For Immediate Release
Chicago, IL - February 22, 2012 - 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
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Here are highlights from Tuesday's Analyst Blog:
Equinix Adds Capacity in U.S.
Leading data center solutions provider
) announced its intention to set up a new 232,000 square foot
customer floor space International Business Exchange (IBX) data
center (DC11) in Washington, D.C.
The first phase of the IBX, which is scheduled to start
operation by 2013, will cost $88.0 million. With a total work area
of 42,800 square feet, the first phase of DC11 will accommodate
1,200 cabinets. The subsequent phases will allow the setting up of
an additional 1,800 cabinets.
Apart from scheduling a new data center, Equinix also announced
plans to proceed with the second phase of another local data center
(DC10). Development costs are estimated to be $21.0 million, with
the extension expected to be operational by March 2012.
The expansion was expedited upon sensing the high demand for
Equinix's colocation platform in the region. Washington, D.C.
serves as the eastern hub of Internet traffic exchange in the U.S.,
and is therefore an important business area for Equinix. Increasing
data exchange through Internet calls for the development of more
data centers in the region. Now, with the tenth operating IBX and
the eleventh one underway, it will be easier for Equinix to meet
the growing business needs.
Equinix boasts a presence across various geographical regions
and is increasingly becoming popular among major players in the
tech industry. The company's worldwide presence has resulted in
high network density with a vertically focused approach, which will
continue to support demand growth.
During the last quarter (fourth quarter 2011), the company
witnessed substantial year-over-year revenue growth of 25.0% on
solid geographical contributions partially offset by foreign
exchange headwinds. The U.S. was the strongest of all the regions,
with relatively strong growth.
In the Americas, the average monthly recurring revenue (MRR) per
cabinet increased to $2,133 from $2,110 in the third quarter of
2011. In the Asia-Pacific, MRR per cabinet was $1,863, relatively
flat with $1,868 in the previous quarter. In Europe, cabinet
pricing decreased slightly to $1,199 from $1,210, on account of
foreign exchange weakness.
We believe that the favorable pricing trend in the U.S. coupled
with the planned expansion will boost revenue growth in the
upcoming quarters. Apart from the U.S., Equinix is planning to
capture share in the emerging markets. The company is now targeting
China, India, Japan and Australia for further expansion.
We are also optimistic about the company's recurring revenue
model and future expansion plans. Despite all the positives,
competitive threats from the likes of
) raise our apprehension. European exposure and industry
consolidation are also causes for concern.
Equinix has a Zacks #3 Rank, implying a short-term Hold
Earnings Scorecard: Qualcomm
) reported record first-quarter fiscal 2012 financial results,
where both the earnings per share (
) and revenues exceeded the Zacks Consensus Estimates. The out
performance was primarily attributable to the surge in demand for
high-end 3G smartphones and tablets.
The company's Snapdragon platform and product diversification
strategy induced management to significantly raise the company's
outlook for the second quarter of fiscal 2012 and beyond.
First Quarter Highlights
On a GAAP basis, quarterly net income was $1,401 million or 81
cents per share compared with $1,170 million or 71 cents per share
in the year-ago quarter. However, adjusted (excluding special
items) EPS in the reported quarter came in at 85 cents, surpassing
the Zacks Consensus Estimate of 81 cents.
Total revenue of $4,681 million in the quarter was up 40% year
over year, and surpassed the Zacks Consensus Estimate of $4,569
million. During the first quarter of fiscal 2012, Qualcomm shipped
approximately 156 million CDMA-based MSM chipsets, up 32% year over
year and 23% sequentially.
Gross margin was 62.5% compared with 68.9% in the year-ago
quarter. Quarterly operating margin was 33.1% compared with 37.3%
in the prior-year quarter.
Agreements of Analysts
Of the eight analysts covering the stock in the last 7 days,
seven analysts revised the estimates upward for the second quarter
of fiscal 2012. Likewise, for the third quarter of 2012, all the
seven analysts covering the stock raised their EPS estimates.
Similarly, for fiscal 2012, all the seven analysts covering the
stock in the last 7 days raised the estimates. Likewise, for fiscal
2013, out of the eight analysts covering the stock, seven analysts
increased the estimates.
Most analysts raised the EPS estimate on the back of increased
penetration of 3G-based smartphones into the huge Chinese market.
Moreover, the growing popularity of new Snapdragon S4 processors
has made the analyst more bullish on the stock.
Currently, the Zacks Consensus EPS Estimate for the second
quarter of fiscal 2012 is pegged at 85 cents. The projected annual
growth is 9.74%. Similarly, for the third quarter of fiscal 2012,
the Zacks Consensus EPS Estimate of 78 cents indicates an annual
gain of 24.04%.
Magnitude of Estimate Revisions
During the last 7 days, the current Zacks Consensus Estimates
for the second and third quarter of 2012 remained in line with the
previous estimates of 85 cents and 78 cents, respectively.
Likewise, for fiscal 2012 and 2013, the current Zacks Consensus
Estimates were in line with the prior estimates of $3.35 and $3.78,
With respect to earnings surprises, the company's consistent
track record of beating the estimates in the last four quarters is
expected to persist in the coming quarters. In the last quarter,
Qualcomm outpaced the Zacks estimate by a whopping 6 cents or
No surprises are expected for the ongoing and the third quarter
of fiscal 2012. EPS growth potential for fiscal 2012 is also at
breakeven. However, in fiscal 2013, there is an upside potential of
We believe Qualcomm's record-high earnings; strong balance
sheet, huge product pipelines and better market segmentation by
introducing chipsets for mid-tier and upper-tier smartphones and
tablets segment will act as positive catalysts in the long run.
Moreover, Qualcomm chipsets are recently being used in most
CDMA-based iPhone 4S from
) will further bolster the company's top-line growth in the
We maintain our long-term Outperform recommendation on Qualcomm.
Currently, Qualcomm has a Zacks #1 Rank, implying a short-term
Strong Buy rating on the stock.
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