The Zacks Analyst Blog Highlights: E. I. Du Pont de Nemours and Company, Credit Suisse Group, The Dow Chemical, BASF SE and Pepsi
CHICAGO, Feb. 14, 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 E. I. Du Pont de Nemours and Company (NYSE: DD), Credit Suisse Group (NYSE: CS), The Dow Chemical Company (NYSE: DOW), BASF SE (OTC: BASFY) and Pepsi Inc. (NYSE: PEP).
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Here are highlights from Monday’s Analyst Blog:
DuPont to Sell Car Paints Biz
According to industrial sources, chemical giant E. I. Du Pont de Nemours and Company (NYSE: DD) has launched the sale process of its car paints business, which could bring in more than $4 billion.
The sources further reported that the sale will pull the interests of the private equity players. The private parties believe that they can cut costs easily so that the unit can reap more profits. Other chemical companies may also be interested in the sale, as per the reports.
DuPont’s adviser on the deal, Credit Suisse Group (NYSE: CS), sent financial documents/details to potentially interested parties related to the sale.
DuPont’s Coatings business reported sales of $1.1 billion in the fourth quarter of 2011. Despite soft demand for consumer electronics segment and weak markets for housing and construction, DuPont delivered exceptional results for full-year 2011.
The company reported earnings of 35 cents per share in the fourth quarter of 2011 compared with 50 cents in the year-ago quarter. The profit exceeded the Zacks Consensus Estimate of 33 cents per share.
A higher tax rate in the quarter led to the year-over-year decline in profit. Further, higher selling prices during the quarter was offset by increased spending on selling, marketing and research and development, higher costs for raw materials, energy and freight as well as lower sales volumes.
For full-year 2011, the company reported earnings of $3.93 per share, up 20% from $3.28 per share in 2010, exceeding the Zacks Consensus Estimate by a penny.
Sales in the quarter grew 14% to $8.4 billion due to 14% increase in prices and higher agriculture segment sales. However, the quarter witnessed declining sales volumes due to destocking in photovoltaics, polymer and industrial supply chains. The consumer electronics and construction division also faced soft demand. For fiscal year 2011, sales jumped by 20% to $38.0 billion.
We believe that the slowdown in global economic growth in the fourth quarter will continue in the first quarter of 2012, gradually improving in the second half of 2012. The company also faces stiff competition from The Dow Chemical Company (NYSE: DOW) and BASF SE (OTC: BASFY).
However, markets for DuPont’s agriculture and food businesses continue to be strong, especially with a strong planting season in Latin America. Therefore, the company retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating and we have recommended the shares of the company as Neutral for the long-term (more than 6 months).
Venezuela Takes On Pepsi
In an effort to look into complains of abnormal price rise, the Venezuelan government has pulled up beverage giant Pepsi Inc.’s (NYSE: PEP) local arm Pepsi-Cola Venezuela.
Pepsi Cola Venezuela, which is a joint venture between Pepsi and the country’s largest foodmaker, Empresas Polar, has been accused of hiking bottled mineral water prices, selling water at a price which was higher than the ceiling provided by the government of Venezuela.
Government has send an order by e-mail to the company, stating that it should submit the receipts for the November-to-January period within four days, showing how much it has been charging for the water. Government requires Pepsi to charge 45.86% lower than the existing rate of $5.35 for their bottled water.
Alarmed by an inflation rate of of 22.7% – the highest in Latin America – the Venezuelan government late last year froze the prices of 19 personal care items ranging from toothpaste to deodorant until mid-January, to prevent monopolies from “ransacking the people.”
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