The Zacks Analyst Blog Highlights: VeriSign, Symantec, Leap Wireless International, Wireless International, America Movil and MetroPCS
CHICAGO, Sept. 12, 2011 /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: VeriSign, Inc. (Nasdaq: VRSN), Symantec Corp. (Nasdaq: SYMC), Leap Wireless International Inc. (Nasdaq: LEAP), America Movil (NYSE: AMX) and MetroPCS (NYSE: PCS).
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Here are highlights from Friday’s Analyst Blog:
VeriSign CFO Stepping Down
VeriSign, Inc. (Nasdaq: VRSN) recently announced that the Executive Vice President and Chief Financial Officer (CFO) Brian Robins resigned from his positions effective September 7, 2011 to pursue other opportunities.
VeriSign, however, reaffirmed its guidance for 2011 and stated that the resignation would not have an adverse impact on the company’s financial statements or the results of its operations.
VeriSign stated that the company will soon name an interim CFO. The news led to an 8.14% decline in the stock price in after-hours trading, which closed at $31.15%. In regular trading, the stock was down 1.71%.
The day before, VeriSign’s stock price gained 7.61% in regular trading amid speculations of a possible takeover.
Earlier, Mark McLaughlin resigned as President and Chief Executive Officer (CEO) effective August 1, 2011. Jim Bidzos, Verisign’s founder and former CEO has taken over.
VeriSign has been restructuring its business since 2007. VeriSign decided to focus its attention on its core competencies to provide highly scaleable, reliable and secure Internet infrastructure services to customers around the world. Hence, the company divested a number of non-core businesses in its portfolio, such as communications, billing and commerce, content delivery, messaging and enterprise security services.
Most recently, the company sold its Authentication Services business to Symantec Corp. (Nasdaq: SYMC) following the sale, continuing operations primarily consist of Naming Services (comprising Registry Services and Network Intelligence and Availability (NIA) Services).
It remains to be seen how the business shapes up with the departure of the management team who were primarily responsible for streamlining the company.
VeriSign expects revenues between $765 million and $775 million in 2011, up 12% to 14% year over year and up from the earlier guidance of a growth of 11% – 14%. Excluding one-time items and stock based compensation expenses; gross margin is projected at around 79%.
Leap’s “Muve” on Samsung Vitality
Leap Wireless International Inc. (Nasdaq: LEAP), a leading provider of digital wireless communication services in the U.S. primarily through its wholly-owned subsidiary Cricket Communications Inc. (popularly known as “Cricket”), plans to offer its popular “Muve Music” service on Samsung’s new Android-based smartphone called “Samsung Vitality.”
Earlier, Leap Wireless introduced their unlimited music download facilities for its 3G wireless subscribers. The new digital music service is called “Muve Music” and is presently offering to all its existing markets.
Continuous launch of smartphones coupled with its unlimited music download facility, has placed the company just behind Rhapsody, another online music service provider with 800000 subscribers, may act as positive catalyst for growth.
Despite such positive traits, we remain cautious about Leap Wireless as it faces intense competition from other carriers like America Movil’s (NYSE: AMX) Tracfone and MetroPCS (NYSE: PCS), which also offers such attractive plans. Furthermore, given the company’s huge debt and poor financial results in the last quarter, we prefer to remain on the sidelines.
We, thus, maintain our long-term Neutral recommendation for Leap Wireless International Inc. Currently, Leap Wireless International Inc has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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