Zacks Analyst Blog Highlights: Apple, Integrated Device Technology, Leadis Technology, Forest Laboratories, Inc. and FedEx Corporation

Business Wire, June 18, 2009

http://www.profit.zacks.com/

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: Apple (Nasdaq: AAPL), Integrated Device Technology (Nasdaq: IDTI), Leadis Technology (Nasdaq: LDIS), Forest Laboratories, Inc. (NYSE: FRX) and FedEx Corporation (NYSE: FDX).

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Here are highlights from Wednesday’s Analyst Blog:

Touch-Screens Feeling Hot

This technology seemed to struggle to gain acceptance until Apple (Nasdaq: AAPL) released the iPhone.

The capacitive touch-screen and touch-button controller segment is projected to hit 1.3 billion units by 2012, a 44 percent compounded annual growth rate, according to market research firm Gartner: "Capacitive touchscreens are rapidly becoming common in mobile handsets, spurred by the success of the iPhone," said Gartner analyst Amy Leong.

Armed with this information, on June 11, 2009, Integrated Device Technology (Nasdaq: IDTI) announced it has purchased the touch sensor technology assets from Leadis Technology. In addition, IDT will also acquire the Leadis Technology (Nasdaq: LDIS) intellectual property and employee teams that run the touch sensor business.

Gartner feels the next growth arm for touch will be for the PC market. According to Leong, "In the past, capacitive touch technology has been widely used in touch pads for notebook PCs. However, manufacturers are now implementing capacitive touch technologies into PCs and PC peripherals in the form of touchscreens, proximity touch-sensing buttons or sliders and multi-touch mouse pads."

Forest Labs Pipeline Crucial

Forest Laboratories, Inc.'s (NYSE: FRX) financial results for 2009 were inline with our expectations. EPS fell 3% on revenue growth of 2% as operating cost growth outpaced that of revenue. SG&A expenses grew 10%, reflecting increased costs related to the launch of Bystolic and pre-launch costs of Savella. Fourth quarter results showed some softening in Lexapro sales, but were also largely inline with our forecast.

Management’s guidance for 2010 is EPS of $3.45 - $3.55 on revenue of approximately $4.1 billion. This implies relatively flat EPS from 2009 and revenue growth of about 5%. EPS guidance is inline with our previous expectations while revenue is about 2% lower as a result of lower sales guidance of Savella.

Longer-term, we remain concerned about the strength of the pipeline relative to the loss in sales that will come with the Lexapro and Namenda patent expirations. We model Lexapro to account for over 48% of total revenue in fiscal 2012. With the drug losing patent protection in March 2012, that means roughly half the company’s top-line will be at risk to generic competition.

FedEx Beats Estimates

Today, FedEx Corporation (NYSE: FDX) reported fiscal fourth quarter (May 31) net earnings before nonoperating items of $200 million, or $0.64 per diluted earnings per share -- down 56% year over year from the $455 million, or $1.45 diluted earnings per share, posted in the prior-year quarter. This was above consensus diluted EPS of $0.51 and our estimate of $0.63.

Revenues dropped 20% to $7.9 billion from $9.9 billion a year ago, largely due to very weak performances at FedEx Express, where revenues declined 25% to $4.8 billion from $6.4 billion, and at FedEx Freight, where revenues fell 28% to $948 million from $1.3 billion, reflecting reduced shipment volumes, weak pricing due to increased competition, and lower fuel surcharge revenue from a weak global economy.

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