Matsushita Clears Upward Path

Best known for their Panasonic brand of digital electronic products, Matsushita Electric Industrial Co., Ltd. (MC) has risen from a Zacks Rank #3 (Hold) to a Zacks Rank #1 this morning.  A combination of the settled patent infringement suits recently announced plus earnings results that came in only slightly lower than their rather steep year-over-year comps were two factors helping boost the stock in some brokers' eyes.

MarketWire published this account of the settlement news late on Wednesday: 'As a result of the settlement, Matsushita Electric and Samsung entered into a patent cross-license agreement in the field of semiconductors and will terminate all of the pending actions between the parties. The details of the license agreement will not be disclosed due to confidentiality obligations.'

In the company's fiscal third-quarter results, consolidated group sales for the third quarter amounted to 2,344.6 billion yen (U.S.$20.57 billion), down 4% from 2,436.8 billion yen in the same three-month period a year ago. Of the consolidated group total, domestic sales were down 6% to 1,138.3 billion yen ($9.99 billion), from 1,214.5 billion yen a year ago. Overseas sales decreased to 1,206.3 billion yen ($10.58 billion) from 1,222.3 billion yen in the third quarter of fiscal 2007.

Currently, Matsushita shares are enjoying a boost of about seven-and-three quarters percent this morning.  The latest check of the ticker revealed MC up $1.52 to $21.08.

Sundance Gives Luxottica Exposure

Another Sundance Film Festival brought Hollywood celebs to Park City, UT for independent film screenings, Rocky Mountain skiing and general entertainment biz hobnobbing.  Which is just fine with Luxottica Group (LUX), the makers of Ray-Bans, Bvlgari, Chanel, Dolce & Gabbana, Prada, Versace and now Oakley.  Shares of Luxottica are up this morning, and the stock's rating has risen from a Zacks Rank #3 (Hold) to a Zacks Rank #1 (Strong Buy).

During the company's recent earnings report conference call, Andrea Guerra, chief executive officer, said this: 'Fiscal 2007 was another exceptional year for our Group, marking the fourth consecutive year of double-digit growth in sales. We reached our stated goal of euro 5 billion in sales, reflecting an increase of 12.6% at constant exchange rates from 2006. This result was achieved thanks to a performance in line with the record performance of 2006, when consolidated net sales rose by 14%.'

This is in addition to this morning's announcement that the Milan, Italy-based firm is signing a new partnership agreement for eyewear collections under the CHANEL brand.  Shares are up a shade over 4% this morning thus far, or +$1.10 to $28.05.

Withing the company's earnings report, sales in the group's wholesale business -- excluding the newly acquired Oakley -- rose by 20% at constant exchange rates, reaching Euro 2 billion, thanks to the important work carried out with the brand portfolio. Wholesale sales to third parties for the year -- a key measure of the business -- rose by 21.7 percent, excluding effect of exchange rates. Ray-Ban posted its fifth year in a row of double-digit sales growth.

Tesoro Suffers Big Earnings Miss

Reporting its EPS of -$0.29 per share today, mid-cap oil refiner and marketer Tesoro Corp. (TSO) posted a nearly off-the-charts negative earnings surprise.  In the year-ago quarter, TSO announced a positive $1.14 per share, for a -125% difference year-over-year.  Tesoro's West Coast refineries cited weak crack spreads, higher operating expenses and poor marketing margins -- including at its Hawaii plant, which posted an $86 million pre-tax operating loss for the quarter. In total, quarterly refining operating earnings were $9 million compared to fourth quarter earnings of $284 million a year ago.

As expected, shares are down on the news.  Tesoro is trading roughly four percent lower to 38 and three-quarters thus far today.  We will be interested to read the next equity research report from Zacks senior oil & gas industry analyst Sheraz Mian, which should be released relatively soon.  In his last report on the company, he rated TSO shares a Buy with a target far higher than its sub-$40 price today. 

Pick Up Vivo for Brazil Telecom

Here's what Zacks senior Latin American markets analyst Claudio Freitas, CFA had to say about Brazilian telecom company Vivo Participações (VIV), on which he reiterates his Buy recommendation:

'We are keeping our Buy rating on Vivo Participações S.A. The company has a dominant position and a strong brand in the fast growing Brazilian wireless business. Third quarter operating results were positive, and the short-term outlook remains encouraging.

'Meanwhile, the improvement in the Brazilian economic environment will eventually lead to Brazil being upgraded to investment grade within the next twelve months. Finally, the acquisition of Telemig (TMB), coupled with the new bands in all the regions where the company was not yet authorized to operate, was positive news.

'We understand the current valuation of VIV is attractive if compared to Tim Participações (TSU), its biggest competitor in the Brazilian market. Moreover, if we analyze the price/sales ratio, the stock also seems to be highly undervalued.'