Zacks Equity Research highlights Black Diamond (Nasdaq: BDE-Free Report) as the Bull of the Day and Invacare Corp (NYSE: IVC-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on SolarCity Corporation (Nasdaq: SCTY-Free Report) and Wal-Mart Stores Inc. (NYSE: WMT-Free Report).
Here is a synopsis of all four stocks:
Black Diamond (Nasdaq: BDE-Free Report) recently reported Q3 earnings data which topped both the Zacks Consensus Earnings and Revenue Estimates. The reasons behind the beats were solid reorders for the Black Diamond spring/summer product, the POC and Black Diamond brands, and the POC Road line. The strength of these lines helped propel Black Diamond's revenues up 24% year over year.
This Zacks Rank #1 (Strong Buy) company was formerly known as Clarus Corporation, operates as a manufacturer and distributer of outdoor recreation and equipment and active lifestyle products. Black Diamond's products range from rock-climbing equipment, technical and high end backpacks, headlights and lanterns, gloves and mittens, tents, skis, ski products, and avalanche safety equipment.
Black Diamond posted solid Q3 earnings data, beating the Zacks Consensus Earnings Estimate by a whopping 1200%, and beat the Zacks Consensus Revenue Estimate by $1 million dollars. Further, the company has beaten the Zacks Earnings Estimates in three out of the four previous quarters with an average positive earnings surprise of 553.13%.
These solid consistent numbers has caused the Zacks Earnings Estimates for Q4, FY 2014, Q1 2015, and FY 2015 to all increase over the past 30 days. Estimates have risen: Q4 from $0.04 to $0.10, FY 2014 from -$0.18 to -$0.01, Q1 2015 from -$0.05 to -$0.01, and FY 2015 from -$0.01 to $0.26.
Invacare Corp (NYSE: IVC-Free Report) announced Q3 earnings late October, and for the third consecutive quarter they missed the Zacks Consensus Earnings Estimate, and they missed the Zacks Consensus Revenue Estimate for the second time in the last three quarters.
Invacare Corp, which currently carries a Zacks Rank #5 (Strong Sell), is the world's leading manufacturer and distributer of non-acute health care products based upon its distribution channels, and the breadth of its product lines and sales. The company designs, manufactures and distributes an extensive line of health care products for the non-acute care environment including home health care, retail and extended care markets.
For Q3 2014, the Zacks Consensus Earnings Estimate was missed by $0.30, or -113%, and the Zacks Consensus Revenue Estimate was missed by $7 million dollars, or -2.13%. The earnings miss is a continuation of previous quarters misses, in Q1 Invacare missed by -75%, and Q2 they missed by 28.57%.
The big issue facing Invacare Corp is a Consent Decree, an agreement between the FDA and IVC in which design and manufacturing activities were suspended, with various conditions, at IVC's Taylor Street complex (power wheelchair and corporate facilities). This agreement has been a significant headwind for the company for the past several years.
Further, during the Q3 earnings call, management did not give any guidance around the completion of the Consent Decree (therefore, it is still negatively impacting the company). It appears as though this Decree will continue into 2015.
Due to the continued earnings misses, the Zacks Consensus Earnings Estimates for Q4 2014, FY 2014, and FY 2015 have all declined in the past 30 days. Q4 2014 dropped from -$0.13 to -$0.23, FY 2014 decreased from -$1.23 to -$1.62, and FY 2015 fell from -$0.01 to -$0.38. Further, this company has been consistent in producing negative earnings surprises, the average negative earnings surprise is -72.98% over the past four quarters.
SolarCity, Wal-Mart Sustainability Story Continues
SolarCity Corporation (Nasdaq: SCTY-Free Report) has signed a deal with the giant retailer, Wal-Mart Stores Inc. (NYSE: WMT-Free Report), for installation of new solar projects at Wal-Mart stores across 36 states in a span of four years.
Since early 2010 SolarCity has concluded over 200 solar projects at Wal-Mart facilities. The company has also tested and installed energy storage projects beside 13 Wal-Mart locations since last year and plans to add 10 additional storage projects by next year. Each of these upcoming projects will employ a larger 200 kilowatt battery which will expand the storage capacity and further reduce energy expenses.
Since SolarCity's last announcement, in Jun 2013, the company has installed nearly 50 solar projects for Wal-Mart in Arizona, California, New York, Oregon and Puerto Rico with a total capacity of 15.8 megawatts.
Headquartered in San Mateo, CA SolarCIty designs, develops and installs solar energy systems at residential and commercial sites through leasing or selling. After tying up with Wal-Mart, SolarCity has created 5000 permanent jobs in the U.S.
Wal-Mart is the leading commercial user of solar energy and energy storage technology in the U.S. The company aims to go green and use 100% renewable sources of power generation at all its facilities by the end of 2020.
Apart from ongoing projects with Wal-Mart, SolarCity is expanding its operations in New Windsor with a 22,000-square-foot Orange County Operations Center. This will be the company's fourth project in New York and will cater to the rising solar demand in Hudson River Valley and the Catskills regions.
Increasing consciousness about greenhouse gas emission has resulted in increasing usage of alternate energy for generating power. The U.S. Energy Information Administration projects that solar energy consumption in the country will boom by roughly 35% in 2014.
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