Zacks Analyst Blog Highlights: CNET Networks, Yahoo!, Applied Micro Circuits, Comstock Resources and Stone Energy

Business Wire, May 8, 2008

CHICAGO -- 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: CNET Networks, Inc. (Nasdaq: CNET), Yahoo! Inc. (Nasdaq: YHOO), Applied Micro Circuits Corporation (Nasdaq: AMCC), Comstock Resources, Inc. (NYSE: CRK) and Stone Energy Corporation (NYSE: SGY).

See the latest posts to the Analyst Blog: http://www.zacks.com/blog/post_info.html?g=6

Here are highlights from Wednesday's Analyst Blog:

CNET Networks Needs Some Time

CNET Networks, Inc. (Nasdaq: CNET) reported a weaker-than-expected first quarter 2008, with revenues lower than our estimates on the back of weak U.S. media revenues and adjusted earnings better than our estimates. While the company faces a tough market environment in 2008, CNET is well positioned to benefit from any upswing in online advertising growth due to its leading brands as well as relationships with large advertisers. CNET has recently entered into a broad partnership with Yahoo! Inc. (Nasdaq: YHOO) that encompasses advertising content and search marketing.

We are maintaining our revenue estimates for 2008 while lowering our earnings estimate according to the guidance provided by the company. A decline in U.S. marketing and services revenue and to a lesser extent, display revenues led to a weaker-than-expected first quarter 2008 results. The company maintained revenue guidance for the remainder of 2008 while reducing GAAP earnings estimates for the rest of the year. We have lowered our full-year 2008 EPS estimate to $0.15 from our previous estimate of $0.17 in-line with the guidance provided.

We continue to rate shares of CNET a Hold as we feel that it will take some more time for the company to realize the full potential of its current restructuring and territorial business expansion initiatives in China and France. The recent partnership with Yahoo is expected to generate incremental revenues of $100 million over the next three years.

Applied Micro a Hold, Near-Term

Applied Micro Circuits Corporation (Nasdaq: AMCC) recently reported revenues of $71.5 million in Q4, in-line with our estimate of $71 million. GAAP EPS was ($1.33). On a non-GAAP basis, EPS was $0.09, missing our estimate by a penny. Gross margin was down both on a GAAP and a non-GAAP basis.

On a product basis, processor revenues increased 11% quarter-over-quarter to $30.7 million driven by strong product shipments to the enterprise wireless access, 3G base station and packet processing applications. Transport revenues of $27.8 million were up 11% quarter-over-quarter.

However, storage revenues decreased 4% quarter-over-quarter to $13 million and contributed 18% of the total revenues. The Company has undergone a number of management and product transitions, which we believe should soon be positioned to enter a period of sustainable revenue growth as newer products move to production at key OEMs.

Still Energized for Comstock

We are maintaining our Buy recommendation and raising our estimates and price target for Comstock Resources, Inc. (NYSE: CRK) shares following the company's better-than-expected quarterly results. The out-performance was driven by production gains (up 25% year-over-year) and higher realized commodity prices (up 32% year-over-year).

We have raised our earnings estimates to reflect the quarterly gain and a higher commodity-price deck. Our new full-year 2008 and 2009 EPS estimates are $3.10 and $3.45, up from $2.25 and $2.60 before, respectively.

Additionally, the Bois d'Arc sale to Stone Energy Corporation (NYSE: SGY) is expected to streamline Comstock's operations and position it to function as a pure-play onshore natural gas producer in addition to reducing exploration costs. The Haynesville Shale play offers significant long-term reserve-add potential going forward. In terms of growth potential (probable and possible reserves), the company's Haynesville Shale acreage is extremely prospective, providing reserve potential in excess of its current proved reserves.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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