The Zacks Analyst Blog Highlights: IBM, Oracle, salesforce.com, SAP
and Chevron
CHICAGO, Dec. 7, 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 International Business Machines
Corp. (NYSE:IBM), Oracle Corp. (Nasdaq:ORCL),
salesforce.com (NYSE:CRM), SAP AG (NYSE:SAP) and
Chevron Corporation (NYSE:CVX).
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Here are highlights from Thursday's Analyst Blog:
IBM Closes Kenexa Buy
International Business Machines Corp. (NYSE:IBM)
has completed the $1.3 billion
acquisition of Kenexa. IBM had agreed to buy Kenexa in August 2012. Kenexa develops software that helps
enterprises manage human resources ("HR"). Its HR solutions are
widely popular and its strong client base consists of approximately
8,900 customers across a number of industries.
The Kenexa acquisition will further expand IBM's business
analytics software offerings going forward. The acquisition is a
major strategic move by IBM to bolster its position in the cloud
based software-as-a-service ("SaaS") market. SaaS is a software
delivery method that enables data access from any device with an
Internet connection and web browser. In this web-based model,
software vendors host and maintain servers, databases and codes
that constitute an application.
Moreover, demand for SaaS-based products has been on the rise
for some time and is expected to increase manifold because of some
inherent benefits associated with the platform. Applications
delivered over the SaaS platform not only allow enterprises to
start using them instantly, but they are also more cost effective
compared to traditional products installed at a customer's onsite
data center. Software updates are also smoother.
IBM is already a leader in enterprise social software, according
to IDC. Moreover, IBM's solutions cater to approximately 60% of the
fortune 100 companies. We believe that the growth prospects in the
SaaS segment is the primary factor attracting IT giants, such as
IBM, Oracle Corp. (Nasdaq:ORCL), salesforce.com
(NYSE:CRM) and SAP AG (NYSE:SAP). Both SAP and Oracle enjoy
a leading position in the SaaS-based application market based on a
number of acquisitions (SuccessFactors, Ariba, RightNow, Taleo) in
the recent past.
We believe that IBM's entrance into the cloud-based HR solutions
market will intensify competition going forward. Although it is
very difficult to predict a clear winner among these companies
considering the depth of their product portfolios and diversified
customer base, we believe that IBM has an advantage due to its
strong balance sheet. IBM intends to spend $20 billion on acquisitions up to 2015.
Thus, we remain Neutral over the long term. Currently, IBM has a
Zacks Rank #3 (Hold).
Chevron Unveils $36.7B Capex
Budget
U.S. energy behemoth Chevron Corporation (NYSE:CVX)
offered a glimpse of its 2013 capital spending plans. The
integrated major said that it will boost its capital expenditures
by about $4 billion in 2013, as the
company allocates the bulk of funds toward the 'Exploration &
Production' segment, while continuing to be cautious about the
amount of resources it devotes to the refining business. Chevron's
focus on the upstream business can be attributed to its strong
portfolio of pipeline projects.
The second-largest U.S. oil company by market value has pegged its
2012 capital budget at $36.7 billion,
up more than 12% from the $32.7
billion it expects to invest by the end of 2012. Of the
total, roughly 90% will go toward oil and gas exploration projects
worldwide, and 7% for downstream businesses.
Upstream: A major portion of the 2013 spending has been
earmarked for large, multi-year developments. Chevron is planning
to spend $33 billion for the
exploration, production and natural gas-related projects,
concentrating on the company's successful and focused drilling
results in recent years, as well as for further appraisal and
evaluation of other prospective areas in the world's major
hydrocarbon basins. Major initiatives in 2013 are expected to
consist of the Gorgon natural gas project in Australia, as well as opportunities in the
deepwater Gulf of Mexico,
Kazakhstan, Nigeria, Angola and the Republic of Congo.
In particular, Chevron said that the cost of its majority-owned
Gorgon natural gas development in Australia has jumped 40% to $52 billion because of a stronger Australian
dollar, steep labor costs, infrastructure challenges and weather
delays.
Downstream: Capital spending in the downstream segment is
expected to be $2.7 billion in 2013,
primarily assigned for improving refinery efficiency, maximizing
yield and producing cleaner fuels. Downstream outlays will include
projects at the company's facilities in Pascagoula (Mississippi) and Singapore.
Other: Lastly, the company is expected to spend
approximately $1 billion in 2013 for
technology, power generation and other corporate activities.
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