The Zacks Analyst Blog Highlights: Lockheed Martin, Boeing, Embraer, General Dynamics and Wendy's - WICU12 HD WSEE Erie, PA News, Sports, Weather and Events

The Zacks Analyst Blog Highlights: Lockheed Martin, Boeing, Embraer, General Dynamics and Wendy's

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Zacks Investment Research, Inc.

CHICAGO, July 3, 2014 /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 Lockheed Martin Corp. (NYSE:LMT-Free Report), Boeing Co. (NYSE:BA-Free Report), Embraer SA (NYSE:ERJ-Free Report) General Dynamics Corp. (NYSE:GD-Free Report) and Wendy's Company (Nasdaq:WEN-Free Report).

Zacks Investment Research, Inc., www.zacks.com

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

Lockheed Martin to Freeze Pension Program

Bethesda, MD-based prime defense contractor Lockheed Martin Corp. (NYSE:LMT-Free Report) announced that it will freeze its defined benefit pension plan and move active salaried workers to an enhanced defined-contribution program. This will not only enable the defense major to manage the rising costs of its retirement programs, but will also limit long-term liabilities.

Under a two-phase transition plan, starting on Jan 1, 2016, pay-based pension benefits will be frozen first, followed by service-based benefits. Pay-based benefits will be frozen on Jan 1, 2016 and service-based benefits will follow suit on Jan 1, 2020. Hence, by Jan 1, 2020, Lockheed Martin's current service-based benefits will be terminated.

The new 401(k) retirement plans will offer employees up to 10% of their salary in company contributions each year. This move not only helps to retain skillful talent at the company, but also helps in reducing long-term costs.

The Pentagon repays defense contractors a certain portion of their workers' pension costs tied to work that was done for military programs. The defense companies had to wait for years for the funds, but last year's new accounting regulations are expected to speed up the pace of those compensations. The new rules will certainly give a boost to the cash flow of these companies, thereby helping to drive earnings in a currently tepid budget scenario where the top line is constantly under pressure.

We note that Lockheed started to phase out its traditional pension program in 2006. The U.S. pension fund was also closed to new hires then. Lockheed Martin said 48,000 out of 113,000 total employees are still enrolled in the program. It also comprises 250,000 retirees and former employees.

Last year, Lockheed Martin exhausted $2.25 billion in cash for its worldwide defined benefit plans. In Jan 2014, the company announced that it expects to contribute $1 billion in 2014.

The maker of the world's most expensive weapons system – the F-35 Joint Strike Fighter – Lockheed expects to update full-year estimates for pension expense in its second quarter 2014 earnings report, which is slated to be released on Jul 22. The company does not expect the pension-freeze plan to affect its second-quarter financial results.

Another defense giant The Boeing Co. (NYSE:BA-Free Report) had disclosed a similar move in March. Boeing said that it would freeze the pension benefits of almost 70,000 of its non-union employees and move them to 401(k) plans starting 2016. These changes to the retirement program have largely been triggered by varying workforce demographics, better life expectancy as well as historically low interest rates that extensively increased pension liabilities in 2014.

Although Lockheed Martin's latest move will not drastically accelerate cost savings for the company until after 2020, but will help in managing costs that is the key for remaining competitive in the long run.

Lockheed Martin carries a Zacks Rank #2 (Buy). Other similar ranked defense players include Embraer SA (NYSE:ERJ-Free Report) and General Dynamics Corp. (NYSE:GD-Free Report).

Wendy's International Expansion On Track

On Jun 26, 2014, we issued an updated research report on The Wendy's Company (Nasdaq:WEN-Free Report).

On May 8, this leading restaurateur posted first quarter 2014 results with earnings and revenues beating the Zacks Consensus Estimate. Adjusted earnings of 7 cents increased substantially year over year on better-than-expected revenues.

However, revenues declined 13.3% year over year to $523.2 million. The downside reflects a reduction in the number of company-operated restaurants as a result of the system optimization initiative. Per the initiative, the company has lowered its restaurant ownership from 22.0% to 15.0%, which has pressurized revenues in the quarter and is expected to continue in the near term.

Moreover, higher beef costs are expected to weigh on margins, mainly in the second and third quarter of the year. As a result, the company has lowered its expectation for company-operated restaurant margin for the year.

Though the reduction in ownership is currently weighing on revenues, we believe franchising a large chunk of its system will facilitate earnings and return on equity growth by lowering capital requirements over the long-term. Moreover, this will also add to the top line in the form of royalty and rental income. The franchised business model will help the company generate strong free cash flow, thereby helping it to maintain a healthy balance sheet.

Moreover, Wendy's has growth plans and partnerships in Argentina, the Philippines and Japan. Further, Wendy's has long-term development agreements with franchisees in the Middle East, North Africa, Singapore, Turkey, Russia and the Eastern Caribbean region, Georgia, the Republic of Azerbaijan, Ecuador and Chile. Additionally, the company is exploring growth opportunities in China, Brazil and other key international markets. These less saturated developing markets offer the company enormous growth opportunities.

The burgeoning middle-class population with rising income levels has led to an increase in demand for convenience food and beverages like hamburgers, chicken sandwiches and nuggets, baked and French fries, and Frosty desserts. Moreover, over the long-term, we remain optimistic on the company's sales initiatives, which include menu innovation, international expansion and re-imaging of units.

The company presently has a Zacks Rank #3 (Hold).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Get the full Report on LMT - FREE

Get the full Report on BA - FREE

Get the full Report on ERJ - FREE

Get the full Report on GD - FREE

Get the full Report on WEN - FREE

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow
3514 State St. Erie, PA 16508
Newsroom: (814)454-8812
Toll Free: 1(800)454-8812
Business offices: (814)454-5201
WICU FCC Filing
WSEE FCC Filing
Share:
Share Stories
Submit your stories to our site!
Share Photos
Share your photos in our community galleries
Mobile:
Mobile Site
Be sure to stay constantly updated with the power of WICU12 and WSEE at your fingertips
Free Android App
Free iPhone App
Free iPad App
Storm Tracker App
Droid
iPhone
iPad
All content © Copyright 2000 - 2014 WorldNow and WICU. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.
                   WICU/WSEE - 3514 State Street Erie, PA 16508 - (814) 454-5201 - info@wicu12.com