Tag Archives: estimate

Cisco Beats On Revenue, Guides Higher: Tech ETFs In Focus

One of the tech primes – Cisco Systems (NASDAQ: CSCO ) – reported third-quarter results after the closing bell on Wednesday. While the company met our earnings estimates, it beat revenue estimates for the sixth consecutive quarter, spreading some bullishness into the sector. This is especially true given that the company clearly emerged as a strong winner amid dollar strength and succeeded when its major rivals International Business Machines (NYSE: IBM ) and Oracle (NYSE: ORCL ) faltered on revenue growth by missing our estimates earlier this earnings season (read: IBM Revenues Fall Again in Q1: ETFs to Watch ). Further, Cisco guided higher for the ongoing quarter at its conference call. Nonetheless, the company’s shares fell about 0.7% at the close in aftermarket hours. Cisco’s Q2 Results in Focus Earnings per share came in line with the Zacks Consensus Estimate of 48 cents (accounting for stock-based compensation). Revenues rose 5% year over year to $12.14 billion and were well ahead of our estimate of $12.06 billion. The better-than-expected revenue performance was aided by solid demand for its high-end switches and routers. The world’s largest network equipment maker expects revenues to grow 1-2% year over year and earnings per share in the range of 55-57 cents for the ongoing quarter. Earnings guidance is above the Zacks Consensus Estimate of 51 cents. Cisco is the leading player in routers and switches business and the fastest-growing company in the $50 billion market for servers. Earlier in the month, the company announced Chuck Robbins as the new CEO, who will replace John Chambers on July 26. Market Impact Cisco’s revenue beat and solid guidance put tech ETFs having the largest allocation to the network giant in focus for the days ahead. Investors should closely monitor the movement in these funds and grab the opportunity when it arises (see: all the Technology ETFs here) . iShares North American Tech-Multimedia Networking ETF (NYSEARCA: IGN ) This ETF provides concentrated exposure to the domestic multimedia networking securities by tracking the S&P North American Technology Multimedia Networking Index. Holding 24 securities in its basket, Cisco takes the third spot with an 8.92% allocation. The product has a definite tilt toward mid caps, which comprise half of the portfolio. The fund has accumulated $148.1 million while it sees moderate volume of less than 50,000 shares a day. Expense ratio comes in at 0.47%. The fund has added 4.7% in the year-to-date time frame and has a Zacks ETF Rank of 1 or “Strong Buy” rating with a High risk outlook. First Trust NASDAQ Technology Dividend Index ETF (NASDAQ: TDIV ) This fund provides exposure to the dividend payers in the technology sector by tracking the NASDAQ Technology Dividend Index. The product has amassed about $712.4 million in its asset base and trades in good volume of more than 207,000 shares per day. The ETF charges 50 bps in annual fees. In total, the fund holds about 110 securities in its basket. Of these firms, CSCO occupies the third position, making up roughly 8.17% of the assets. In terms of industrial exposure, the fund allocates nearly one-fifth portion in semiconductor and semiconductor equipment, followed by software (16.5%), technology hardware, storage & peripherals (16.4%), and communications equipment (14.2%). The fund is up 1.4% so far this year (read: Chipmakers Q1 Earnings Fail to Fuel Semiconductor ETFs ). PowerShares Dynamic Networking Portfolio ETF (NYSEARCA: PXQ ) This fund follows the Dynamic Networking Intellidex Index, holding 30 securities in its basket. Out of these, Cisco is the fifth firm accounting for 4.94% share. From a sector look, communications equipment dominates the fund’s portfolio, holding less than half the assets, followed by 29% in software and programming. The fund is less popular and illiquid in the broad tech space with AUM of $27.6 million and average daily volume of about 3,000 shares. It charges 63 bps in annual fees and has returned 5.5% in the year-to-date time frame. PXQ has a Zacks ETF Rank of 3 or “Hold” rating with a High risk outlook. Original post

A Look At Insurance ETFs Post Decent Q1 Earnings

After lagging in the last few quarters, financials has made an impressive comeback this earnings season, and has been one of the major contributors to overall Q1 earnings growth. Total earnings for 99.2% of the sector’s total market capitalization are up 16.2% on 2% revenue growth with beat ratios of 64.6% and 50%, respectively. Most of the sector’s growth comes from easy comparisons at Bank of America (NYSE: BAC ) and stronger earnings from J.P. Morgan (NYSE: JPM ), Goldman Sachs (NYSE: GS ), Citigroup (NYSE: C ) and many other banks. Further, earnings from the insurance industry also have been encouraging with most of the insurers beating the respective Zacks Consensus Estimate (read: Decent Banking Earnings Fail to Energize Financial ETFs ). While Prudential Financial (NYSE: PRU ), American International (NYSE: AIG ) and Allstate (NYSE: ALL ) surpassed our estimates on both the top and bottom lines, MetLife (NYSE: MET ) and Chubb Corp (NYSE: CB ) lagged on revenues. Nevertheless, Travelers (NYSE: TRV ) and Aflac Inc. (NYSE: AFL ) reported lackluster earnings. Insurance Earnings in Focus MetLife , the U.S. life insurer behemoth, beat the Zacks Consensus Estimate by 3 cents with earnings of $1.44, which improved 5% from the year-ago quarter. However, revenues slipped 0.5% year over year to $17 billion and fell shy of the Zacks Consensus Estimate of $17.5 billion. On the other hand, PRU , the second-largest U.S. life insurer, topped our earnings estimate by 15.8% and increased 16.3% year over year to $2.79. Revenues also rose 8% to $11.8 billion, much above our estimate of $10.9 billion. The largest commercial insurer in the U.S. and Canada, AIG posted impressive earnings of $1.22 per share, which surpassed the Zacks Consensus Estimate of $1.18 and increased 3.4% from the year-ago quarter. Earnings at one of the leading property and casualty insurer – Chubb – also beat our estimate by 1.95% and improved 4.7% from the year-ago quarter. However, revenues of $3.43 billion slightly missed the Zacks Consensus Estimate of $3.48 billion. On the other hand, earnings of personal property and casualty insurer, Allstate outpaced the Zacks Consensus Estimate by seven cents and were ahead of the year-ago earnings of $1.30. With this, the company kept its earnings streak alive with a trailing four-quarter average beat of 9.1%. Revenues rose 3.1% year over year to $8.95 billion and were well ahead of our estimate of $7.77 billion. Another property and casualty insurer and an industry bellwether, Travelers , posted disappointing earnings of $2.53 per share, lagging the Zacks Consensus Estimate by 3 cents and deteriorating 14% from the year-ago quarter. Revenues came in at $6.62 billion, down 1% from the year-ago quarter and marginally below the Zacks Consensus Estimate of $6.64 billion (see: all the Financial ETFs here ). Aflac, the seller of supplement health insurance, also missed our earnings estimate by a penny and fell 8.9% year over year. Revenues slid 7.3% year over year to $5.2 billion and marginally missed our estimate of $5.4 billion. ETFs in Focus Despite the decent results, the insurance industry witnessed mixed share price performances and ETFs have been on a roller coaster ride over the past one month gaining less than 0.7%. Investors looking to gain exposure to this corner of the market segment in a diversified way may consider the following ETFs. Any of these could be an excellent choice given that these have a top Zacks Rank of 2 or ‘Buy’ rating, suggesting their outperformance in the coming months. Further, the Fed is on track to raise interest rates sometime later in the year given the strengthening U.S. economy. As the sector is a clear beneficiary of a rising interest rate environment, an increase in interest rates would propel insurance stocks and ETFs higher (read: Financial ETFs in Focus on Rising Rates Buzz ). SPDR S&P Insurance ETF (NYSEARCA: KIE ) This fund follows the S&P Insurance Select Industry Index and offers an equal weight exposure to 50 stocks, suggesting no concentration risk. None of the securities holds more than 2.31% of total assets. More than one-third of the portfolio is allocated to the property and casualty insurance sector while life & health insurance accounts for another one-fourth share. The ETF has managed $294 million in its asset base and trades in a moderate average daily volume of over 58,000 shares. The product has an expense ratio of 0.35%. iShares U.S. Insurance ETF (NYSEARCA: IAK ) With AUM of $117.2 million, this product tracks the Dow Jones U.S. Select Insurance Index and charges 43 bps in annual fees. Volume is light, trading in less than 19,000 shares per day. In total, the fund holds 63 securities in its basket with the largest allocation going to American International at 12.7%, closely followed by Metlife at 9.3%. Other firms hold less than 6.5% of assets. PowerShares KBW Insurance Fund (NYSEARCA: KBWI ) This fund tracks the KBW Insurance Index and holds 24 securities in its basket. Out of these, TRV takes the top spot at 9.1% while PRU and MET account for the third and fourth spots with a combined 14.4% share. Other in-focus firms like AFL, CB and ALL make up for at least 4% of KBWI. The product has amassed about $7 million in AUM while volume is paltry at under 1,000 shares. The ETF charges an annual fee of 35 bps. Original Post