The Zacks Analyst Blog Highlights: Microsoft, Apple, Google, Amazon and AXIS Capital Holdings
by PR Newswire
CHICAGO, March 5, 2013 /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 includeMicrosoft Corp. (Nasdaq:MSFT), Apple (Nasdaq:AAPL), Google (Nasdaq:GOOG), Amazon (Nasdaq:AMZN) and AXIS Capital Holdings Ltd. (NYSE:AXS).
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Here are highlights from Monday's Analyst Blog:
Microsoft Surface to Expand
Microsoft Corp. (Nasdaq:MSFT) will launch the latest version of its tablet Surface, Surface RT with Windows RT in Japan, Mexico, New Zealand, Russia, Singapore and Taiwan. Further, it will launch its Surface Pro with Windows 8 Pro in Australia, China, France, Germany, Hong Kong, New Zealand and the United Kingdom in March.
Microsoft Surface was launched worldwide on Oct 26, 2012, with a price tag of $499.0, which makes it comparatively expensive. However, it combines the functionalities of a tablet and a laptop.
Microsoft is offering two versions of its Surface tablets to the consumer, one with Windows RT and another with Windows 8 Pro. The Surface RT is more of a tablet, which has some features of a laptop. On the other hand, Surface Pro is a laptop, which comes with some features of a tablet. Thus, Microsoft wants to plug the gap for those consumers who want both in a single device.
Microsoft is very bullish about its tablet and is rapidly strengthening its global retail presence. Microsoft is a late entrant into the tablet market and beating the competition at this point will be an uphill task. Other successful tablets such as Apple's (Nasdaq:AAPL) iPads, Google's (Nasdaq:GOOG) Nexus 7, Samsung's Galaxy tablets and Amazon's (Nasdaq:AMZN) Kindle Fire already have a strong presence in the market.
According to a report from IDC, 52.5 million tablets were shipped in the fourth quarter of 2012. Apple shipped 22.9 million units, retained the top position, and gained 43.6% of market share. Samsung, Amazon and others are lagging behind. However, Samsung witnessed a 263.0% jump in its market share from the year-ago quarter.
As per IDC's forecast, tablets may see an uptrend and sales may touch 282.7 million units by 2016. Windows-based tablets may capture 10.0% of the market in the same time period.
Microsoft is still battling the slump in the PC market, which is showing no signs of recovery. Despite Microsoft's late entry, there is still time to create its own niche. Combining the functionalities of a tablet and a laptop, Surface can create interest and attract new tablet users. Hence, expansion of its retail base makes sense. Microsoft badly needs success in the tablet segment as this is the only way to counter the secular decline of in its core PC business.
Microsoft reported revenues, excluding deferrals, of $21.46 billion in the second quarter of fiscal 2013, which was up 34.0% sequentially and 2.7% from last year, in line with our estimates. All except the Entertainment & Devices segment grew both sequentially and from the year-ago quarter. Entertainment & Devices were down year over year.
Microsoft has a Zacks Rank #3 (Hold).
Axis Capital Retained at Outperform
We retain our Outperform recommendation on AXIS Capital Holdings Ltd. (NYSE:AXS) following its fourth-quarter results, where loss per share was narrower than the Zacks Consensus Estimate. The company also has a new share buyback program in its kitty. This property and casualty insurer presently carries a Zacks Rank #2 (Buy).
Why Reiterate?AXIS Capital's fourth-quarter 2012 operating loss of 23 cents per share was narrower than the Zacks Consensus Estimate of a loss of $1.18.
Following the release of the fourth-quarter results, the Zacks Consensus Estimate for 2013 has gone up 3.6% to $4.05 per share as 7 of 12 estimates moved north. Moreover, the Zacks Consensus Estimate for 2014 has also increased 4% to $4.15 per share as 5 of 11 estimates were raised.
New business opportunities across AXIS Capital's lines of business and geography have helped the company achieve growth in premium writings. The Insurance sector in particular, continues to drive solid numbers. AXIS Capital expects gross premiums written to increase in 2013, given favorable pricing momentum sustains in the primary insurance market.
AXIS remains strongly capitalized. Its financial flexibility remains very strong, with a debt-to-total capital ratio of 14.7%. AXIS Capital is maintaining the trend of boosting shareholder value through share buybacks and dividend hikes. The approval of a dividend hike of 4% in Dec 2012 marked the 9th consecutive year of dividend increase. The board also approved a $750 million share buyback program.
We believe that conservative underwriting practices will help the company remain well capitalized. New business generation and platform expansion will also aid the company fuel its top-line growth.
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