Berkshire Hathaway, Universal Forest Products, Verizon, AT&T and Apple

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: Berkshire Hathaway (NYSE: [ BRK.B ]) as the Bull of the Day and Universal Forest Products Inc. (Nasdaq: [ UFPI ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Verizon Communications (NYSE: [ VZ ]), AT&T Inc. (NYSE: [ T ]) and Apple Inc (Nasdaq: [ AAPL ]).

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 believe Berkshire Hathaway (NYSE: [ BRK.B ]) is poised to grow its top line as the growing rail demand for freight catches up with the stabilizing economy. Also, higher revenues are expected from its Utilities & Energy and Manufacturing, Service & Retail businesses as consumers increase spending.

Also, a solid balance sheet, adequate liquidity and continuing trend of growing book value were among the positives. However, near-term risks related to its exposure to derivative contracts and lack of clarity on a successor to Warren Buffet remain concerns.

Our six-month target price of $100.00 per share equates to about 21.1X our earnings estimate for 2010. This target price implies an expected total return of 19.8% over that period. This is consistent with our Outperform recommendation on the shares.

[ Bear of the Day ]:

Universal Forest Products Inc. (Nasdaq: [ UFPI ]) reported disappointing results in the third quarter of 2010, with EPS falling 39 cents short of Zacks Consensus. Healthy top-line growth was offset by higher cost of sales due to volatile lumber prices in the quarter.

Universal's huge dependence on general market conditions and growth in end-markets increase top-line risks in the event of any adverse conditions. Besides, significant volatility in the cost of commodity lumber products from primary producers is problematic.

The company also derives a large portion of its sales from one single customer, which exposes it to customer concentration risks. In anticipation of a lack of positive catalysts, we maintain an Underperform recommendation.

Latest Posts on the Zacks [ Analyst Blog ]:

Verizon Wireless and FiOs Drive 3Q

Verizon Communications (NYSE: [ VZ ]), the second largest U.S. phone company, declared its third quarter earnings result before the opening bell. The company reported adjusted earnings of 56 cents per share beating the Zacks Consensus Estimate by 2 cents and was well above the year-ago earnings of 41 cents. Stronger-than-expected earnings were led by continued strength in Wireless, FiOs and strategic business services.

Adjusted earnings excludes approximately total non-cash charge of 25 cents per share, which includes 19 cents associated with the voluntary incentive program for union-represented employees, 2 cents related to Alltel merger, and 4 cents resulting from Frontier spin-off charges.

Total revenue inched up 2.1% to $26.5 billion from the year-ago quarter and was above the Zacks Consensus Estimate of $26.3 billion.

Segment Results

Wireless: Total wireless revenues climbed 6% year over year to $16.2 billion (61.4% of total revenues), with service revenues reaching $14.2 billion, up 7.7%. Data revenues grew 22.8% year over year, driven by the healthy adoption of integrated devices.

Retail churn and total churn declined year over year to 1.43% and 1.36%, respectively. Verizon continues to generate low retail post-paid churn at 1.07% during the third quarter. Service ARPU (average revenue per user) inched up 1.8% year over year to $51.99. Data ARPU climbed 19% to $18.61.

Verizon exited the quarter with 101.1 million wireless customers. Net customer additions for the quarter were 0.9 million compared with 1.2 million in the year-ago quarter. Verizona�s subscriber growth plunged as the company struggles to compete with its major rival AT&T Inc. (NYSE: [ T ]) in the smart phone market.

Total retail customer base spiked 7.1% to 93.2 million from the year-ago quarter. Net retail post-paid subscriber additions for the quarter were 584,000.

Wireline: Revenue from wireline dipped 3.6% year over year to $10.3 billion due to continued declines across global wholesale and enterprise businesses. Total Broadband connection at the end of the third quarter was 8.3 million, up 2.7% year over year.

Momentum for the fiber-to-the-premises network (delivering FiOS services) remains strong, having already covered 15.4 million premises. During the quarter, Verizon added 204,000 and 226,000 new customers for its respective FiOS TV and FiOS Internet services, both representing a sequential increase. The company exited the quarter with 3.3 million (up 26.5%) FiOS TV customers and 3.9 million (up 23.9%) FiOS Internet customers.

The penetration rate of both FiOS Internet and FiOS TV surged to approximately 31% and 27.2%, respectively across all markets from the year-ago level of 28.7% and 25.1%. Total broadband and video revenue, including FiOS Internet, FiOS TV and HSI (DSL-based high-speed Internet) increased 20.8% year over year to $1.8 billion.

Our Analysis

We believe persistent erosion in access lines continues to hurt wireline revenues and margins as Verizon faces intense competition from cable companies and other alternative services providers. Further, high promotional and restructuring expenses may drag earnings and margins going forward.

Although Verizon continues to expand its 3G wireless and wireline FiOS network footprints, returns from investments in these businesses are highly uncertain. The fourth generation (4G) infrastructure may be an obstacle if other service providers shift to different generation technologies. Thus, we are maintaining our long-term Underperform recommendation on the stock.

For the short term (1-3 months), we are recommending a Hold rating with the Zacks Rank # 3. We believe the continuous investment in its broadband network, strong wireless and FiOS services, gaining share in the retail post-paid market and increasing penetration of smartphones and other data devices will provide positive cushion to the stock.

Further, Verizon is expected to launch 4G LTE (fourth-generation Long-Term Evolution) network in 38 markets by the end of 2010 and may start selling Apple Inc's (Nasdaq: [ AAPL ]) iPhone in January 2011.

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

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the [ Analyst Blog ] provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks [ "Profit from the Pros" ] e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting [ http://at.zacks.com/?id=7158 ].

About Zacks

Zacks.com is a property of [ Zacks Investment Research ], Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the [ Zacks Rank ], which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at [ http://at.zacks.com/?id=4582 ].

Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.

Join us on Facebook: [ http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts ]

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

N@N

Berkshire Hathaway, Universal Forest Products, Verizon, AT&T and Apple