|By PR Newswire||
|February 6, 2014 09:30 AM EST||
CHICAGO, Feb. 6, 2014 /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 the JPMorgan Chase & Co. (NYSE:JPM-Free Report), Wells Fargo & Company (NYSE:WFC-Free Report), Bank of America Corp. (NYSE:BAC-Free Report), Citigroup Inc. (NYSE:C-Free Report) and Manitowoc Company, Inc. (NYSE:MTW-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Reserve Releases: Bane or Boon for Banks?
The reduction in reserve releases has become a recurrent feature for bank earnings every quarter. This quarter was no different, with banks reducing their reserves for loans gone sour, which also has a significant positive impact on earnings.
What Are Reserve Releases?
Reserve releases are the cuts that banks make in the excess cash held to cover for losses incurred from bad loans. Such losses occur when banks are forced to write off loans which they believe cannot be recovered.
A reduction in the amount of reserves occurs when a bank writes off a larger amount of bad loans than the amount that it adds to its reserves. Banks are able to make such reductions primarily due to accounting guidelines relating to corporate governance which require banks to release such reserves at a time when they do not expect to need them.
Quantum of Reserve Releases
All the large U.S. banks have been benefited by reserve releases.JPMorgan Chase & Co. (NYSE:JPM-Free Report) and Wells Fargo & Company (NYSE:WFC-Free Report) have both grown their fourth quarter net income using reserve releases. Compared to the year ago quarter figure of $888 million, J.P Morgan's reserves set aside for covering bad debt increased to $1.3 billion in the fourth quarter.
Similarly, Wells Fargo increased its reserve releases to $600 million from the $250 million figure recorded a year earlier. Bank of America Corp. (NYSE:BAC-Free Report) also benefited from reserve releases of $1.2 billion, growing its fourth quarter earnings more than a billion over the last quarter.
Impact on Earnings
The reason why reserve releases continue to make news is the extent of the impact they have on earnings. Wells Fargo's experienced a fall in the top line, owing to lower non-interest income. Revenues for the year ended 2013 were $83.8 billion, which marked a year-over-year decrease of 2.7%.
For JP Morgan, managed net revenue of $24.1 billion in the quarter was down 1% from the year-ago quarter. Managed non-interest revenues were flat compared to the year-ago while net interest income fell 2% year over year to $11.1 billion. Though in this case, the top line remained steady, it is easy to conclude that in both cases, reserve releases have made a significant difference.
Citigroup Inc. (NYSE:C-Free Report) was one of the banks which posted disappointing results despite significant reserve releases. For fourth-quarter 2013, earnings per share came in at 82 cents, lagging the Zacks Consensus Estimate of 95 cents. Revenues came in at $17.8 billion for the quarter, down 1% from the prior-year quarter. This despite an increase in reserve releases to $670 million, compared to the figure of $91 million for the same period last year.
Pros and Cons
The critics of reserve releases claim that they serve to deflect from the actual performance of the bank. The fact that they make up a large portion of earnings fortifies the argument that they hide systemic weaknesses. Around 31% of JPM's earnings last year and 10% of WFC's earnings can be attributed to loan-loss reserves.
The contrarian view is that the reduction in such reserves releases real money for banks. This is perfectly justified since a resurgent economy and higher credit quality no longer require them to maintain a large amount of reserves.
As the economy stabilizes and credit conditions return to pre-crisis levels, the extent of reserve releases have been falling. Reserve releases have declined from the third quarter for both Wells Fargo and J.P Morgan. For the former, the figure has fallen from $900 million to $600 million and for the latter form $1.8 billion to $1.3 billion.
It seems that though the amount of reserve releases may continue to remain significant through the year. However, several market watchers believe that this year may be a turning point and releases will continue to decline. Banks can then go on to focus on what is clearly a bigger issue, performance.
Manitowoc Upgraded to Strong Buy
Why the Upgrade?
On Jan 30, 2014, Manitowoc reported fourth-quarter earnings per share of 47 cents, a 74% increase year over year helped by sound performance in the Foodservice segment, successful introduction of new products as well as the company's cost control initiatives. The bottom line beat the Zacks Consensus Estimate of 33 cents.
The upbeat earnings helped Manitowoc attain a new 52-week high of $29.39 on Jan 31, up from its previous high of $26.01. The share price gained 15% in a day and closed at $28.45 on Jan 31.
For 2014, Manitowoc expects modest top-line growth in Crane segment revenues. The company forecasts high single-digit improvement in operating margins in the Crane segment.
Crane utilization and rental rates continue to improve with demand. Going forward, demand from the wind sector as well as from oil and gas markets is expected to grow. Manitowoc remains optimistic regarding its new products, which include an array of technologically advanced products that will be launched at ConExpo, the premier construction-equipment trade show that is slated to be held in Mar 2014. This could be a catalyst for the Crane segment. A turnaround in the construction sector will also boost Crane sales.
Foodservice revenues are expected to rise in mid-single digits and the company expects high-teens gain in Foodservice segment margins. The segment will be benefit from new manufacturing facilities, restructuring initiatives and new products.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
Dec. 20, 2014 05:00 PM EST Reads: 1,126
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
Dec. 20, 2014 01:00 PM EST Reads: 1,110
ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ -- IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 12:00 PM EST Reads: 1,927
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Dec. 20, 2014 11:30 AM EST Reads: 2,367
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 11:00 AM EST Reads: 1,945
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
Dec. 20, 2014 11:00 AM EST Reads: 2,247
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
Dec. 20, 2014 10:45 AM EST Reads: 2,223
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Dec. 20, 2014 10:00 AM EST Reads: 2,006
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...
Dec. 20, 2014 10:00 AM EST Reads: 1,746
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
Dec. 20, 2014 09:00 AM EST Reads: 1,937
AppZero has announced that its award-winning application migration software is now fully qualified within the Microsoft Azure Certified program. AppZero has undergone extensive technical evaluation with Microsoft Corp., earning its designation as Microsoft Azure Certified. As a result of AppZero's work with Microsoft, customers are able to easily find, purchase and deploy AppZero from the Azure Marketplace. With just a few clicks, users have an Azure-based solution for moving applications to the...
Dec. 20, 2014 09:00 AM EST Reads: 959
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 08:00 AM EST Reads: 1,280
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada...
Dec. 20, 2014 07:00 AM EST Reads: 2,087
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...
Dec. 20, 2014 07:00 AM EST Reads: 1,868