Zacks Analyst Blog Highlights: Costco, Myriad Genetics, Huntington Bancshares, School Specialty, Inc. and Telefonica

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: Costco (NASDAQ: COST), Myriad Genetics (NASDAQ: MYGN), Huntington Bancshares (NASDAQ: HBAN), School Specialty, Inc. (NASDAQ: SCHS) and Telefonica (NYSE: TEF).

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Here are highlights from Wednesday’s Analyst Blog:

Well-Run Costco Still Hit Hard

Early this morning, Costco (NASDAQ: COST) reported net sales of $5.10 billion for the 4 weeks ended February 1, 2009. This was roughly flat with the same 4-week period last year. Total company comp-store sales decreased 2% with its U.S. stores flat and its international stores down 9%. The company noted that its comps were negatively affected by gasoline deflation. Excluding gasoline and foreign exchange, Costco had a comp-store increase of 5%.

The real news, however, was Costco’s updated earnings outlook for its fiscal second quarter ending Feb 15. The company expects its second quarter earnings per share to be "substantially below" consensus estimates. The Zacks consensus was $0.71 for the second quarter prior to Costco’s announcement.

Myriad Genetics Blows Away Ests

Myriad Genetics (NASDAQ: MYGN) relies on its predictive medicine for its revenue generation and is currently seeing solid growth in this business. On February 3, 2009, Myriad reported fiscal 2Q09 financial results ended December 31, 2008.

For the 3-month period ended December 31, 2008, total revenues increased to $84.4 million from $56.7 million in the same 3 months in 2007, an increase of 48.7%. This growth resulted primarily from an increase in molecular diagnostic revenues, which were $84 million this quarter, compared to $53.1 million in the same quarter of the prior year.

Huntington Bancshares Still a Sell

Since we lowered our rating on Huntington Bancshares (NASDAQ: HBAN) to a Sell on January 24, 2008, the shares have retreated more than 83%.

Net charge-offs and non-performing assets continued to increase substantially, reflecting the stressed economy across the U.S. and within HBAN's footprint. We expect this trend will continue to weigh upon the shares over the next several quarters. On a core basis, the company experienced a loss of $0.14 per share for 4Q08.

Sell School Specialty Down to $11

School Specialty, Inc. (NASDAQ: SCHS) is a company serving the pre-K-12 education market by providing products, services, and ideas which enhance student achievement and development to educators and schools across the U.S. School Specialty's family of brands serves more than 116,000 schools throughout the U.S. and Canada, with a comprehensive range of more than 100,000 products.

Back on November 20, School Specialty reported disappointing results for its fiscal second quarter, and management lowered its guidance for the fiscal year 2009. The shortfall was due to a decline in state revenue. SCHS is highly dependent on state and local governments for its revenues. A weak economy and de-leveraging in the credit markets will only exacerbate the problems in local government funding.

Telefonica Conquering Brazil

Yesterday it was announced that Brazilian industrial production declined in December 2008 12.4% from November and 14.5% from December 2007. Those numbers were worse than expected, and reflects the huge impact of the crisis in an economy that was growing almost 7% per year.

For January 2009 there are some positive signs, as car sales are growing again and consumer confidence remains up. Inventories declined very fast in the end of 2008, thus some recovery is expected for the beginning of 2009.

Despite those negative numbers, confidence is still up among consumers and corporations. Also yesterday, Spanish Telefonica (NYSE: TEF) announced it will increase investments in Brazil by 20% in 2009 to BRL2.4 billion or US$1.04 billion. Mr. Antonio Valente, CEO of Telefonica in Brazil, still expects economic growth of 2% in 2009 and understands that the wireless business will not be that much affected by the crisis.

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