Zacks Bull and Bear of the Day Highlights: Eaton Corp, Lockheed Martin Corporation, Procter & Gamble, Sprint Nextel and Comcast Corp.

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Oct 28, 2010, 08:01 ET

CHICAGO, Oct. 28 /PRNewswire/ -- Zacks Equity Research highlights Eaton Corp. (NYSE: ETN) as the Bull of the Day and Lookheed Martin Corporation (NYSE: LMT the Bear of the Day. In addition, Zacks Equity Research provides analysis on Procter & Gamble (NYSE: PG), Sprint Nextel (NYSE: S) and Comcast Corp. (NYSE: CMCSA).

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Full analysis of all these stocks is available at http://at.zacks.com/?id=7835.

Here is a synopsis of all five stocks:

Bull of the Day:

Eaton Corp. (ETN) has gradually transformed itself from an automotive and truck component manufacturer into a diversified industrial enterprise with leading positions in its core electrical, hydraulic and aerospace market segments.

Eaton's third quarter earnings of $1.60 outperformed the Zacks Consensus Estimate of $1.38, driven by 14% end-market growth. Also, bookings across the company's business segments showed substantial growth, with greater strength at Electrical, Hydraulic and Aerospace. In our view, the company's organic growth will be driven by strength in its end-markets.

Going forward, the company expects global market conditions to improve, especially international markets. We upgrade our recommendation for ETN to Outperform with a target price of $105.

Bear of the Day:

Lockheed Martin Corporation (LMT), the largest U.S. defense contractor, reported disappointing numbers in the third quarter, with EPS missing the Zacks Consensus Estimate and lagging the year-ago quarterly numbers.

In the near-term, the gloom is unlikely to lift given the overhang of defense budget cuts, a receding order backlog, headwinds in margins, execution risk of major programs, cost overruns, higher pension liability and risks regarding retrenchment cost recovery.

We do not expect the situation to improve significantly in the near future, and therefore downgrade Lockheed Martin to Underperform.

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Procter & Gamble Reports Modest Q1

Procter & Gamble Co. (PG) reported modest results for the first quarter of 2011. Net earnings from continuing operations of $1.02 a share were 5% above the 97 cents a share profit posted in the year-ago period. Earnings were also above the Zacks Consensus Estimate of $1.00.

Procter & Gamble forecasts second-quarter 2011 net earnings from continuing operations and core earnings to be in the range of $1.05 to $1.11 per share, reflecting a 4%–10% growth rate. The guidance implies that P&G will continue to invest in innovation and various marketing program. The Zacks Consensus Estimate for the next quarter is $1.12 per share.

For fiscal 2011, the company reaffirms its net earnings from continuing operations and core earnings to be in the range of $3.91–$4.01 per share, a 11%–14% growth on a continuing operations basis and 7%–9% growth on a core basis. The Zacks Consensus Estimate for fiscal 2011 is $3.98.

Sprint Loss Widens Again

Sprint Nextel (S), the third-largest U.S. wireless carrier, reported third quarter 2010 adjusted net loss per share of 18 cents, which surpassed the Zacks Consensus Estimate of net loss of 28 cents. Adjusted earnings excluded a one-time tax related to non-cash charge of $365 million (12 cents per share). Sprint reported its third quarter results before the opening bell.

On a GAAP basis, Sprint posted a net loss of $911 million (30 cents per share), 91% more than the net loss of $478 million (17 cents) in the year-ago quarter. Third quarter loss widened as Sprint spent more to upgrade its handsets and increase sales of its products.

Consolidated operating revenue inched up 1% year over year to $8.152 billion and was above the Zacks Consensus Estimate of $8.023 billion. This marks the first quarterly increase in three years. Higher revenues were driven by strong revenues from prepaid Boost service and equipment, partially offset by lower contributions from its wireline and post-paid wireless businesses.

Adjusted OIBDA (operating income/loss before depreciation, amortization, asset impairments and abandonments) fell 11% year over year to $1.3 billion. Higher handset subsidy as well as increased sales expenses put a drag on adjusted OBIDA in the third quarter.

Comcast Again Beats Zacks Estimate

Comcast Corp. (CMCSA) reported third quarter 2010 financial results, which exceeded the Zacks Consensus Estimate. Adjusted EPS in the reported quarter was 32 cents compared with 28 cents in the prior-year quarter. Adjusted EPS includes $39 million, net of tax expense related to the NBC Universal Transaction.

Adjusted EPS exceeds the Zacks Consensus Estimate of 30 cents. Better-than-expected results were due to a solid customer growth, an improving advertising market and continued strength in Business Services.

GAAP net income was $867 million or 31 cents per share, compared with $944 million or 33 cents per share in the prior-year quarter. Net income declined 8.2% year over year, partly due to costs related to its pending acquisition of NBC Universal.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=7836.

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