For Immediate Release
Chicago, IL - April 9, 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
blog include
Yahoo Inc.
(
YHOO
),
Aluminum Google Inc.
(
GOOG
),
Computer Sciences Corporation
(
CSC
),
Accenture plc
(
ACN
) and
Hewlett-Packard Company
(
HPQ
).
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free Profit from the Pros newsletter:
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Here are highlights from Thursday's Analyst
Blog:
Yahoo to Cut 14% of Workforce
Web pioneer
Yahoo Inc.
(
YHOO
) plans to eliminate 14% of its workforce or about 2,000 jobs in
order to reduce operational costs. This layoff is an attempt to
optimize the cost structure, concentrate on the core businesses,
and thereby improve the company's competitiveness.
The workforce reduction will be conducted across all the
divisions at Yahoo but the product division is expected to be hit
the hardest. Along with other unspecified operational changes, the
layoffs are expected to save $375 million upon completion of all
employee transitions. Currently, the company expects $125 million
to $145 million in a pre-tax cash charge relating to employee
severance packages.
Management is looking to restructure its businesses by focusing
on its online content properties and media business, which drive
most of its revenue. In the fourth quarter, Yahoo posted a decent
performance, with non-GAAP earnings beating the Zacks Consensus
Estimate by a couple of cents.
However, despite being one of the biggest brand names, Yahoo has
not done very well in the last few years. The social networking
site Facebook and
Google Inc.
(
GOOG
) have been eating away its market share over the years.
In fact, the company has seen limited growth for quite some
time, hence the new CEO, Scott Thompson is not leaving any
opportunity for additional revenue generation. Thompson plans to
provide more information about his strategy during the company's
first-quarter earnings announcement, which is scheduled for April
17.
Sometime in mid-March, Yahoo filed a patent infringement suit
against Facebook alleging infringement of 10 patents. The
counter-suit that Facebook filed against Yahoo's patent
infringement claims is simply the latter's bad luck as it could
drag Yahoo into a long-drawn legal dispute.
We believe that Yahoo's restructuring efforts are not enough to
bring a total turnaround in the company. However, a leaner cost
structure will boost margins and earnings growth in the near
future.
Government Deals for CSC
Tech behemoth
Computer Sciences Corporation
(
CSC
) has recently entered into a discussion with the National Health
Service (
NHS
) department of the U.K., which may be expected to extend its
relations with the government department. The interested parties
have issued a non-binding letter of intent, which is expected to
become binding by March 31, 2012.
The relationship between the two may be expected to improve as a
result, although it will take some more time to come to an
agreement.
Apart from NHS, the company is also enhancing its business
prospects with NAVAIR UAS to enhance its business prospects with
the U.S. Navy.
This job has been awarded to three main vendors under its
indefinite delivery/indefinite quantity (IDIQ) agreement with them.
The contract has been valued at $874 million, to be received over a
60 month period.
As per this agreement, CSC is eligible to receive task orders to
fly land-based UAS aircraft to deliver streaming video from
electro-optic and infrared cameras directly to military users in a
remote theater of operations. The company is expected to deploy
trained people, equipment and supplies to execute this job.
These facilities combined together results in cost savings for
the customers, who are expected to receive Intelligence,
Surveillance, and Reconnaissance (
ISR
) coverage without any additional investment in labor and
equipment. The customer pays only for video hours delivered as a
service.
CSC has never found much difficulty in attracting deals. Apart
from Government orders, the company has also won some big-ticket
private orders in the recent past. Overall, CSC's pipeline of
projects looks good right now and the company continues to augment
it at regular intervals.
CSC has won a series of deals over the past six months. The
company reported modest third quarter 2012 results, with EPS
exceeding our expectation. Although revenues declined on a year
over year basis, the flow of new business improved substantially
from the year-ago period.
Despite the intense competition in the IT and cloud computing
space from both small and big players such as
Accenture plc
(
ACN
) and
Hewlett-Packard Company
(
HPQ
), the European exposure and strained federal budgets; we believe
that things are beginning to look up given the new business
wins.
Currently, CSC holds a Zacks #3 Rank (implying a short-term Hold
rating).
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ACCENTURE PLC (
ACN
): Free Stock Analysis Report
COMP SCIENCE (
CSC
): Free Stock Analysis Report
GOOGLE INC-CL A (
GOOG
): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
Report
YAHOO! INC (YHOO): Free Stock Analysis Report
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