The Zacks Analyst Blog Highlights:BCE, Gap, L Brands, Stein Mart and Fred's

 The Zacks Analyst Blog Highlights:BCE, Gap, L Brands, Stein Mart and Fred's

PR Newswire

CHICAGO, Aug. 13, 2013

CHICAGO, Aug. 13, 2013 /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  theBCE Inc.(NYSE:BCE-Free
Report), Gap Inc.(NYSE:GPS-Free Report), L Brands, Inc. (NYSE:LTD-Free
Report),Stein Mart Inc.(Nasdaq:SMRT-Free Report) andFred's,
Inc.(Nasdaq:FRED-Free Report).

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

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

Here are highlights from Monday's Analyst Blog:

BCE Lags Q2 Earnings, Tops Rev

Canada's leading telephone operator,BCE Inc.(NYSE:BCE-Free Report), reported
second-quarter 2013 adjusted earnings of 73 cents per share (77 Canadian
cents) missing the Zacks Consensus Estimate of 75 cents. The results
deteriorated 24% from 96 cents per ADS (97 Canadian cents) in the year-ago
quarter. The decline in earnings is mainly attributable to the higher value of
uncertain tax position and increased interest expenses related to the
financing of the Astral acquisition.

Revenues increased 1.5% year over year to $4.88 billion (C$5.00 billion) and
ahead of the Zacks Consensus Estimate of $4.78 billion. The strong performance
was backed by strength in the Wireless, TV, Internet and business service
segments plus a reduction in wireline voice erosion.

EBITDA grew 1.1% year over year to C$2.06 billion ($2.01 billion) in the
reported quarter supported by strong contributions from the Wireless and Media
units.

Revenue Segments

Bell Wireless: Revenues from Bell Wireless increased 5.4% year over year to
C$1.44 billion ($1.41 billion). Service revenues were up 6.1%, (resulting from
postpaid subscriber growth and increased usage of data services) and product
revenues were up 2.9%, which aided the revenue growth.

BCE's net wireless subscribers during the reported quarter stood at 7.86
million, up 3.5% year over year. Post-paid net additions increased by 2.7% or
96,390, while prepaid net losses improved 3.7% or 52,824. Blended ARPU
(average revenue per user) rose 2.7% year over year to C$56.85 ($55.56) on the
back of higher proportion of postpaid customers in the total wireless
subscriber base in addition to more customers opting for mobile data services.

Churn rate (customer switch) improved to 1.6% from 1.7% in the year-ago
quarter. Post-paid churn remained unchanged at 1.3% as compared with the
year-ago quarter due to continuous investments in customer service and
retention. Prepaid churn also remained unchanged at 3.7% as compared to the
year-earlier period.

Bell Wireline: Revenues fell 0.9% year over year to C$2.51 billion ($2.45
billion) due to lower local and access (down 7.1%), long distance (down 11.2%)
and equipment and other revenues (down 4.7%). Data revenues increased
marginally 4.0% to C$1.45 billion ($1.42 billion) owing to Fibe customer
growth, increased IP-based broadband connections revenues and better data
product sales.

Network access services (NAS) fell 7.7% year over year to 5.42 million.
Residential NAS losses improved 11.8% or 11,029 in the second quarter of 2012.
Business NAS losses improved 15.3% or 5,206 in the reported quarter.

BCE activated 3,901 high-speed Internet customers compared with a net loss of
664 customers in the year-ago period. Bell FibeTV subscribers at the end of
the second quarter were 346,316 versus 158,324 million in the year-ago
quarter. At the end of the second quarter, total TV subscribers grew 5.3% year
over year to 2.37 million.

Bell Media: Bell Media generated revenues of C$559.0 million ($546.4 million),
up 4.7% year over year. The growth is attributed to strong advertising and
increase in speciality TV rates.

Bell Aliant: Revenues from this segment inched up 0.6% year over year to
C$691.0 million ($675.0 million) based on increased growth in data, which was
offset by continuous decline in local and access, long distance and equipment
and Other revenues.

Astral Acquisition Completed

On July 5, 2013, Bell Media completed the acquisition of Montreal-based Astral
Media for $3.27 billion. Bell Media now holds 25 television stations,
including the very popular, The Movie Network and French language pay-TV
service, Super Ecran. Bell Media will also hold 77 radio stations including
top brands like NRJ, Rouge fm, Virgin Radio among others. Apart from enhancing
Bell's presence in Quebec, the acquisition provides Bell's customers with
various programming options.

Liquidity

BCE exited the quarter with C$2,208.0 million (approximately $2,158.1 million)
of cash and cash equivalents compared with C$129.0 million (approximately
$128.0 million) as of December 31, 2012. Capital expenditures were C$830.0
million ($811.2 million), down 12.8% year over year.

Dividend

The company's board of directors declared a quarterly dividend of 58.25
Canadian cents per share, payable on Oct 15, 2013 to shareholders of record on
Sep 16, 2013.

Our Take

BCE currently retains a Zacks Rank #3 (Hold). The company displays a robust
wireless business model, improving wireline operations and expanding
activities in the media sector. We believe that the company's focus on
investing in broadband networks and rendering better services, supported by a
competitive cost structure will deliver positive results, going forward.
However, stiff competition, continued decline in network access services,
constant need to invest in technology and union issues remain the primary
concerns for the company.

Gap's July Comps Rise

Gap Inc.(NYSE:GPS-Free Report) posted comparable-store sales (comps) increase
of 1% for the 4 weeks ended Aug 3, 2013 compared with a rise of 10% for the 4
weeks ended Aug 4, 2012. This was below the analysts' expectations. The
marginal increase came on the back of sturdy performance at the Gap global
brand. However, Banana Republic and Old Navy Global failed to produce the
desired results.

Net sales in July totaled $1.12 billion, up 5% from sales of $1.06 billion for
the 4-week period ended on Jul 28, 2012.

Brand-wise, comps performances at Gap Global were up 7% compared with a 10%
increase in the prior-year period, while comps at Banana Republic were down 1%
compared with an 8% rise recorded last year. Old Navy's comps decreased 5%
versus a 12% increase last year.

For the second quarter of fiscal 2013, the company's net sales increased 8% to
$3.87 billion from $3.58 billion in the prior-year period. During the quarter,
comps rose 5% compared with a 4% increase in the year-ago quarter.

Brand-wise, second-quarter comps at Gap Global increased 6% compared with a 3%
rise in the prior-year period, while comps at Banana Republic Global fell 1%
compared with a 6% rise last year. Old Navy Global's comps rose 6% versus a 3%
increase last year.

Based on strong sales results, the company expects second-quarter earnings per
share in the range of 62–64 cents, compared with 49 cents reported in the
year-ago quarter. The Zacks Consensus Estimate stands at 64 cents.

Apart from Gap, other retail chains that posted comparable-store sales data
for the month of July includeL Brands, Inc. (NYSE:LTD-Free Report).,Stein
Mart Inc.(Nasdaq:SMRT-Free Report) andFred's, Inc.(Nasdaq:FRED-Free
Report). While L Brands registered comps growth of 3%, off-price retailer of
apparel, footwear and accessories Stein Mart delivered comparable-store sales
growth of 3.7%, and discount store operator Fred's, Inc. registered a 2.5%
rise in comps.

In July, there were mixed comparable-store sales results for retailers, who
tried every means to attract budget-conscious customers with discounts. Going
forward, analysts believe that the back-to-school season, an important one
before the holidays, may be a tough one for retailers. Recent data from the
Conference Board suggested that Consumer Confidence Index fell to 80.3 in Jul
2013 from 82.1 in Jun 2013.

Gap currently carries a Zacks Rank #2 (Buy) and is scheduled to release its
August sales results on Sep 5, 2013.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

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