Business & Finance
Business and Finance
Business and Finance
Tue, December 21, 2010 Progressive Corp., Allstate Corporation, Citrix Systems, VMWare and Microsoft
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Progressive Corp. (NYSE: [ PGR ]), Allstate Corporation (NYSE: [ ALL ]), Citrix Systems Inc. (Nasdaq: [ CTXS ]), VMWare Inc. (NYSE: [ VMW ]) and Microsoft Corp. (Nasdaq: [ MSFT ]).
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Here are highlights from Mondaya™s Analyst Blog:
Progressive Beats in November
Progressive Corp.'s (NYSE: [ PGR ]) earnings per share for November 2010 were 17 cents, up 42% from 12 cents in November 2009. Results of the reported month also increased 42% over October 2010. Net income for the month improved 37% to $109.9 million from $80.0 million in the year-ago period. On a sequential basis, net income improved 44% from $81.9 million in the previous month.
Progressive reports its results every month. The company recorded net premiums of $1.01 billion, up 7% from $942 million in November 2009 but down 24% from $1.34 billion in October 2010. Net premiums earned were $1.11 billion, up 5% from $1.06 billion in the year-ago period but down 20% from $1.39 billion in the prior month.
Progressive reported net realized gain on securities of $29.4 million, compared with $6.1 million in November 2009 and $25.6 million in the preceding month. The combined ratio a' the percentage of premiums paid out as claims and expenses a' at 90.7% improved 150 basis points from 92.2% recorded in the year-ago period and 520 basis points from 95.9% in the preceding month.
Allstate Corporation (NYSE: [ ALL ]), which competes with Progressive, registered third quarter operating earnings of 83 cents per share, way behind the Zacks Consensus Estimate of 97 cents and 99 cents recorded in the year-ago quarter. Results for the quarter deteriorated primarily due to lower-than-expected premiums coupled with higher expenses in the Property-Liability insurance segment, along with relatively higher tax expenses.
We maintain our Neutral recommendation on Progressive. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.
Citrix to Expand Globally
Citrix Systems Inc. (Nasdaq: [ CTXS ]) is focusing on international expansion to augment its global market share in the virtualization, collaboration and cloud computing segments. Recently, the company entered into a definite agreement to acquire Netviewer AG of Germany.
Netviewer is a privately held Software-as-a-Service solutions provider. This deal is expected to be closed by early 2011 although the financial terms are still undisclosed.
Netviewer has more than 18,000 customers across several European countries such as the UK, France, Germany, Switzerland, Austria, Benelux, Italy, Spain and various Nordic countries. The acquisition of Netviewer will allow Citrix to significantly expand its presence in Europe.
Citrix will integrate Netviewer in its Online Services division. Citrix Online Services segment consists primarily of fees related to online service agreements and are recognized ratably over the contract term and generates approximately 20% of the companya™s total revenue.
Citrix is reaping the benefits of globalization as well as the growing popularity of the virtual office concept. To maximize profit, business enterprises continue to enter markets all over the world. Virtualization and cloud computing has become one of the most effective tools to slash costs as enterprises expand.
We believe Netviewer acquisition will help Citrix to compensate some of its losses in the server virtualization market. The server virtualization market is intensely challenging and is increasingly becoming commoditized. Citrix entered server virtualization market two years ago with the acquisition of XenSource. However, the company could hardly establish a foothold in this segment and is gradually losing market share to both VMWare Inc. (NYSE: [ VMW ]) and Microsoft Corp. (Nasdaq: [ MSFT ]).
We maintain our long-term Neutral recommendation for Citrix. Currently, it is a Zacks #3 (Hold) Rank stock.
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