For Immediate Release
Chicago, IL – April 16, 2012 – 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 Corning Inc. ( GLW),
Becton, Dickinson & Co. ( BDX),
3M Company ( MMM), Tyco Electronics,
Ltd. ( TEL) and DFC Global (
DLLR).
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Here are highlights from Friday’s Analyst
Blog:
Corning to Boost Life Sciences
Portfolio
Corning Inc. ( GLW) announced that it has
entered into an agreement with Becton, Dickinson &
Co. ( BDX) to buy a major portion of its Discovery
Labware unit for about $730 million in cash. The acquisition is
expected to be completed later this year, depending on certain
customary closing conditions, including receipt of regulatory
approvals.
The Discovery Labware unit has operations in Massachusetts,
North Carolina, and the United Kingdom, and boasts of extensive
dealer networks in Asia, Europeand North America.
Upon the closing of the acquisition, Corning will integrate four
of the Discovery Labware unit's main product platforms into
Corning's Life Sciences segment. These product platforms include
plastic consumable labware, liquid-handling products, cell-based
assays and cell cultureware, as well as ADME research.
The company said that the acquisition will enhance Corning’s
broad portfolio of life sciences products and expand its annual
revenues by 40%. In the fourth quarter, Corning’s Life Sciences
business accounted for around 8% of revenue, which was down 6.5%
sequentially but up 2.1% from a year ago.
The deal will help Corning to expand its global market share and
benefit from the Discovery Labware unit's extensive product
portfolio and established dealer network. In December last year,
Corning acquired Mediatech, which was also integrated into
Corning's Life Sciences segment to augment its sales.
Corning’s innovations, technologies and acquisitions help it to
deliver improved results and maintain its position in an
increasingly competitive market. Corning delivered a decent fourth
quarter, beating the Zacks Consensus Estimates by 8 cents or 26.5%.
Corning is set to report its first quarter 2012 earnings on April
27, and expects the Life Sciences business to be up 10%
sequentially.
Corning does not expect the acquisition to have any impact on
its 2012 financials, but believes that the transaction will be
slightly accretive in 2013. Additionally, the company stated that
the acquisition will aid in achieving its $10 billion revenue
target in the next few years.
However, Corning faces significant competition due to market
saturation, pricing pressure and product launches. For its hardware
and equipment products, the company faces stiff competition from
the likes of 3M Company (
MMM), Tyco Electronics, Ltd. ( TEL),
Furukawa OFS, CommScope and ADC Communications.
Corning shares currently carry a Zacks #4 Rank, which translates
into a Sell rating for the short term (1–3 months).
Rating Action on DFC Global
Standard & Poor's Ratings Services (S&P) allotted “B+”
issuer credit rating (ICR) to DFC
Global ( DLLR) with a stable outlook.
Concurrently, the credit rating agency also allotted “B+” rating
to the company’s expected $200 million notes issue.
DCF Global has also priced its proposed $200 million notes
offering. The notes will carry a coupon of 3.25% with maturity
scheduled for 2017.
The rating on DFC Global incorporates the company’s solid market
position along with its widespread exposure and different product
offerings. The rating also takes into account DFC Global’s
increased leverage, negative tangible equity and modest interest
coverage.
The rating agency stated that DFC Global will be considered for
rating upgrades if the company maintains or lowers the leverage at
below 3.5x and maintains or increases EBITDA interest coverage at
above 4.0x. Also, the rating agency expects the company to maintain
sufficient liquidity.
However, the rating will be subject to downgrade if
profitability lowers and leverage trends or surpasses 5.0x.
DFC Global reported a strong fiscal second quarter with earnings
of 51 cents, ahead of the Zacks consensus Estimate as well as year
ago earnings led by a solid performance at its core business
units.
The company experienced higher consumer lending revenue
(shooting 61% year over year) and pawn service fees and sales
increased nearly three-fold. The company also has a solid liquidity
position, besides remaining focused on enhancing its shareholders
value.
Going forward, the company is also expected to grab
opportunities through acquisitions and deploy the available funds
to further enhance future earnings.
We retain our Neutral recommendation on DFC Global over the long
term. The quantitative Zacks #3 Rank (short-term Hold rating) for
the company indicates no clear directional pressure on the stock
over the near term.
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BECTON DICKINSO (BDX): Free Stock Analysis Report
DFC GLOBAL CORP (DLLR): Free Stock Analysis Report
CORNING INC (GLW): Free Stock Analysis Report
3M CO (MMM): Free Stock Analysis Report
TE CONNECT-LTD (TEL): Free Stock Analysis Report
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