The Zacks Analyst Blog Highlights: General Motors, Hewlett-Packard, Ford
Motor, FedEx and United Parcel
CHICAGO, Oct. 30, 2012
CHICAGO, Oct. 30, 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 General Motors Company (NYSE:GM),
Hewlett-Packard Company (NYSE:HPQ), Ford Motor Co. (NYSE:F), FedEx Corporation
(NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
General Motors Inks Deal with HP
General Motors Company (NYSE:GM) recently announced the signing of new
multi-year project services and software contracts with Hewlett-Packard
Company (NYSE:HPQ). This new move will enhance General Motors' growth in IT
transformation and will support the delivery of global services and products
to its business partners, and reduce costs involved in the ongoing IT
General Motors plans to hire up to 3,000 Hewlett-Packard employees, who are
already engaged in the company's projects, to further improve the software
deployed by the company.
General Motors primarily outsources most of its IT work. But the company now
plans to reverse the situation and bring innovation and development in its IT
segment. The company plans to hire workers devoted to innovations rather than
operations at four new technology centers in Austin, Texas, and Warren and
Michigan, over the next three to five years.
General Motors, in the second quarter of 2012, registered a 41% decline in its
profit to $1.49 billion or 90 cents per share from $2.52 billion or $1.54 in
the corresponding quarter of 2011. Nevertheless, the earnings per share
exceeded the Zacks Consensus Estimate by 15 cents.
Total revenues fell 4.5% year over year to $37.60 billion in the quarter,
missing the Zacks Consensus Estimate of $37.98 billion. The decline in the
profit and revenues was attributable to strengthening of the U.S. dollar
against most of the major currencies as well as weak macroeconomic conditions
globally, especially in Europe and South America.
Detroit, Michigan-based General Motors is the largest automobile manufacturer
in the world. However, like its competitor Ford Motor Co. (NYSE:F), the
company's significant exposure to troubled Europe has adversely affected its
operations in the continent.
Currently, General Motors retains a Zacks #3 Rank, which translates into a
short-term Hold rating. We have a long-term Neutral recommendation on the
FedEx Intros New Expansion Plans
FedEx Corporation (NYSE:FDX), a leading U.S. package delivery company, is
expanding its services across U.S., Canada and Mexico. The company aims to tap
a potential business opportunity in NAFTA (North American Free Trade
agreement) markets through its expansion plans.
The company is expanding its Priority next-day services in its FedEx Freight
segment by opening a new service centre in Rochester, New York. The new
service centre will cater to 13 U.S. and Canadian markets dealing in cross
border shipments to and from Toronto and Montreal.
In Mexico, the company added two new service centers – one each in Culiacán
and Silao. By introducing these two centers, FedEx would strengthen its
freight network in northwestern and north central part of Mexico. Further, in
its Freight segment, management intends to invest in technology to upgrade
network and equipment and automation planning in order to enhance customer
FedEx' other improvement plans include productivity enhancements in the Ground
segment like automation of the planning and execution of free load and pickup
and delivery processes. The segment's trailers are also expected to be
equipped with GPS devices to improve fleet management.
We believe near-term earnings growth will be aided by increasing profitability
in Freight coupled with continued growth in the Ground segment. Additionally,
improving international revenues and operational efficiency in FedEx Express
will also support earnings going forward.
FedEx is boosting its international business through substantial investments
to enhance its existing routes and make strategic acquisitions. The company is
building a new hub in Guangzhou, China, for catering to100 new Chinese cities
within the next five years. Recently, the company announced to invest $100
million in China in order to strengthen its competitive position in the
Chinese markets against its rival –United Parcel Service, Inc. (NYSE:UPS)
As for acquisitions, the company completed the takeover of Polish courier
Company Opek Sp. z o.o. in June this year and French B2B Express
transportation company, TATEX in July.
Following this, the company acquired Rapidão Cometa, a Brazilian
transportation and logistics company. We believe the investments in organic
growth as well as acquisitions will lead to greater operational efficiencies,
providing a competitive edge, generating significant long-term synergies,
supporting international business growth, and driving higher profitability.
The stock currently has a Zacks #3 Rank, implying a short-term Hold rating.
For the long-term, we have an Underperform recommendation on FedEx.
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