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PPG Industries, Range Resources, Ford Motor, Verizon Communications and AT&T

^{Published on 2010-07-26 14:16:20 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: PPG Industries (NYSE: [ PPG ]) as the Bull of the Day and Range Resources (NYSE: [ RRC ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ford Motor Co. (NYSE: [ F ]), Verizon Communications Inc. (NYSE: [ VZ ]) and AT&T (NYSE: [ T ]).

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 ]:

We reiterate our Outperform recommendation on PPG Industries (NYSE: [ PPG ]), a major global supplier of protective and decorative coatings. The global recession adversely affected many of PPG Industries end-use markets, but the company has responded with aggressive restructuring and cost reduction measures, while further increasing its focus on cash flows.

Earnings are recovering and its strong cash position provides the financial flexibility to support earnings growth going forward. Demand improvements are likely to be led by automotive production in 2010. We expect PPG to experience healthy growth driven by strong macro trends. The company should benefit from its increasing focus on the emerging markets, especially Asia.

PPG's share price is surging after strong second quarter results. Full year 2010 EPS estimates have shot up 11 cents over the last 7 days.

[ Bear of the Day ]:

Range Resources (NYSE: [ RRC ]) long-term production prospects are gaining momentum, but while the company's second quarter production increased on the back of solid contribution from its core Marcellus Shale properties, this area is primarily over-pressured and, in some areas, contains rich gas that must be processed further. As such, Range Resources needs more capital as well as new high-pressured lines to gather Marcellus gas.

Although Range Resources is increasing its drilling activity in Northeast Pennsylvania, there is a high risk associated with this acreage due to faultlines and other geologic anomalies. Also, with the bulk of its projected 2010 production hedged, Range Resources may limit its leverage to commodity prices.

We are concerned about the macro factors, particularly regulatory and natural gas as well as natural gas liquids prices. We believe that the company's natural gas-weighted reserves and production profile will further weigh on the stock.

Latest Posts on the Zacks [ Analyst Blog ]:

Ford Profits Improve by $3.34 Billion

Ford Motor Co. (NYSE: [ F ]) posted a profit of $2.7 billion or 68 cents per share (before special items that include sales of Volvo cars, among other things) in the second quarter of the year, far outdoing the Zacks Consensus Estimate of 40 cents per share. The profit improved $3.34 billion from a loss of $638 million or 21 cents per share (before similar adjustments) in the second quarter of 2009.

Sales in the quarter appreciated 17% to $31.3 billion, higher than the Zacks Consensus Estimate of $29.5 billion. Excluding sales of Volvo cars in 2009, sales surged 31%. This companya™s strong results were attributable to better performance by its Automotive operations around the world, driven by strength of new products.

Results by Segment

The Ford Automotive segment witnessed a 22% increase in revenues to $28.8 billion. The pre-tax operating profit was $2.1 billion in contrast with a loss of $1.1 billion a year ago. The improvement reflected favorable net pricing, higher volume and mix.

In North America, revenues jumped 58% to $16.9 billion. The region showed a pre-tax operating profit of $1.9 billion compared with a loss of $899 million a year ago. The improvement was attributable to higher volume, mix and favorable net pricing.

In South America, revenues shot up 44% to $2.6 billion. Pre-tax operating profit in the region was $285 million compared with $86 million a year ago. The increase was due to favorable net pricing and exchange rates as well as higher volume and mix, partially offset by increases in commodity and structural costs.

In Europe, revenues scaled up 7% to $7.5 billion. Pre-tax operating profit was $322 million compared with $57 million a year ago. The improvement was attributable to lower operational costs, partially offset by unfavorable net pricing.

In Asia-Pacific & Africa, revenues surged 50% to $1.8 billion. Pre-tax operating profit was $113 million compared with a loss of $27 million a year ago. The improvement reflected higher industry volumes, lower operational costs and favorable exchange rate.

Forda™s Other Automotive -- consisting primarily of interest and financing-related costs -- revealed a pre-tax loss of $551 million in the quarter due to a net interest expense of $459 million and unfavorable fair market value adjustments of $92 million, associated with the automakera™s investment in Japana™s Mazda Motors.

Verizon Beats Zacks Estimates

Verizon Communications Inc. (NYSE: [ VZ ]) has announced second-quarter 2010 results with adjusted earnings per share (EPS) of 58 cents beating the Zacks Consensus Estimate of 56 cents, and also better than the 52 cents reported a year-ago.

Adjusted EPS excludes approximately $2.3 billion charges that includes 52 cents per share charges associated with the voluntary incentive program for union-represented employees, 6 cents per share charges related to Alltel merger, 4 cents per share of Frontier spin-off charges, and the rest 3 cents per share for a one-time non-cash revenue adjustment.

GAAP net loss in the second quarter 2010 was $198 million or a loss of 7 cents per share, compared to a net income of $1,483 million or an income of 52 cents per share in the year-ago quarter. The largest national wireless carrier posted revenues of $26,773 million for the quarter, down 0.3% year-over-year, also below the Zacks Consensus Estimate of $27,042 million.

Results by Segments

Domestic Wireless

Total wireless revenues for the quarter increased 3.4% year-over-year to $16 billion (59.8% of total revenues), with service revenues reaching $14 billion, up 5.2%, driven by strong customer growth and continued demand for data services. Data revenues grew 23.4% year-over-year, driven by the healthy adoption of integrated devices.

Retail post-paid churn and total churn declined year-over-year to 0.94% and 1.27%, respectively, the lowest in the last couple of years. Service ARPU (average revenue per user) increased 0.9% year-over-year to $51.56. Data ARPU also increased 19.4% to $17.85, representing 34.6% of service ARPU.

Verizon exited the quarter with 92.1 million wireless customers. Net customer additions for the quarter were 1.4 million. Total retail customer base increased 1.1% to 86.2 million. Net retail postpaid subscriber additions for the quarter were 665,000. The maturing domestic wireless market is affecting contract customer growth.

Verizon continues to extend the nationwide coverage of its high-speed 3G wireless network, covering more than 285 million people. Moreover, the company is planning to launch commercial 4G services based on the Long-Term Evolution ("LTE") standard in fourth-quarter 2010 across 25a'30 markets. This will offer the carrier a head start over its archrival AT&T (NYSE: [ T ]), which lags with its 4G LTE network launch planned in 2011.

Wireline

On the wireline side, revenue for the quarter fell 3.3% year-over-year to $11.1 billion due to continued declines across global wholesale and enterprise businesses. Total Broadband connection at the end of the reported quarter was 9.3 million, up 2.5% year-over-year. In the same quarter the company added 28,000 more subscribers compared to the previous quarter.

Momentum for the fiber-to-the-premises network (delivering FiOS services) remains strong, having already covered 15.9 million premises. During the quarter, Verizon added 174,000 and 196,000 new customers for its FiOS TV and FiOS Internet services, both representing a sequential increase. The carrier exited the quarter with 3.2 million (up 36.6%) FiOS TV customers and 3.8 million (up 30.2%) FiOS Internet customers.

The penetration rate of FiOS Internet and FiOS TV averaged 29.7% and 25.9% across all markets, respectively. Total broadband and video revenue in the second quarter 2010 was $1.8 billion, up 20.1% year-over-year.

Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].

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