CHICAGO, Sept. 2, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Cabela's Inc. (NYSE: CAB) as the Bull of
the Day and McDermott International (NYSE: MDR) as the Bear
of the Day. In addition, Zacks Equity Research provides analysis
DryShips Inc. (Nasdaq: DRYS), Diana Shipping Inc.
(NYSE: DSX) and Excel Maritime Carriers Ltd. (NYSE:
EXM).
(Logo:
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Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
Cabela's Inc.'s (NYSE: CAB) second-quarter 2011 earnings
of $0.32 per share beat the Zacks
Consensus Estimate of $0.27, and
jumped 14.3% from the prior-year quarter. The quarter witnessed
healthy revenue growth and profitability at its retail segment,
sturdy performance at Cabela's CLUB Visa program, strong
merchandise gross margin and increased market share.
Merchandise gross margin expanded 80 basis points to 36.7%
during the quarter. Management reiterated its long-term goal of
increasing the margin by 200-300 basis points, and continues to
expect fiscal 2011 earnings to meet or beat consensus.
The company also remains focused on alleviating bad debt risk in
its credit card business. The gradual improvement in the economy
has lowered delinquencies and charge-offs.
Bear of the Day:
Following a second quarter earnings miss, we are downgrading
McDermott International (NYSE: MDR) shares to Underperform
from Neutral. The company recently reported lower-than-expected EPS
for the June quarter, adversely affected by a less favorable
geographic mix and weak margins in the Middle East.
Near-term bookings remain lumpy at McDermott, as the current
uncertain environment has hurt the economics of building new oil
and gas infrastructure. Additionally, the transfer of the power
generation and government operations has left McDermott with a less
diversified business, thereby heightening its risk profile.
These factors are reflected in our downgrade of the company's
shares. Our $12 price objective
reflects a 2011 P/E multiple of 10.1x.
Latest Posts on the Zacks Analyst Blog:
DryShips Underperforms
DryShips Inc. (Nasdaq: DRYS) declared disappointing
financial results for the second quarter of 2011. All of its three
reporting segments: (1) Drybulk carrier (2) Oil Tanker and (3)
Offshore Drilling, performed poorly in the previous quarter.
Quarterly GAAP net loss was $114.1
million or a loss of 33 cents
per share compared with a net income of $19.5 million or 7
cents per share in the prior-year quarter. However, adjusted
(excluding one-time charges) EPS in the second quarter of 2011 was
4 cents, significantly below the
Zacks Consensus Estimate of 18
cents.
Quarterly total revenue was $224
million, remaining flat year over year, but well below the
Zacks Consensus Estimate of $272
million. Quarterly Drybulk carrier revenue was $93.1 million, down 19.2% year over year. Revenue
from Drilling contracts was approximately $126.6 million, up 16.2% year over year. Oil
Tanker revenue was nearly $4.3
million. Quarterly Time charter equivalent revenue per day
for Drybulk carrier was $28,080, down
14% year over year. Quarterly Time charter equivalent revenue per
day for Oil Tanker was $16,935.
Quarterly total operating expenses were $270 million, up 127.2% year over year. This was
mainly due to higher drilling rigs operating expenses, higher
depreciation and amortization charges, and massive vessel
impairment charges.
Operating loss in the second quarter of 2011 was $46 million compared with an operating income of
$105.4 million in the prior-year
quarter. In the second quarter of 2011, adjusted EBITDA (excluding
gain/loss from interest rate swaps) was $136.2 million compared with $152.3 million in the prior-year quarter.
At the end of the second quarter of 2011, DryShips had
$191.7 million of cash & cash
equivalents and $2,122.5 million of
outstanding debt on its balance sheet compared with $391.5 million of cash & cash equivalents and
$1,988.5 million of outstanding debt
at the end of fiscal 2010. At the end of the second quarter of
2011, debt-to-capitalization ratio was 0.39 compared with 0.34 at
the end of fiscal 2010.
Recommendation
DryShips fiercely competes with other drybulk carriers, such as
Diana Shipping Inc. (NYSE: DSX) and Excel Maritime
Carriers Ltd. (NYSE: EXM). We maintain our long-term Neutral
recommendation onDryShips. Currently, DryShips has a Zacks #3 Rank,
implying a short-term Hold rating on the stock.
Get the full analysis of all these stocks by going to
http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
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