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The Zacks Analyst Blog Highlights: Agilent Technologies, STMicroelectronics, Forest Laboratories, Ironwood Pharmaceuticals and



 The Zacks Analyst Blog Highlights: Agilent Technologies, STMicroelectronics,
  Forest Laboratories, Ironwood Pharmaceuticals and ITT Educational Services

PR Newswire

CHICAGO, Oct. 29, 2012

CHICAGO, Oct. 29, 2012 /PRNewswire/ -- 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 Agilent Technologies Inc.
(NYSE:A), STMicroelectronics NV (NYSE:STM), Forest Laboratories (NYSE:FRX),
Ironwood Pharmaceuticals (Nasdaq:IRWD) and ITT Educational Services, Inc.'s
(NYSE:ESI).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit
from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday's Analyst Blog:

Agilent to Showcase New EMPro 2012

Agilent Technologies Inc. (NYSE:A) will demonstrate the latest version of its
flagship EMPro 2012 software at European Microwave Week.

Agilent's EMPro 2012 will facilitate the designing of 3-D models by analyzing
the electrical performance of radio frequency (RF) and other high-speed
components. The latest EMPro coupled with Agilent's Advanced Design System
(ADS) software has the capabilities to improve performance and accelerate
product development with the help of 3-D modeling.

Aerospace/Defense industry engineers and designers of antenna, high-speed
connector, RF & microwave component, IC package and others use the EMPro 2012
software for analyzing the 3D electromagnetic (EM) effects of components such
as RF IC packages, antennas, on-chip and off-chip embedded passives and
printed circuit board (PCB) interconnects.

Simultaneously, STMicroelectronics NV (NYSE:STM) has selected Agilent's EMPro
2012 software to develop their ESD structures. This will prove to be
beneficial for Agilent going forward.

There is ample room for growth if Agilent plays to its strength and remains
committed to its customers by providing world class, affordable test and
measurement solutions. Agilent's testing systems have proved to be effective
in the past, enabling it to build a strong position for itself.

Agilent's revenue in the third quarter was flat sequentially and up 1.9% year
over year, short of management's expectations of a 2-3% sequential increase
($1.77 billion to $1.79 billion). The Electronic Measurement segment
contributed 49.0% of revenue. The weakness was on the computing/semiconductor
side of the business.

The Life Sciences segment generated 23.0% of revenue, down 1.0% sequentially
and up 2.1% from last year. The Chemical Analysis segment generated 22.0% of
third quarter revenue, down 8.8% sequentially and 7.0% year over year. The
sequential decline was largely because of weakness in food testing.

Currently, Agilent Technologies has a Zacks #4 Rank, implying a short-term
Sell rating.

Earnings Scorecard: Forest Labs

Following the release of second quarter fiscal 2013 results, most of the
analysts providing earnings estimates for Forest Laboratories (NYSE:FRX) have
made downward revisions to their estimates for fiscal 2013. The downward
revision in estimates is mainly in response to the company's lowered guidance
for fiscal 2013.

Second Quarter Fiscal 2013 Quarter Highlights

Forest Labs reported earnings per share of 8 cents in the second quarter of
fiscal 2013, well below the year-earlier earnings of 91 cents per share.
Results were hit by the loss of exclusivity on Lexapro.

Excluding acquisition-related amortization costs, second quarter fiscal 2013
earnings came in at 15 cents, down from 95 cents in the year-ago quarter. The
Zacks Consensus Estimate was hinting towards breakeven earnings.

Second quarter revenues declined 34.9% to $760.6 million, with net sales
falling 38.8% to $692.0 million. Total revenues missed the Zacks Consensus
Estimate of $779 million.

A detailed discussion of second quarter fiscal 2013 results is available here:
Earnings Decline at Forest Labs

Agreement of Estimate Revisions

There is a significant negative bias in earnings estimate revisions for Forest
Labs for fiscal 2013. Following the release of second quarter fiscal 2013
results, all 12 analysts providing estimates for the stock lowered their
estimates for fiscal 2013.

A similar trend is seen for fiscal 2014 as well with 19 of the 22 analysts
providing estimates cutting their estimates with no movement in the opposite
direction.

Forest Labs expects to earn 45 - 60 cents per share (excluding
acquisition-related amortization), down from the earlier guidance of 95 cents
- $1.10 per share.

With the entry of generic competition, Lexapro sales will continue declining.
In addition to lower Lexapro sales, other factors expected to affect sales are
lower than expected royalty income and the discontinuation of shipping of
Levothroid.

However, more than the Lexapro impact, we were disappointed to see Forest Labs
cut its revenue expectations for Namenda. The company now expects Namenda
sales to grow 11% in fiscal 2013 instead of 17%. This means that Namenda s
sales will be affected by about $85 million.

Forest Labs said that although sales in the retail segment were in line with
expectations, long term care sales were below expectations. Long term care
sales account for 35-40% of the company's Namenda sales.

Meanwhile, Linzess, which gained FDA approval in August for the treatment
(once-daily) of adults suffering from irritable bowel syndrome with
constipation (IBS-C) or chronic idiopathic constipation (CIC), is expected to
deliver sales of $25 million instead of $60 million.

The reduced forecast reflects a delay in the product launch due to the
three-month extension of the FDA review period. Linzess is partnered with
Ironwood Pharmaceuticals (Nasdaq:IRWD).

Magnitude of Revisions

Estimates for fiscal 2013 have gone down by 43 cents following the release of
second quarter fiscal 2013 results. The current Zacks Consensus Estimate is 25
cents. Fiscal 2014 estimates have been slashed by 28 cents to $1.27 per share.
The reduction in fiscal 2014 estimates mainly reflects reduced expectations
from Namenda.

Our Recommendation

We currently have a Neutral recommendation on Forest Labs, which carries a
Zacks #3 Rank (short-term Hold rating). Forest Labs is facing tough times with
Lexapro losing patent protection.

More than Lexapro's genericization, the cut in Namenda's guidance is
disappointing as Namenda is currently the main contributor to the Forest Labs'
top line. Moreover, the performance of new products especially Teflaro, has
been below expectations. However, we remain encouraged by Forest Labs'
progress with its pipeline candidates.

ITT Educational's Weak Environment

ITT Educational Services, Inc.'s (NYSE:ESI) third quarter 2012 earnings of
$1.83 per share beat the Zacks Consensus Estimate of $1.75 by 4.6%. However,
earnings for the quarter dropped 26.2% year over year due to lower
revenue.                       

Quarterly revenue totaled $314.7 million, down 12.7% from the prior-year
quarter due to weak enrollments. Total revenue also missed the Zacks Consensus
Estimate of $316 million.

Quarter in Detail

The company witnessed a 17.1% year-over-year decline in total enrollment to
65,662 students. The overall decline in enrollment mainly resulted from a
15.8% drop in new enrollment to 19,298 students. New student enrollment
witnessed a decline of 36% in Graphic Designs and criminal justice programs
and a 12% drop in the drafting, network administration and electronics
programs.

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