The Zacks Analyst Blog Highlights: ConAgra Foods, H J HEINZ, BRF Brasil Foods,
Calpine and Alliant Energy
CHICAGO, Dec. 31, 2012
CHICAGO, Dec. 31, 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 ConAgra Foods Inc.(NYSE:CAG), H
J HEINZ CO. (NYSE:HNZ), BRF Brasil Foods(NYSE:BRFS), Calpine
Corporation(NYSE:CPN) and Alliant Energy Corporation(NYSE:LNT).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Friday's Analyst Blog:
Earnings Scorecard: ConAgra
ConAgra Foods Inc.(NYSE:CAG), a leading North American food company, reported
impressive fiscal second quarter 2013 (ended November 25, 2012) results. The
company saw a significant rise in the earnings due to improvements in the Lamb
Weston potato operations coupled with improved pricing. ConAgra, hopeful of
further improvement in the future, also increased its earnings outlook for
Let's take a brief look at the company's financials for the fiscal second
The manufacturer of branded and non-branded food posted a 16.3% increase year
over year in the earnings on a continuing basis, adjusted for comparability,
to settle down at 57 cents for the quarter. The results surpassed the Zacks
Consensus Estimate of 55 cents by 3.6%.
Revenue for the reported quarter improved 8.9% to $3,735.5 million from
$3,431.7 million in the year-earlier quarter. Results in the quarter were
driven by improved potato operations, moderating inflation and contribution
from acquired businesses. Revenue outshined the Zacks Consensus Estimate of
$3,691 million by 1.2%.
Agreement/Magnitude of Estimate Revisions
The recent quarter results along with the increase in guidance for fiscal 2013
by the management have triggered an estimate revision for the company in
either direction. In the last 7 days, of the 7 estimates for 2013, 5 were
revised upwards by the analysts covering the stock. However, out of the 12
estimates for 2014, 5 were revised upwards while 2 were lowered by the
analysts in the last 7 days.
For the fiscal third quarter of 2013, from a total of 11 estimates, there were
2 positive revisions.
As for magnitude of estimate revision, in the last 7 days, estimate for the
third quarter remained neutral at 55 cents. However, for 2013, estimates
increased from $2.06 to $2.09 along with an increase from $2.25 to $2.30 for
The Zacks Consensus Estimates represents a year-over-year growth of 7.3% for
third quarter, 13.6% for 2013 and 10.1% for 2014.
The company seems to have a bright future in the Consumer Foods segment,
following the acquisitions it has undertaken so far. The cost reduction
activities are in place, leading to the possibility of higher earnings. The
pending acquisition of Ralcorp Holdings Inc. is an added advantage, as it will
lead to cost synergies in the future. We continue to expect the company to
earn high revenues along with an increase in the earnings.
Currently, we maintain a Neutral recommendation on ConAgra Foods Inc. The
stock also bears a Zacks #2 (Buy) Rank, while its prime competitorsH J HEINZ
CO. (NYSE:HNZ) andBRF Brasil Foods(NYSE:BRFS) carry a Zacks #3 (Hold) Rank.
Calpine Closes Nat Gas Asset Sale
Wholesale utility play,Calpine Corporation(NYSE:CPN) closed its Broad River
Energy Center divestiture for an amount of $427 million plus adjustments
(roughly $504 per kilowatt) to Broad River Power LLC, an associate of Energy
Capital Partners LLC. Calpine received the go-ahead for the sale from the
Federal Energy Regulatory Commission ("FERC") on December 18, 2012.
The news of the divestment was earlier divulged during November 2012 at the
time of the company's third quarter earnings release. The Broad River Energy
Center, situated in Gaffney, South Carolina is an 847 megawatt simple-cycle,
natural gas-fired establishment.
Calpine has planned to realign its asset portfolio via a string of non-core
asset sales. The Broad River Energy sell off was made to complement Calpine's
$432 million acquisition of Bosque Power Plant, which happens to be a combined
cycle gas turbine ("CCGT") facility in Central Texas. The CCGT acquisition
will enable Calpine to achieve thermal efficiency of about 60% compared to a
simple cycle plant.
Followed by the Broad Energy sale, Calpine expects to earn $392 million from
the year-end divestment of its Riverside Energy Center in Wisconsin. The
company intends to plough back the proceeds from these sales for the
development of its high-return resources.
Other key initiatives include the company's development of the proposed 309
megawatt Garrison Energy Center, an energy-efficient natural gas based
facility in Dover, Delaware.
With natural gas becoming a hotshot energy source in the U.S. utility market,
we believe Calpine's purchase of high-quality gas units will certainly boost
the near-term earnings stream and bring future growth opportunities.
However, weather-induced demand volatilities leading to price fluctuations and
unplanned outages resulting from winter storms could act as negative catalysts
to growth. The Zacks Consensus Estimates for the fourth quarter and full year
2012 presently stand at a loss of 4 cents and earnings of 43 cents per share,
Another utility player,Alliant Energy Corporation(NYSE:LNT) is also eyeing
to enhance its natural gas prospects. The company recently sought regulatory
approval for the planned building of a 650 megawatt Marshalltown Generating
Station ("MGS") with the Iowa Utilities Board.
With a market capitalization of $8.38 billion, Texas-based Calpine Corp. has
2,101 employees in total. It owns and operates natural gas-fired and
geothermal power plants in North America and currently retains a short-term
Zacks #3 Rank (Hold rating).
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