The Zacks Analyst Blog Highlights:Microsoft, J. C. Penney, Apple, Google and Companhia de Saneamento Basico do Estado de Sao

 The Zacks Analyst Blog Highlights:Microsoft, J. C. Penney, Apple, Google and
            Companhia de Saneamento Basico do Estado de Sao Paulo

PR Newswire

CHICAGO, April 1, 2013

CHICAGO, April 1, 2013 /PRNewswire/ 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 Microsoft Corp. (Nasdaq:MSFT), J.
C. Penney Company Inc. (NYSE:JCP), Apple (Nasdaq:AAPL), Google (Nasdaq:GOOG)
and Companhia de Saneamento Basico do Estado de Sao Paulo, or SABESP


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Here are highlights from Thursday's Analyst Blog:

MS Office 365 Uptake Continues

The world's largest software makerMicrosoft Corp. (Nasdaq:MSFT) is seeing
success in the government and education sectors. Its Office 365 suite won
eight customers including the City of Kansas City, Mo; the City of Seattle;
Dupage County, the University of Miami; the University of Colorado, and King
County, Wash among others.

The suite won on different counts at these players. While the Kansas City
government and the City of Seattle chose the solution to increase operational
efficiency, reduce IT costs and lower carbon footprint , the University of
Miami chose it to serve as a common platform of communication for its 40,000
odd students. The Miller School of Medicine's adoption of cloud services makes
sense as it is situated in an annual hurricane zone. The adoption of the
service will ensure business continuity even in the face of adverse

The Office 365 suite equips these organizations with advanced technologies,
thereby improving operational efficiency and resource allocation. It also
facilitates communication and collaboration among organizations and at the
same time reduces IT expenses of government and education organizations and
their partners across the world.

Office 365 is sold as a service and therefore generates ongoing revenues for
Microsoft instead of a one-time licensing fee. Launched in 2011, the new
Office comes with the traditional word processing, spreadsheets and email

Microsoft's Office 365 is gaining traction in the market as it recently
launched its online version focusing on touch devices. Further, it is being
deployed at the stores of retailers such as J. C. Penney Company Inc.
(NYSE:JCP) and U.K.-based Tesco as well as government departments such as the
Texas Department of Information Resources, which chose the software for
inter-departmental activities. The latest to join the bandwagon is the
International Federation of Red Cross and Red Crescent Societies (IFRC), which
also signed a MoU with Microsoft. Further, Microsoft's software expanded in
the healthcare sector. It also launched a specialized version for businesses
as well as for student communities.

Currently, just like other PC makers, Microsoft is also battling the slump in
the PC market caused by the sluggish economy. In addition, the popularity of
smartphones and tablets from Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG) are
cannibalizing PC market sales, further deteriorating the scenario. Whether it
can come out of the slump on the back of its new software and OS is a wait
and-see game.

According to research conducted by IDC, cloud-based services may grow into a
$100.0 billion market by 2016, representing a compound annual growth rate
(CAGR) of 26.0%. Cloud services are expected to drive growth in IT going
forward, generating 41.0% of overall growth in IT by 2016. Thus, the
strengthening of Microsoft's position in the segment is encouraging as the PC
market is showing no signs of revival in the near future.

Microsoft reported revenues, excluding deferrals, of $21.46 billion in the
second quarter of fiscal 2013, which were up 34.0% sequentially and 2.7% from
last year, in line with our estimates. All except the Entertainment & Devices
segment grew both sequentially and from the year-ago quarter. Entertainment &
Devices were down year over year.

Microsoft has a Zacks Rank #3 (Hold).

SABESP Upped to Strong Buy

Zacks Investment Research upgraded Companhia de Saneamento Basico do Estado de
Sao Paulo, or SABESP (NYSE:SBS) to a Zacks Rank #1 (Strong Buy) on Mar 27,
2013. The company is a Brazil-based water and sewage service provider and
currently has a market capitalization of $10.7 billion.

Why the Upgrade?

Financial results for the year 2012 posted by SABESP on Mar 21, 2013 were
impressive. The company's earnings per share, as reported by SABESP, were
R$8.39, up 56.2% year over year. In ADR terms, earnings came in at
US$8.61.Net revenue in the year inched up 8.2% to R$10.8 billion (US$5.5
billion) on the back of higher water supply, sewage collection and treatment,
and construction revenue. Billed water and sewage volume rose 2.7% year over
year. Water volume produced increased 2.2%; water connections crept up 2.6%
and sewage connections rose 3.5%.

SABESP reported declines in cost and expenses in 2012. As a percentage of
revenue, cost of sales and services plummeted 60 basis points to 60.1%. Gross
margin came in at 39.9%. Operating expenses, including selling, administrative
and other expenses declined 7.2% year over year and represented 13.4% of the
total revenue.

Solid financial results in 2012 and positive earnings surprise in two out of
four trailing quarters, with an average of +11.5%, have raised our optimism
for better results in the years ahead for SABESP. In the last 7 days, the
Zacks Consensus Estimate for 2013 went up by 8.9% to US$4.54 per ADR while
that for 2014 increased 19.9% to US$5.18 per ADR. Also, we have an Earnings
ESP (Read: Zacks Earnings ESP: A Better Method) of +7.7% for 2013.

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