Harley-Davidson, Verizon Communications, Google

Chicago, IL - January 25, 2012 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Technology analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Harley-Davidson Inc., Verizon Communications, Google Inc., Apple Inc. and AT&T Inc..

Revenues from Motorcycles and Related Products rose 12% to $1.03 billion, which compared with the Zacks Consensus Estimate of $995 million. Earnings from motorcycle sales appreciated 13.5% to $791.9 million due to increase in shipments to 50,730 motorcycles in the quarter in accordance with study from 44,481 motorcycles in the fourth quarter of 2010.

The full year

For the full year, earnings from Motorcycles and Related Products rose 11.6% to $4.66 billion, which compared with the Zacks Consensus Estimate of $4.64 billion. Earnings from motorcycles sales went up 13.3% to $3.55 billion on shipments of 233,117 units to dealers and distributors worldwide, reflecting a 10.7% increase from 2010.

Before the opening bell, the largest U.S. mobile service provider Verizon Communications reported fourth quarter 2011 adjusted revenues of 52 cents per share. The quarter's revenues were a penny below the Zacks Consensus Estimate nevertheless 2 cents ahead of the year-ago revenues.

Total revenue increased 7.7% year over year to $28.44 billion in the fourth quarter and surpassed the Zacks Consensus Estimate of $28.43 billion. This represents the highest year-over-year quarterly revenue growth in 11 years mainly driven by continued strong wireless services, FiOS fiber-optic services and strategic services.

Revenue for fiscal 2011 rose 4% to $110.875 billion from the last year. On an adjusted basis, revenue upped 6.2% year over year. EBITDA rose 3.4% year over year to $29.4 billion in fiscal 2011.

Wireless revenue climbed 13% year over year to $18.254 billion in the reported quarter on the back of increased smartphone penetration and increased retail postpaid average revenue per user. Service, Equipment and Other earnings grew 6.4%, 96.7% and 12.5%, respectively. Data revenue spiked 19.2% from the year-ago quarter and represented 41.6% of service revenue.

Rapid expansion of 4G Long-Term Evolution services, strong adoption of Google Inc.'s Android smartphones and Apple Inc.'s iPhone led to the strong growth in retail wireless subscribers. At the end of the fourth quarter, smartphones accounted for 44% of retail postpaid wireless, up from 39% in the prior quarter. Verizon sold 4.2 million iPhones in the fourth quarter, more than doubled sequentially.

Wireline revenue dipped 1.5% year over year to $10.1 billion in the fourth quarter due to continued declines across global wholesale and other businesses. Momentum for the FiOS fiber-optic network and sales of strategic service in the U.S. but remained strong.

The reported quarter

During the reported quarter, Verizon added 194,000 and 201,000 new clients to its FiOS Video and FiOS Internet services, respectively. The company exited fiscal 2011 with 4.2 million FiOS Video clients and 4.8 million FiOS Internet clients. The penetration rate of both FiOS Internet and FiOS Video grew to roughly 35.5% and 31.5%, respectively, across all markets from year-ago levels of 31.9% and 28%.

Strategic services showed a substantial increase of 14.7% from the year-ago quarter, representing 50.6% of enterprise revenue in the fourth quarter.

The end of the fourth quarter

Total Broadband connection at the end of the fourth quarter was 8.7 million, up 3.3% year over year. The DSL-based HSI connections fell 10.6% year over year to 3.8 million. Total voice connections, representing FiOS Digital Voice connections should the contingency arise to traditional switched access lines, dropped 7.2% to 24.1 million. This is the least year-over-year decline since the first quarter of 2006.

We believe fiscal 2012 will be a great year for Verizon considering the promise in both Wireless and Wireline businesses. On the wireline front, continued strong FiOS fiber-optic networks and strategic services, including cloud-computing business, would boost profitability going forward and would enhance shareholder value.

The purchase of new wireless spectrum licenses

Though the purchase of new wireless spectrum licenses would be accretive to Verizon in the long term given the leading position in the 4G LTE deployments, we believe it might put pressure on the balance sheet within a short time by reducing cash balances and increasing capital expenditures. Should the contingency arise, persistent erosion in access lines, uncertain returns from investments, iPhone subsidies and intense competition from cable companies and other alternative services providers are threats to the stock.