The Zacks Analyst Blog Highlights: DeVry Inc., Royal Caribbean Cruises Ltd., Conoco Phillips, Mylan Inc. and JAKKS Pacific Inc.

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Oct 28, 2010, 08:01 ET

CHICAGO, Oct. 28 /PRNewswire/ -- 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: DeVry Inc. (DV), Royal Caribbean Cruises Ltd. (RCL), ConocoPhillips (COP), Mylan, Inc. (MYL) and JAKKS Pacific Inc. (JAKK).

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Here are highlights from Thursday's Analyst Blog:

DeVry Beats Zacks Consensus

DeVry Inc. (DV) registered first-quarter 2011 earnings of $1.03 per share, exceeding the Zacks Consensus Estimate of 95 cents by 8.4% and the year-ago earnings of 76 cents by 35.5%.

The upbeat results came in the wake of successful implementations of growth and diversification strategies, improvement in academic quality and successful student enrollment. Further, graduates are also being able to find suitable placements despite a tough job market.

On a year-ago basis, total sales jumped 21% to $521 million for the reported quarter. The Zacks Consensus Estimate for revenues stood at $522 million.

In terms of segments, Business, Technology and Management grew 24.5% to $352.9 million, while Medical and Healthcare grew 16.6% to $136.6 million, Professional Education spiked 4.2% to $19.9 million and Other Educational Services recorded a growth of 5.3% to $11.9 million in the quarter.

DeVry's operating income rose 40.9% to $111.8 million in the quarter from $79.4 million a year earlier. DeVry exited the year with cash, marketable securities and investment balances of $450.9 million, and no outstanding debt. Total shareholders' equity was $1,223.9 million at the end of the quarter.

For the reported quarter, DeVry generated $195.9 million of cash from operating activities, boosted by strong operating results.

DeVry repurchased 972,205 shares at an average price of $51.43 for a total of $50.0 million in the quarter.

Royal Caribbean Tops, Ups Outlook

Royal Caribbean Cruises Ltd. (RCL) reported third-quarter 2010 non-recurring earnings of $1.64 per share, well ahead of Zacks Consensus Estimate of $1.56 and the year-earlier quarter's earnings of $1.07. The quarter's earnings also inched past management's guidance range of $1.52 and $1.57. Strong results came on the back of an improvement in close-in bookings and strict cost control.

Total revenue in the quarter increased 16.7% year over year to $2.1 billion, surpassing the Zacks Consensus Estimate of $2.0 billion. The prominent year-over-year increase in revenue was driven by a rise in capacity and net yield.

Inside the Headline Numbers

Net yield upped 5.2% year over year wiping out adverse effects from the ongoing economic uncertainty. The rise in yield was driven by a 19.7% improvement in net ticket revenue and moderate increase in on-board revenue. Net yields at Royal Caribbean were up 7.2% on a constant currency basis. Occupancy rate also rose to 107.3% from 105.4% in prior-year quarter.

Total cruise operating expenses grew 11% year over year to $1.2 billion in the third quarter. Net cruise costs per passenger including fuel dipped 2.3% year over year despite a rise in oil prices in the quarter.

Impressive 3Q for ConocoPhillips

ConocoPhillips (COP) reported its third-quarter 2010 earnings of $1.50 per share (excluding non-recurring items), well above the year-ago quarter's earnings of 95 cents as well as the Zacks Consensus Estimate of $1.46. The improved performance primarily reflects a hike in commodity prices associated with improved U.S. refining margins, partially offset by lower production volumes.

Revenues in the reported quarter improved more than 20% year over year to $49.5 billion, comfortably beating the Zacks Consensus Estimate of $43.5 billion.

Outlook

Conoco expects its fourth quarter production to be approximately 1.71 MMBOE, slightly lower than the third quarter level. Management anticipates over the next few years, production declines may be offset by new production from major projects in offshore southeast Asia, LNG projects in Qatar and Australia, Canadian SAGD oil sands projects and Lower 48 shale developments.

The company's exploration initiatives toward liquids rich plays such as Eagle Ford, Bakken and North Barnett shale plays are gaining momentum.

As the new management team is on board and initiatives of offloading its stake in LUKOIL are on track, it remains to be seen how the company moves toward improving its bottom line. Our long-term Neutral recommendation remains unchanged at this stage with the Zacks #3 Rank (Hold).

Mylan Falls Short on Revenue

Mylan, Inc. (MYL) reported third quarter 2010 adjusted earnings of 43 cents, beating the Zacks Consensus Estimate of 42 cents. The quarterly EPS was up 16.2% sequentially and 34.4% from the year-ago quarter.

On a GAAP basis, the company reported earnings of 33 cents compared to a loss of 13 cents in the comparable quarter of 2009.

Total revenues for the company increased 7.9% from the previous year quarter to $1.36 billion, but fell short of the Zacks Consensus Estimate of $1.41 billion.

Gross profits increased 14.9% from the previous year quarter to $580.1 million. Gross margins increased 2.9 percentage points to 42.8%. Earnings from operations increased 282.2% from the year-ago quarter to $234.3 million.

Management reaffirmed 2010 adjusted diluted EPS guidance of $1.55 - $1.65. This compares to the current Zacks Consensus of $1.60. Estimates for the quarter had been stable in the run-up to the earnings release, with one analyst raising estimates in the last 30 days.

JAKKS Beats, Outlook Raised

JAKKS Pacific Inc. (JAKK) reported its adjusted third quarter 2010 earnings of $1.23 per share, beating the Zacks Consensus Estimate of $1.07 and $1.13 in the prior-year quarter. The third quarter earnings include a tax benefit of 17 cents per share.

While the company experienced a decline in net sales, the results were aided by cost cuts, restructuring activities and strong sales of traditional toys such as dolls and Halloween costumes.

GAAP net income was $40.4 million or $1.23 per share, compared with $33.7 million or $1.06 per share in the year-ago quarter.

The company reported a 0.8% year-over-year decrease in revenues to $348.7 million. However, the reported revenues outperformed the Zacks Consensus Estimate of $306.0 million.

Selling, general and administrative expenses fell 3.0% year over year to $37.1 million. This decrease is primarily due to the cost-cutting measures implemented by the company. Operating margin declined 10 basis points (bps) to 14.8% during the quarter.

JAKKS' product line is strong for the holiday season, including a strong demand for new toys, electronics and Halloween costumes. The company also remains confident about the progress in its product line for 2011. The company is also interested in acquisition and is looking for possible target.

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