While growth from annuities and defined contributions remained modestly strong under the Retirement Solutions’ segment, these were partially offset by continued weakness in life insurance sales.
Gross deposits of $1.3 billion were up 14% versus prior year. However, total net outflows were $278 million versus net inflow of $144 million in the year-ago quarter, reflecting the wrong timing in placing few large cases.
Lincolnreported improved deposits of $5.5 billion and net flows were $1.7 billion. Ending account balances increased 10% year over year to $150 billion, primarily driven by positive net flows and equity market appreciation. Book value per share came in at $42.78, up from $35.91 in the year-ago quarter.
Agreement with Analysts
Ahead of the earnings release, we did see some variation in analyst estimates over the past 30 days. However, only minor changes were noticed over the past 7 days. Hence, the estimate revision trends and the magnitude of such revisions justify moderate changes in the sentiment.
In the last 30 days, 9 of the 17 analysts have raised their estimates for the fourth quarter and 8 raised the same for 2010. Further, 11 of the 18 analysts raised its estimate for 2011, overall providing a strong directional movement. This implies that the analysts have provided a positive outlook and indicate chances of some upward pressure on the results.
With the repayment of the government bailout amount last year, Lincoln is focused on keeping its balance sheet at low risk, a positive that could increase operational efficiencies by deploying capital through share repurchases and dividend payments.
Magnitude of Estimate Revisions
In the last 90 days, estimates for the fourth quarter moved only by a couple of cents following the third quarter results. However, earnings per share dropped by 22 cents to the current level of $3.23 per share for full year 2010.
Meanwhile, for fiscal 2011, estimated earnings per share remained constant at $3.74, over the past 90 days. This trend reveals lack of clarity in the analysts’ opinion about Lincoln over the near-to-intermediate term.
Earnings Surprise
Going by past trends, we have a slightly mixed opinion about Lincoln outperforming its peer group in the near term. The company’s reported earnings per share exceeded its expectations for two of the last four quarters and has a negative four-quarter average surprise of 2.09%.
Our Take
Lincoln remains well-capitalized by achieving expanded distribution relationships, improved deposits and net inflows, generating higher ROE and book value. However, the near-term outlook remains cautious, with volatile economic conditions, competitive pressures and low interest rate environment restricting desired investment income growth.
Prime peers such as Aflac Inc. (AFL) and Prudential Financial Inc. (PRU) are performing equally well in the life insurance sphere.
Overall, as a result of its strong capital leverage, efficient debt restructuring and sound ratings, Lincoln is poised to return capital to its shareholders in the near future, thereby retaining investors’ confidence. Lincoln aims to buy back common equity shares worth approximately $125 million, over the following 15 months.
The company also aims to redeem all of its outstanding 6.75% Series F Trust preferred securities worth $150 million. Its comprehensive capital plan is also helping it to mitigate balance sheet risk and provide liquidity cushion for its long-term growth.
Hence, we currently provide Neutral recommendation on Lincoln, given the risk-reward balance in the intermediate term. Thisalso corresponds to the Zacks #3 Rank (short-term Hold).
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ResMed EPS In Tune with Zacks Ests – Analyst Blog
ResMed Inc. (RMD) reported second quarter 2011 EPS of 37 cents keeping in line with the Zacks Consensus Estimate but surpassing the year-ago result by a penny. The company reported revenue of $306 million, up 11% (14% at constant exchange rates, CER) compared with the year-ago quarter. However, revenues missed the Zacks Consensus Estimate by $4 million.
Based on a favorable product mix and vastly under-penetrated and growing sleep-disorder breathing market, ResMed recorded a robust 10% growth in the domestic market revenue to $162.6 million. Besides, revenues earned from the international market increased 12% to $142.8 million. Moreover the company benefited from strong sale of S9 Autoset and newly launched wide range of masks.
Gross profit for ResMed increased 13.2% to $185.9 million. The revenue increase led to a 110 basis point expansion in gross margin to 60.7% despite an 8% increase in cost of sales.
Operating expenses (excluding depreciation and amortization) witnessed a 9% increase year over year to $113.5 million led by a 9% rise in selling, general and administrative (SG&A) and a jump of 15% in research and development (R&D) expenses.
The increase in SG&A expenses was mainly due to sales expansion whereas the rise in R&D expenses was due to depreciation of the domestic currency against the Australian dollar. However, despite higher expenses, operating income increased 20.6% year over year to $72.4 million. Operating margin expanded 180 basis points to 23.6% on the heels of higher revenue.
ResMed exited the quarter with cash and cash equivalents of $616.2 million, up 26% from $488.8 million at the end of June 2009. Cash flow generated from operations was $68.3 million.
ResMed is one of the leading players in the market for generators, masks, and related accessories for the treatment of obstructive sleep apnea and related respiratory disorders. The company is focused on medical equipment for the diagnosis and treatment of sleep-disordered breathing. In addition, the industry is benefiting from an aging population and an inclination to avail medical care away from hospitals.
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ABB Completes Baldor Acquisition – Analyst Blog
ABB Ltd. (ABB) recently completed its previously announced acquisition of a leading industrial motors company of North America, Baldor Electric Company, for $4.2 billion, including net debt of $1.1 billion. The transaction was initially announced on November 30, 2010.
The acquisition helps in achieving ABB’s goal of becoming a leader in the North American Industrial motors business and a leader in movement and control in industrial applications in global markets.
The inclusion of Baldor’s strong NEMA motors product line to ABB’s product portfolio and leverage from Baldor’s leading market position in industrial motors will aid ABB to overcome the loopholes in its automation portfolio in North America.
ABB also benefits from Baldor’s expanding and lucrative mechanical power transmission business. The company’s vast distribution network will help Baldor business to expand globally. The Baldor acquisition adds about 6,800 employees to ABB’s North American workforce, bringing the number of ABB’s employees in North Americato approximately 17,000.
In the previous release it was stated Baldor management and brand name will be maintained by ABB and the Fort Smith headquarters of Baldor will become ABB’s motor and generator business headquarters for North America. The merger is expected to provide $100 million annual cost synergies and global revenue synergies of atleast the same amount.
The increasing demand for energy-efficient motors favors the long-term prospects of ABB. Baldor’s high-efficiency motors will benefit ABB significantly as the U.S.market for these motors is expected to grow 10% to15% in 2011.
ABB Ltd. is a Zurich (Switzerland) based power and automation technology company. The company operates in approximately 100 countries structuring its global organization into five regions: Europe, the Americas, Asia, the Middle East and Africa. A major competitor of ABB is Siemens AG (SI).
We have a Zacks #2 Rank (short-term Buy rating) on ABB Ltd.
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Chesapeake, CNOOC Sign 2nd Deal – Analyst Blog
Oklahoma-based independent oil and natural gas company Chesapeake Energy Corporation (CHK) has inked its second deal with China's top offshore oil producer CNOOC Limited (CEO) for the sale of stakes in its U.S. Niobrara shale project. The deal is expected to close in the first quarter of 2011.
Per the terms of the deal, CNOOC International, a unit of the parent company CNOOC Limited, will pay $570 million in cash for the undivided interest of 33.3% for Chesapeake's 800,000 net oil and natural gas leasehold acres in the Denver-Julesburg (DJ) and Powder River Basins in northeast Colorado and southeast Wyoming.
CNOOC Limited will contribute around 66.7% of Chesapeake's costs of up to $697 million to drill and complete wells in the area. There is also an option for CNOOC Limited to purchase 33.3% interest of any additional acreage acquired by Chesapeake in the basin.
Chesapeake currently acts as an operator of the project, with 16 producing wells in the regions. The company generated initial production rates of up to 1,000 barrels of oil and 3.0 million cubic feet of natural gas per day and aims to develop net unrisked unproved resource potential of up to 5.0 billion barrels of oil equivalent in the coming decades.
Following the investment from CNOOC Limited, Chesapeake expects to operate a respective 10 and 20 rigs by year-end 2011 and 2012 from the current level of 5 operating rigs.
Management of Chesapeake and CNOOC Limited remain highly upbeat regarding the continuous alliance of the two companies. In November, last year, Chesapeake sold its one-third undivided interest in the Eagle Ford Shale to CNOOC for $1.08 billion.
Chesapeake believes that accelerated drilling activities in the domestic energy arena will eventually reduce the country’s dependence on oil imports and also pave way for ample employment opportunities. In addition, this project is targeted vastly toward enhancing supply in the energy sector and reducing greenhouse gas emissions.
We believe that this collaboration will endow Chesapeake with the necessary capital required to support the development and exploration of its resources as well as strengthen business ties between U.S. and China.
Chesapeake currently retains a Zacks #3 Rank, which translates into a short-term Hold rating, while we have a Zacks #2 Rank (short-term Buy recommendation) on CNOOC Limited shares.
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Ratings Action on CIGNA – Analyst Blog
Late last week, health insurance company CIGNA Corp. (CI) received rating action from A.M. Best Co. wherein it affirmed the company’s issuer credit rating (ICR) of “bbb.”
It also affirmed the strength rating (FSR) of “A” and ICRs of “a” for some subsidiaries of CIGNA including: Connecticut General Life Insurance Company Life Insurance Company of North America, CIGNA Life Insurance Company of New York and CIGNA Health and Life Insurance Company. The outlook on all the ratings has been upgraded to stable from negative.
A.M. Best’s outlook revision reflects CIGNA’s continued efforts to shore up its risk-based capital level since the scare in 2008, enabling it to pursue its capital deployment priorities.
CIGNA also remains comfortably positioned with respect to the U.S. Health Care Reform Act since it generates approximately 40% of its revenues from activities unrelated to the U.S. health care market.
In addition, within the health care business, more than 80% of revenue comes from fee-based or service-based activities, rather than from risk-based plans. The company has a relatively smaller risk exposure to the recently enacted federal health care act.
Moreover, minimum Medical Loss Ratio (MLR) implementation with respect to individual and small group policies will not have much of a negative impact on CIGNA as these segments contribute less than 3% to its operating income.
Negatives to the rating outlook include CIGNA’s variable annuity death benefits and other run-off reinsurance businesses, which are a clear drag on management’s time and clarity of story to the investment community.
However, of late, dampened volatility has removed the strain on reserve strengthening, and the rating agency believes that CIGNA has been able to set-off losses from these units against earnings from its profitable health care segment.
Also, CIGNA’s substantial investment exposure to commercial mortgages (18% of invested assets) might pose a problem due to the persistence of high loan to value ratio loans, which carry higher risk of default.
CIGNA also runs the risk of losing its national account members due to declining persistency, higher competition among companies for large group Administrative Services Only business.
One of CIGNA’s subsidiary, CIGNA Worldwide Insurance Company the medical Health Maintenance Organizations (HMO) and dental HMO subsidiaries of CIGNA witnessed itsFSRs being increased to A from A - and ICRs being raised to “a” from “a-” with its outlook being upped to stable from negative. A.M.Best sees these units as strategic subsidiaries of CIGNA as they offer a broad suite of products across different geographical areas.
Earlier this month, Fitch ratings also affirmed CIGNA’s ratings and revised the ratings outlook to stable from negative. Fitch’s rating outlook revision over the company followed its revised outlook for the U.S. Health Insurance and Managed Care sector to stable from negative.
CIGNA is expected to release fourth quarter and full year 2010 results on February 3, before the opening bell. The Zacks Consensus Estimate is $1.01 per share for the quarter. The Zacks Consensus Estimate of $4.49 for the full year aligns with the higher range of management’s guidance of $4.35–$4.50.
Headquartered in Philadelphia, CIGNA competes with other players such as Aetna Inc. (AET), UnitedHealth Group Inc., (UNH) and WellPoint Inc. (WLP).
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Earnings Preview: NASDAQ – Analyst Blog
Leading exchange operator NASDAQ OMX Group Inc. (NDAQ) is scheduled to release its fourth quarter earnings results before the market opens on February 2, 2011. The Zacks Consensus Estimate for the fourth quarter is 51 cents per share, representing growth of about 10.6% over the year-ago quarter.
Following the third quarter trends, the positive impact of exchange rates and substantially improved revenues from market and transaction services and market technology, cash equity and derivative trading will continue to drive the top-line expansion. Moreover, disciplined expense management would also help the bottom-line recovery.
However, low market data revenue and orders intake, decline in industry volumes and low average net fee per share on NASDAQ’s U.S. trading system also weighs on the performance. Further, the SMART Group acquisition will also be dilutive to results at least for a couple of quarters.
Previous Quarter Performance
NASDAQ reported third quarter operating earnings of 50 cents per share that surpassed the Zacks Consensus Estimate of 47 cents and prior-year quarter earnings of 42 cents per share. However, operating earnings missed by a couple from 52 cents per share reported in the prior quarter.
Total operating earnings, on non-GAAP basis, were $169 million, up from $152 million in the prior-year quarter but down from $183 million reported in the prior quarter.
Total net exchange revenues increased 7% year over year to $372 million, marginally higher than the Zacks Consensus Estimate of $371 million.
As per segments, Market Services net exchange revenues for the quarter increased 8% from the year-ago period to $249 million. Issuer Services revenues increased 4% year over year to $85 million, while Market Technology revenues grew 6% year over year to $38 million.
During the reported quarter, NASDAQ’s order intakes dipped substantially to $27 million from $37 million in the year-ago quarter. However, total order value increased to $446 million from $318 million in the prior year quarter.
On GAAP basis, total operating expenses decreased to $207 million from $218 million reported in the year-ago quarter, while operating expenses increased 3% year over year to $203 million, on non-GAAP basis.
Agreement with Analysts
Ahead of the earnings release, we do not see any significant variation in analyst estimates over the past 30 days, while no changes were noticed over the past 7 days. Hence, the estimate revision trends and the magnitude of such revisions justify no major changes in the sentiment.
In the last 30 days, four of the 18 analysts have lowered their estimates for the fourth quarter while one upward revision was witnessed. Similarly, 5 downward and one upward revision were witnessed for 2010.
Further, 2 of the 19 analysts raised their estimate for 2011 while one analyst lowered estimate, providing no clear directional movement. This implies that the analysts have provided a neutral outlook and do not foresee any significant upward or downward pressure on the results.
However, the neutral approach towards NASDAQ also gives scope for some positive surprises in the first half of 2011, particularly, with increased clarity on the potential effects of the ongoing financial overhaul regulations.
Moreover, the company is focused on keeping its balance sheet at low risk, a positive that could increase operational efficiencies through a strong expense management, headcount reduction, lower taxes and fewer charges.
On the other hand, it could also point out the absence of any other major catalyst for growth and higher expense on account of the recent SMART group acquisition. Management also raised its expense outlook for 2010.
Magnitude of Estimate Revisions
In the last 90 days, estimates for the fourth quarter dipped only by a whisker to 51 cents, following the third quarter results. Meanwhile, earnings per share remained constant at the current level of $1.94 per share for full year 2010.
However, for fiscal 2011, estimated earnings per share increased to $2.36 from $2.26, over the past 90 days. This trend reveals a moderately positive outlook for the forthcoming year.
Surprise
Going by past trends, we have a slightly mixed opinion about NASDAQ in the near term given the increased competitive pressures and regulatory uncertainty. The company’s reported earnings per share exceeded its expectations for three of the last four quarters and has a positive four-quarter average surprise of 2.63%.
Our Take
NASDAQ continues to drive its operating leverage through a healthy balance sheet, which is based on strong cash flow and a diverse business model. Additionally, strong debt and credit rating upgrades in 2010 also reflect sound financial outlook and improvement in operating efficiencies.
NASDAQ continues to return value to its shareholders through the ongoing share repurchase program, thereby retaining investors’ confidence in the stock.
However, NASDAQ continues to suffer from an eroding market share and weak trading volumes, which is directly affected by economic and market conditions, volatility of interest rates, inflation and price level. In addition, government regulations such as restrictions on high frequency trading and taxes charged on securities transactions could have an adverse effect on the overall trading volumes.
NASDAQ has been facing intense competition that tends to reduce the market share and the leverage of its business. While arch-rival NYSE Euronext Inc. (NYX) has been snipping off market share, more trading platforms such as CME Group Inc. (CME), CBOE Holdings Inc. (CBOE) and IntercontinentalExchange Inc. (ICE) launched over the recent years have been giving way to severe competition primarily on the OTC, futures and options market.
Despite these risks, NASDAQ’s diversified business mix, cost, revenue and technology synergies will enable it to benefit from improving economic conditions in future. We believe that NASDAQ’s operations will gain momentum once the global economy stabilizes and rebounds to its historical highs.
Hence, we currently provide Neutral recommendation on NASDAQ, given the equal measure of risk and reward in the intermediate term. Thisalso corresponds to the Zacks #3 Rank (short-term: Hold).
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