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MOST NOTEWORTHY: The interactive entertainment sector, CVS Corp (CVS) and two large retailers, J.C. Penney (JCP) & Federated Department Stores (FD), topped today's notable initiation list:
  • AG Edwards initiated Electronic Arts Inc (NASDAQ: ERTS), Activision, Inc (NASDAQ: ATVI), THQ Inc (NASDAQ: THQI) with Buy ratings and Take-Two Interactive Software (NASDAQ: TTWO), Midway Games Inc (NYSE: MWY) and GameStop Corp (NYSE: GME) with Hold ratings. The firm believes the video game industry is well-positioned for above-average L-T growth based on positive demographic trends. In addition, AG Edwards expects overall U.S. video game industry retail dollar sales to grow by 39% in 2007.
  • Elsewhere, Wachovia initiated CVS Corp (NYSE: CVS) with an Outperform rating. The firm believes CVS is well-positioned to take advantage of the fundamentals in the PBM business and find cost synergies from the merger.
  • Thomas Weisel initiated both J.C. Penney (NYSE: JCP) and Federated Department Stores (NYSE: FD) with market Weight ratings. The firm believes JCP will have more modest margin expansion going forward and believes high expectations and valuation for FD will limit its outperformance in the near-term.
OTHER INITIATIONS:
  • ThinkEquity started DivX, Inc (NASDAQ: DIVX) with a Buy rating and $26 target.
  • RBC initiated Trident Microsystems, Inc (NASDAQ: TRID) with a Sector Perform rating.
  • UBS initiated Teva Pharmaceutical Industries Ltd (NASDAQ: TEVA) with a Buy rating.
  • Pacific Growth started American Superconductor Corp (NASDAQ: AMSC) with a Neutral rating.
  • Susquehanna started Quality Systems, Inc (NASDAQ: QSII) with a Positive rating.
Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analyst initiations 3-23-07: CVS Corp, JC Penney, Federated Dept initiated today originally appeared on BloggingStocks on Fri, 23 Mar 2007 11:22:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>activisionamerican superconductorAmericanSuperconductoramscanalystatvicvsdivxelectronic artsElectronicArtsertsfdfederatedgamestopgmeinitiationjcpmidwaymwypenneyqsiiqualitytake-twotevatheflyonthewall.comthqitridtridentttwoFri, 23 Mar 2007 11:22:00 EST<![CDATA[Earnings preview on Electronic Arts]]>http://www.bloggingstocks.com/2006/11/02/earnings-preview-on-electronic-arts/http://www.bloggingstocks.com/2006/11/02/earnings-preview-on-electronic-arts/http://www.bloggingstocks.com/2006/11/02/earnings-preview-on-electronic-arts/#commentsFiled under: ,

Electronic Arts (NASDAQ:ERTS) reports earnings today after the close of the market. Consensus estimates are $0.02 for EPS and $672.25 million in revenues. In August the company forecast a loss of -$0.22 to -$0.28 after items and a break-even result before items on revenues of $635 million to $685 million.

This will essentially be the second throw-away quarter for EA as the bulk of the business is centered around the fourth quarter and first quarter of the calendar. Its updated "Madden Football" game posted sales of more than $100 million its first week out of the chute in August.

So this is the throw-away quarter, and that is a given. Now what we have to worry about is the excessively wide range of estimates that exists for the coming quarter. The street is looking for approximately $0.57 EPS and $1.2 Billion, but the lower and higher ranges are apparently $0.40-0.72 and $1.15B to $1.3B. There is also a discrepancy of consensus estimates from service to service. That means that with the stock back up at the highs, you might have to still worry even if they guide slightly up from mid-points. The other worry is that the company has a history of reporting sporadic results and even more sporadic reactions in stock prices.

With the large Madden numbers you would expect that the revenues were attainable. But in this current quarter we get the release of the two new systems going after Xbox 360's lead. We have the Nintendo Wii and the Sony PS3 coming out within days of each other later this month. Both consoles have sold out as far as pre-orders at GameStop and indications seem to suggest some of the same at Best Buy. EA has roughly 30 games under development as of last month. This is actually the second quarter that JamDat has been a subsidiary of the company for mobile operations, so we may have a better grasp of the mobile gaming segment ahead.


Continue reading Earnings preview on Electronic Arts

Earnings preview on Electronic Arts originally appeared on BloggingStocks on Thu, 02 Nov 2006 11:54:00 EST. Please see our terms for use of feeds.

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