CHICAGO, March 30, 2011 /PRNewswire/ -- Zacks.com Analyst
Blog features: Amazon.com Inc. (Nasdaq: AMZN),
Google Inc (Nasdaq: GOOG), Apple
Inc (Nasdaq: AAPL), Abobe Inc (Nasdaq: ADBE) and
Whole Foods Market Inc. (Nasdaq: WFMI).
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Here are highlights from Tuesday's Analyst Blog:
Amazon Beats Google, Apple
Amazon.com Inc. (Nasdaq: AMZN) beat both Google
Inc (Nasdaq: GOOG) and Apple Inc (Nasdaq:
AAPL) in the race to provide online storage of media content,
including documents, photographs, music and videos in any format
whatsoever, enabling anytime anywhere access to all.
Amazon has announced two new cloud offerings, which it referred
to as the Cloud Drive and the Cloud Player. The Cloud Drive
indicates the secure storage services it is providing at
differential rates. The first 5GB is free for existing Amazon
account holders, while the next slab (20GB) comes for $20 a year. Additionally, the 20GB would be free
for a year for those who purchase an MP3 album from Amazon. For
those with higher requirements, Amazon will provide space at
additional cost.
Amazon's Cloud Player comes in two versions, one for the web and
the other in the form of an Android app. The web version enables
any PC, Mac or Android smartphone with an Internet Explorer,
Firefox, Safari (for Mac), or Chrome browser to access the music
stored on the Cloud Drive. The reason that the music is not yet
available on iPhones is that Amazon has built the system
on Abobe Inc's (Nasdaq: ADBE) AIR technology, which is
not compatible with the iPhone's iOS.
Amazon is already incorporating the Android Cloud Player into
the Amazon MP3 app for Android, which could enable easy selection
and playing of songs, either from the cloud or from the device.
Amazon's charges are quite reasonable, so there should be early
adopters. Moreover, the "free" part of the deal is just enough to
entice consumers. We also think that a year's free subscription for
an MP3 album was a great idea. Some consumers could decide to wait
for Apple or Google's service, which may be expected to launch
later this year; we think this is probably the reason Amazon put up
this offer.
Of course, there is a real controversy regarding the consumption
of content from online storage, since it is difficult for music
companies and publishers to collect their royalties. As a result,
they have opposed it right from the start. Moreover,
incompatibility between devices and formats also helped increase
sales. The opposition from content providers has been a major
stumbling block for both Google and Apple.
In any case, the way the market is developing, we doubt that
content providers could win, simply because of the wave of new
users that cannot be prevented from consuming songs and videos,
irrespective of whether they have purchased them. And if we really
think about it, whoever paid a royalty for borrowing a friend's
book or album? It's just that the lost opportunity is so much
easier to track these days.
We have a Zacks #3 Rank on Amazon shares, implying a short-term
Hold rating.
Whole Foods Stays Outperform
Whole Foods Market Inc. (Nasdaq: WFMI) offers
investors one of the strongest growth profiles in the industry with
its strong brand image, and marketing and merchandising expertise.
The stock is poised to surge as the demand for healthier and
natural food improves.
Whole Foods has been spurring its revenues through new store
openings, acquisitions and comparable-store sales growth. Given
that the food retailing industry is highly fragmented, the company
has been able to maintain a track record of successful integration
of its regional acquisitions.
The stringent cost-control measures, effective inventory
management and improved store-level performance are driving
earnings growth. Whole Foods recently posted better-than-expected
first-quarter 2011 results on the back of strong sales as shoppers
flocked to the grocery chain.
Quarterly earnings of 51 cents per share surpassed the
Zacks Consensus Estimate of 45 cents
and jumped 59.4% from 32 cents in the
prior year. Whole Foods sustained its top-line growth momentum with
revenue climb 13.8% to $3,003.7
million in the quarter and comfortably surpassed the Zacks
Consensus Estimate of $2,953
million.
Whole Foods now expects an increase of 10.7%-12.8% in total
sales, driven by a 7.2%-9.2% rise in comparable-store sales and a
7%-9% growth in identical-store sales in fiscal 2011. Earlier,
Whole Foods expected an increase of 10%-12% in total sales, driven
by a 5.5%-7.5% rise in comparable-store sales and a 5%-7% growth in
identical-store sales.
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