AeroVironment, Meredith, Oracle and FedEx highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – September 18, 2018 – Zacks Equity Research highlights AeroVironment Inc. AVAV as the Bull of the Day, Meredith Corporation MDP as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Oracle ORCL and FedEx FDX.

Here is a synopsis of all four stocks:

Bull of the Day:

Headquartered in Monrovia, CA, AeroVironment Inc. is a company known for its Unmanned Aircraft Systems (better known as drones). It focuses primarily on the design and development of these systems, as well as tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects. AeroVironment supplies its drones to the U.S. Department of Defense, including the U.S. Army, Marine Corps, Special Operations Command, Air Force, and Navy.

The company recently sold off its electric charger division for $32 billion to Webasto Group, a move that allows it to focus completely on its various drone applications.

AeroVironment’s recent first quarter was a strong one, with results blowing straight past estimates. Sales surged 127% year-over-year to $78 million, and gross profit margins on those sales nearly doubled, hitting 42% and up from 25% in the year-ago period.

Earnings of 85 cents per diluted share easily beat the Zacks Consensus thanks to a beneficial litigation settlement that added 26 cents to the company’s bottom line.

Additionally, AeroVironment noted that backlog, which will eventually turn into revenues as the year goes on, more than doubled by the end of Q1 to $157 million; backlog was only around $70 million a year ago.

In the earnings release, president and chief executive officer Wahid Nawabi said “With the divestiture of our Efficient Energy Systems business, we have transformed AeroVironment into a future-defining technologies solution provider serving large and growing global defense, telecommunications and commercial markets. Strength in the end markets for our small UAS and Tactical Missile Systems, combined with continued progress in our HAPSMobile, Inc. joint venture, position us well to achieve our fiscal year 2019 objectives and our long-term value creation goals.”

Bear of the Day:

Meredith Corporation is a media and marketing services company based in Des Moines, IA. The company has two operating segments: National Media and Local Media. As of this year, Meredith is the largest magazine company in the world, and some of its biggest brands include People, Sports Illustrated, InStyle, Better Homes & Gardens, Magnolia Journal, Health, Entertainment Weekly, Cooking Light, and Travel + Leisure, among many others.

Just recently, co-founder of Salesforce.com Marc Benioff and his wife Lynne announced they are purchasing one of Meredith’s top publications, Time magazine, for $190 million. The proposed sale is expected to close within 30 days and will be unrelated to Salesforce.

Shares of MDP have experienced downturn lately, falling over 19% year-to-date, and mixed results in Meredith’s fourth-quarter earnings report added to the stock’s woes.

Looking at Meredith’s Q4 report a little deeper, the publishing company posted adjusted earnings of 69 cents, missing the Zacks Consensus and falling 35.5% year-over-year.

Even with this earnings miss, Meredith’s revenue performance was strong last quarter. Total revenues of $788.1 million came in line with our consensus, and jumped 76.9% from the prior-year period. Advertising revenues grew 63% and circulation revenues more than doubled.

Additionally, People.com was a huge digital driver, generating record traffic.

In its earnings release, President and CEO Tom Harty said "Given the progress made on synergy achievement and asset divestitures, we expect to achieve our goals of reducing debt by $1 billion by the end of fiscal 2019 and generating $1 billion of adjusted EBITDA in fiscal 2020, meaningfully contributing to total shareholder return.”

Despite these revenue numbers, analysts were not impressed, and many lowered their estimates for 2019; the current consensus has fallen well over two dollars from $5.84 to $3.12 in the last 60 days. The outlook for 2020 has fallen as well, down 89 cents during the same time period.

MDP is now a #5 (Strong Sell) on the Zacks Rank.

Meredith remains positive on the Time Inc. properties it gained—the buyout was completed during the quarter—and expects a solid year for political advertising; political advertising revenues at its television stations are projected to be in the band of $55-$65 million for the current fiscal year.

Going forward, management expects Q1 earnings from continuing operation in the range of $2 million and $10 million, and expects adjusted EBITDA to be in the band of $122-$127 million. The effective tax rate for the quarter is forecasted to be 28%.

Additional content:

Oracle, FedEx Post Mixed Earnings Reports

After the closing bell this Monday, and separated by weeks on either side by the bulk of normal earnings seasons, tech major Oracle posted mixed results in its fiscal Q1 2019: 71 cents per share was a 3-cent positive surprise from the consensus, but revenues of $9.20 billion missed the $9.29 billion Zacks analysts had been looking for. This top-line result was also basically flat from Oracle's revenue total in the year-ago quarter.

On the earnings side, it's been a full two years since Oracle missed estimates on the bottom line. The company also plans a massive 12 billion share buyback program. However, this hasn't been enough to keep ORCL shares from sliding 5% in after-hours trading. For more on ORCL's earnings, click here.

Transportation and logistics giant FedEx also posted fiscal Q1 2019 earnings results this afternoon, also mixed compared to estimates: $3.10 per share was well below the $3.78 in the Zacks consensus, while revenues in the quarter of $17.1 billion beat the $16.88 billion analysts had been looking for. However, FedEx rose its full-year guidance by 20 cents on both top and bottom ends of the range, to $15.88 - $16.45 per share. This is the fourth quarter in the past eight where FedEx has come up short on bottom-line estimates. Shares are trading down roughly 2.5% in after-hours trading.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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AeroVironment, Inc. (AVAV) : Free Stock Analysis Report
 
Oracle Corporation (ORCL) : Free Stock Analysis Report
 
Meredith Corporation (MDP) : Free Stock Analysis Report
 
FedEx Corporation (FDX) : Free Stock Analysis Report
 
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