Stocks & Investing
Stocks and Investing
Stocks and Investing
Tue, June 8, 2010
Mon, June 7, 2010
Sat, June 5, 2010 
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Ford (NYSE: [ F ]), Whirlpool (NYSE: [ WHR ]), Kellogg (NYSE: [ K ]), Altria (NYSE: [ MO ]) and Marvell Inc. (Nasdaq: [ MRVL ]).
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Here are highlights from Thursdaya™s Analyst Blog:
Productivity Ticks Down, Still Pops
Generally, manufacturing productivity tends to rise more (but also be more volatile) than overall productivity. Large sectors of the service sector have historically been almost immune to productivity increases, and government -- literally by definition -- cannot become more productive. Even if magically one FBI agent were able to do the work of the entire Bureau and do it just as well, it would still not show up as in increase in overall productivity in the GDP numbers, as the governmenta™s contribution to GDP is counted by input rather than output in the GDP accounting.
These numbers just refer to non-farm businesses. Still, there are very real limits on how much productivity can increase in many service industries. For example, there has been no real increase in the productivity of barbers in about a century, as the amount of time it takes to cut someonea™s hair really has not changed. Health care is one larger sector that has historically been immune to higher productivity as well, or at least the increases there have not been as well measured.
The first quarter was somewhat of an anomaly in that regard, as manufacturing productivity rose by just 1.5% (2.5% before the revision) but it is up 7.2% (7.5%) year over year. Manufacturing output in the quarter was up a sharp 7.2% (7.5%), but hours worked rose by 5.6% (4.9%, in other words, employment was revised upwards). On a year-over-year basis, output is up 3.2% (3.3%) and hours worked are down 3.0% (3.9%).
Given how much smaller manufacturing is as a share of the overall economy now than it was in the 1950a™s or 1960a™s when we last saw these sorts of overall productivity gains, the current increase is especially impressive. Durable goods manufacturers like Ford (NYSE: [ F ]) and Whirlpool (NYSE: [ WHR ]) were able to continue increasing productivity at a faster rate than the economy as a whole, with growth of 3.0 (3.8%) on the quarter as output surged 10.2% (10.5%), while hours worked increased 7.0% (6.4%). On a year-over-year basis, durable goods manufacturing productivity is up 8.7% (9.0%) as output is up 3.0% (3.1%) while hours worked are down 5.2% (5.4%).
It has been non-durable manufacturing where productivity gains lagged in the quarter, with productivity up 0.9% (2.2%) on the quarter with a 3.3% (4.8%) gain in output and a 3.4% (2.5%) increase in hours worked. On a year-over-year basis, non-durable manufacturing productivity is up 4.7% (5.0%) on a 3.3% (3.4%) increase in output and a 1.4% (1.6%) decline in hours worked. It is not surprising, then, that the earnings gains for non-durable manufacturing firms such as Kellogg (NYSE: [ K ]) and Altria (NYSE: [ MO ]) have not seen the same sort of pop that more cyclical durable goods firms have (nor did they have the implosion in earnings earlier).
Marvell Eyeing eReader Market
At the ongoing Computex 2010 convention in Taipei, Taiwan, Marvell Inc. (Nasdaq: [ MRVL ]) announced that it is joining with Hanwang, the leading eReader solution provider in China, to unveil next-gen, higher performance and versatile eReaders at inexpensive prices.
Computex is the information technology industry's yearly tradeshow, which runs from June 1st to the 5th in Taipei, Taiwan.
Armed with Marvella™s ARMADA 166E, the first System-on-a-Chip (SoC) with an integrated e-Paper Display (EPD) controller, Hanwang's new generation of devices aim to offer better performance, more functionality and lower price points to capture a big share in the global eReader market.
The success of Marvell's differentiated solutions doesna™t seem to end here. Apart from Hanwang, the ARMADA 166E application processor has also been selected by Koobe, another leading eReader solution provider in China, to power its new JinYong Reader.
Going by recent trends, a growing demand for eReading in China, as well as the whole world, would become a significant revenue growth driver for the company in the coming quarters.
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