Zacks Analyst Blog Highlights: Dril-Quip, Inc., STMicroelectronics N.V., Telefonaktiebolaget LM Ericsson, Linktone Ltd. and Smith & Nephew, PLC

Business Wire, Nov 14, 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: Dril-Quip, Inc. (NYSE: DRQ), STMicroelectronics N.V. (NYSE: STM), Telefonaktiebolaget LM Ericsson (Nasdaq: ERIC), Linktone Ltd. (Nasdaq: LTON) and Smith & Nephew, PLC (NYSE: SNN).

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Here are highlights from Thursday's Analyst Blog:

Dril-Quip Near Fair Value

Dril-Quip, Inc. (NYSE: DRQ) manufactures highly engineered offshore drilling and production equipment for deepwater severe-service applications and harsh environmental conditions.

Dril-Quip's third-quarter 2008 results came on the weaker side, hurt by Hurricane Ike, which disrupted its manufacturing and delivery operations in September. In the third quarter, earnings came in at $0.69 per diluted share (our estimate was $0.72 per diluted share), compared to $0.67 per diluted share in the prior-year period. Profit for the period fell to $27.4 million as against $27.6 million in the year-ago quarter though earnings per diluted share rose marginally due to fewer shares outstanding.

STMicro Continues Cutting Costs

STMicroelectronics N.V. (ADR) (NYSE: STM) continues to upgrade products and forge strategic alliances in order to fuel long-term growth. The company reported a weaker 2008 second quarter in terms of revenues and earnings, despite good performances of its ASP and IMS groups.

However, we still expect that the strengthening Euro will ultimately lead to margin weakness, even as the company continues to cut costs. The restructuring of its manufacturing facilities -- through the opening of its Chinese facility as well as the initiation of a partnership with Ericsson (Nasdaq: ERIC) -- may enable the company to save on R&D spending, which could help alleviate some cost pressures.

Linktone Near Bottom of Trough

We maintain our Hold recommendation and the same valuation target for Linktone Ltd. (ADR) (Nasdaq: LTON), a leading provider of wireless value-added services (WVAS) in China, ahead of third quarter financial results.

The Chinese wireless value-added services market is experiencing intense competition and policy/regulatory changes are materially impacting Linktone's business. However, market opportunities remain attractive arising from the launch of 3G wireless services, along with mobile television and flash media products and services in China.

Smith & Nephew Remains a Hold

Smith & Nephew, PLC (ADR) (NYSE: SNN) is a U.K.-based global medical device company that employs over 7,000 people, and operates in 32 countries. It develops, manufactures, and markets orthopedic, endoscopic and advanced wound management products.

We are maintaining a Hold recommendation on SNN after the company's third quarter results. Smith & Nephew is benefiting from its Earnings Improvement Program (EIP) with underlying revenue growth is still around 10%.

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