CHICAGO, Dec. 18, 2012 /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 Cisco Systems Inc. (Nasdaq:CSCO), Nike Inc. (NYSE:NKE), Iconix Brand Group Inc. (Nasdaq:ICON), PVH Corporation (NYSE:PVH) and Brown Shoe Company Inc. (NYSE:BWS).

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Here are highlights from Monday's Analyst Blog:

Cisco to Sell Linksys

Reportedly, Cisco Systems Inc. (Nasdaq:CSCO) will be selling its Linksys wireless router unit. According to media reports, the company has hired Barclays (BCS) to help it sell the home wireless-router company.

This is yet another step by Cisco to exit its consumer-focused business, while strengthening its presence in corporate software and technology services.

In 2003, Cisco acquired Linksys for approximately $500 million in order to make an entry into the consumer networking market. However, strong competition has negatively affected the margins in this business, with a corresponding negative impact on the company's profits. Now, nearly 10 years later, it looks like Cisco is trying to get out of this market.

The current deal clearly reflects Cisco's strategy of downsizing its consumer business in order to save cost and expand in certain strategic areas, including cloud computing, which is viewed by many technology firms as a key area for future growth.

Over the past year, the company has closed several of its consumer businesses, such as the Flip video-camera unit, and reduced about 14% of its global workforce, or around 11,500 employees.

As a part of its cloud and networking expansion strategy, Cisco has made three acquisitions in November. The company has acquired Cariden, Meraki and Cloupia for $141 million, $1.2 billion and $125 million, respectively, in line with its growth strategy.

Earnings Preview: Nike

Nike Inc. (NYSE:NKE), a global leader in sports equipment and apparel, is expected to report its financial results for the second quarter of fiscal 2013 after the market closes on Thursday, December 20, 2012. The Zacks Consensus Estimate for the quarter is $1.00 per share, flat compared to earnings in the prior-year quarter.

Currently, the Zacks Consensus Estimate ranges between 97 cents – $1.04 a share. For the quarter under review, revenue is expected to be $6,019 million, according to the Zacks Consensus Estimate.

With respect to earnings surprises, Nike has topped the estimate in three of the trailing four quarters in the range of negative 14.6% to positive 13.4%. The average surprise over the last four quarters remained positive at 1.3%.

First Quarter Fiscal 2013 - A Synopsis

Nike Inc. reported first-quarter 2013 earnings of $1.27 per share, which ran past the Zacks Consensus Estimate of $1.12. However, the quarterly earnings dipped 9% year over year resulting from poor gross margin, higher SG&A and increased tax rate.

Nike's total revenue augmented 10% to $6,669 million driven by superior demand for Nike brand. Adjusting for currency effect, the company's revenue grew 15%. Revenue for the quarter also surpassed the Zacks Consensus Estimate of $6,438 million.

On currency neutral basis, revenue for Nike brands elevated 16%, while other businesses delivered 9% growth. Revenue from Cole Haan and Umbro, which are to be divested, was up 6%. During the quarter, the company witnessed strength across all key categories and geographies, except Japan.

Earnings Estimate Revisions

Agreement

We do not see any major estimate revisions at this point for the second quarter of fiscal 2013. Of the 15 estimates, only one second quarter estimate was revised upward, while none moved in the opposite direction in the last 30 days. In the last 7 days, no movement in estimates was noticed in either direction for the quarter.

Magnitude

The magnitude of estimate revisions for Nike depicts a slightly optimistic view for the upcoming quarter. Over the last 7 days, estimates for the upcoming quarter remained unchanged, while it rose by a penny to $1.00 per share in the last 30 days.

Conclusion

Recently, Nike successfully completed its previously announced sale of Umbro toIconix Brand Group Inc. (Nasdaq:ICON) for $225 million. Further, the company is in the process to dispose its Cole Haan affiliate brand to Apax Partners. The company expects to close this deal by early 2013.

We believe the divestiture of these brands will help boost the company's bottom lines. Meanwhile, in an attempt to expand its global reach and market share, Nike is capitalizing on growth opportunities in emerging markets, especially China.

Additionally, Nike remains focused on other tools, such as a direct-to-consumer business model, to expand geographically. We believe that Nike's continued investment in China and focus on the direct-to-consumer business will not only help in expanding market share, but will also help strengthen its competitive position.

However, we prefer to remain on the sidelines given sluggish discretionary spending, increase in operating costs, and the ongoing European crisis. Nike faces intense competition in both domestic and international markets from local as well as established players, such as Adidas AG (including Reebok), PVH Corporation (NYSE:PVH) and Brown Shoe Company Inc. (NYSE:BWS).

We retain a long-term Neutral recommendation on Nike. The company currently has a Zacks #2 Rank, which translates into a short-term Buy rating.

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