Analyst - Zacks Analyst Blog Highlights: Hewlett Packard Company, 3Com Corporation, Cisco Systems Inc., Wal-Mart Stores Inc. and GlaxoSmithKline, plc

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: Hewlett Packard Company (NYSE: HPQ), 3Com Corporation (Nasdaq: COMS), Cisco Systems Inc. (Nasdaq: CSCO), Wal-Mart Stores Inc. (NYSE: WMT) and GlaxoSmithKline, plc (NYSE: GSK).

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Here are highlights from Thursday?s Analyst Blog:

Hewlett-Packard to Acquire 3Com

Hewlett Packard Company (NYSE: HPQ) is planning to take over networking gear maker 3Com Corporation (Nasdaq: COMS). The acquisition, valued at $2.7 billion, enables HP to challenge networking leader Cisco Systems Inc. (Nasdaq: CSCO) on its own turf.

HP?s current networking products, sold under the ProCurve brand, generate around $1 billion in annual sales (less than 1% of the company?s total revenue). The product line lacks competitive data center switches, which makes it hard to take market share from well-entrenched Cisco.

3Com's expertise is in networking products for data centers, which supports HP's ProCurve networking equipment. Although the company has seen better times, it has been beefing up its portfolio by utilizing its design capabilities in low-cost China. The company is, therefore, in a position to compete aggressively on price. 3Com?s challenges include its poor brand value in American and European markets and its weak position in these geographies.

The HP-3Com combination is therefore an ideal fit, in our opinion. If the deal closes, HP will acquire a new capability overnight, strengthen its position in China and grow at its competitor?s expense. 3Com will benefit from HP?s superior brand value and find a broader market for its new products.

Wal-Mart Sales Up in U.S., Europe

Wal-Mart Stores Inc. (NYSE: WMT) reported strong fiscal third-quarter earnings of 84 cents per share, which surpassed the Zacks Consensus Estimate of 81 cents. Earnings grew 9.1% year over year from 77 cents recorded in the year-ago quarter, and exceeded management?s guidance of 78 cents to 82 cents per share.

Wal-Mart?s net sales recorded a growth of 1.1% year over year to $98.7 billion, as a 1.2% expansion in Wal-Mart's U.S. segment coupled with a 1.6% increase in the International segment was partially offset by 0.7% decline in the Sam?s Club segment. The growth in International sales was driven by robust performance in the U.K., Mexico and Brazil, but was limited by unfavorable currency fluctuations.

The retailing behemoth, widely considered as a barometer of the country?s economy, said U.S. same-store sales dipped 0.5% year-over-year, while that for Sam?s Club rose by 0.1%.

Glaxo Reports Higher Revenues

GlaxoSmithKline, plc (NYSE: GSK) reported third quarter income of 92 cents per American Depository Share (ADS), 3 cents below the Zacks Consensus Estimate. The company reported earnings of 94 cents in the year-ago period.

Third quarter 2009 revenue increased 3%, with growth being driven by strong performances in emerging markets (up 25%), Japan (up 19%) and Consumer Healthcare (up 8%). We were pleased to see growth in Consumer Healthcare revenue despite the global slowdown.

Meanwhile, US sales continued to be impacted by generic competition with revenue declining 12%. Sales of products like Imigran (down 74%), Lamictal (down 21%) and Requip (down 30%) and Wellbutrin XL (down 81%) kept declining.

Pharmaceutical product revenue increased 2% with sales being driven by Advair/Seretide (up 5%) and Relenza. Relenza benefited from continued orders from several governments for stockpiling.

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