CHICAGO, Nov. 14, 2013 /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 the JetBlue Airways Corporation (Nasdaq:JBLU-Free Report), Starbucks Corporation (Nasdaq:SBUX-Free Report), Mondelez International Inc. (Nasdaq:MDLZ-Free Report), Kraft Foods Group, Inc (Nasdaq:KRFT-Free Report) and Buffalo Wild Wings Inc. (Nasdaq:BWLD-Free Report).
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Here are highlights from Wednesday's Analyst Blog:
Impressive October Traffic for JetBlue
JetBlue Airways Corporation (Nasdaq:JBLU-Free Report) displayed better traffic across its network for the month of Oct 2013. The carrier reported airline traffic – measured in revenue passenger miles or RPMs – of 2.72 billion, up 7.1% year over year. Consolidated capacity (or available seat miles/ASMs) was also up 10.9% year over year at 3.34 billion.
The load factor or percentage of seats filled by passengers however, was 81.4%, down 290 basis points. Passenger revenue per available seat mile (PRASM) increased 4% year over year. The company registered a completion factor of 99.9%, with on-time performance of 87.0%.
For the first 10 months of 2013, JetBlue Airways generated RPMs of 29.90 (up 6.7% year over year) and ASMs of 35.47 billion (up 6.8% year over year), on a consolidated basis. Load factor was 84.3% in October, reflecting a decline of 10 basis points from the corresponding prior-year month.
We expect JetBlue to sustain traffic growth in the coming days based on increasing travel demand, network expansion, fleet re-designing, optimization of unit revenues, capital expenditure management and disciplined growth. The company's growing presence in key markets and penetration into untapped arenas will support its momentum. The airline recently unveiled a premium service termed Mint at an attractive price, aimed at enhancing the luxury offering between New York and California.
However, increase in maintenance cost owing to higher costs associated with the use of older E190 fleet and CF34 engine will affect the company's profitability. Further, competitive pressure could also weigh on the stock.
Starbucks to Pay $2.7B in Mondelez Dispute
Starbucks Corporation (Nasdaq:SBUX-Free Report) announced that it will have to pay $2.76 billion to Kraft Foods Inc. against settlement of the year-long distribution agreement dispute.
The indemnity will go to Mondelez International Inc. (Nasdaq:MDLZ-Free Report) which emerged when Kraft Foods was split into two separate companies – Mondelez and Kraft Foods Group, Inc (Nasdaq:KRFT-Free Report) – in October last year. While Mondelez took old Kraft's food and snacks business, Kraft Foods Group got the North American grocery business of the old Kraft.
Per the distribution agreement, old Kraft looked after the distribution and marketing of certain Starbucks and Seattle's Best Coffee branded packaged coffees in grocery channels. In fiscal 2011, Starbucks took back its packaged coffee business from old Kraft on the grounds of breaching the contract and not marketing its products properly.
However, Kraft denied Starbucks' accusations and commenced a federal court action against the latter in Dec 2010. Kraft had demanded damages worth $2.9 billion.
Starbucks has been ordered by an arbitrator to pay Mondelez $2.23 billion in damages plus $527 million in pre-judgment interest and attorneys' fees to settle the dispute. Starbucks has announced that it has ample cash and borrowing capacity to make the payment.
Starbucks' packaged coffee business is part of its Channel Development business also known as the CPG business. The CPG business reflects everything outside the Starbucks stores like packaged coffee, foodservice operations, K-Cups, Starbucks VIA Ready Brew and Tazo tea. In North America, the company has 100,000 points of distribution in the CPG channels. Starbucks has plans to introduce its CPG business in China in the long term.
The business is growing rapidly with revenues in the segment increasing 50% in fiscal 2012. Although revenues were below management's expectations in fiscal 2013, the CPG business is expected to return to double-digit growth in fiscal 2014. The company expects this business, which strengthens Starbucks' presence in the at-home coffee and away-from-home coffee segments, to continue to grow over the long term.
Starbucks carries a Zacks Rank #3 (Hold). Another stock in the retail/restaurant sector worth mentioning is Buffalo Wild Wings Inc. (Nasdaq:BWLD-Free Report) carrying a Zacks Rank #1 (Strong Buy).
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