CHICAGO, Feb. 1, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Wilmington Trust Corporation (NYSE: WL), M&T Bank Corporation (NYSE: MTB), BostonScientific (NYSE: BSX), St. Jude (NYSE: STJ) and Medtronic (NYSE: MDT).

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Here are highlights from Monday's Analyst Blog:

Wilmington Posts Huge Losses

Wilmington Trust Corporation (NYSE: WL) reported fourth quarter 2010 net loss of $213.8 million or $2.35 per share compared with $369.9 million or $4.06 per share in the prior quarter and $15.7 million or 23 cents per share in the year-ago quarter. The results substantially lagged behind the Zacks Consensus Estimate of a loss of 51 cents per share.

For fiscal year 2010, Wilmington's net loss stood at $738.3 million or $8.45 per share compared with $22.7 million or 33 cents per share in the year-ago period. This also compares unfavorably with the Zacks Consensus Estimate loss of $6.44 per share.

During the quarter, Wilmington had announced that it will merge with M&T Bank Corporation (NYSE: MTB). The stock-for-stock agreement is valued at about $351 million and is expected to close by the second quarter of 2011.

Wilmington's results for the reported quarter were mainly hurt by lower net interest income, higher non-interest expenses, lower loan growth, increased levels of nonperforming loans and net charge-offs. However, an increase in non-interest income was among the positives.

Behind the Headlines

Wilmington's total revenue for the quarter was $163.6 million, down 3.9% from the prior quarter and 8.2% from the prior-year quarter. Total revenue also missed the Zacks Consensus Estimate of $175.0 million.

For full-year 2010, the company's total revenue came in at $623.8 million compared with $680.9 million in 2009 and also missed the Zacks Consensus Estimate of $699.0 million.

Net interest income before provision for loan losses was down 11.5% from the prior quarter and 23.1% from the prior-year quarter to $59.9 million. Net interest margin (NIM) fell 45 basis points (bps) from the prior quarter and 79 bps year over year to 2.33%.

The decline in NIM was the result of a decline in loan balances, liquidity additions funded by increases in core deposits and national brokered CD balances and an increase in non-accruing loans.

Average earning assets rose to $10.25 billion from $9.71 billion in the prior quarter and $9.95 billion in the year-ago quarter. However, rate of total earnings assets declined to 3.22% from 3.69% in the prior quarter and 4.10% in the year-ago quarter.

Non-interest income improved 1.1% sequentially and 3.4% year over year to $103.7 million.

Wilmington's total non-interest expense was $202.6 million, up 32.1% from the prior quarter and 52.7% from the year-ago quarter. The increase was mainly attributable to merger-related costs, rise in the reserve for unfunded loan commitments and legal and other costs associated with loan workouts, recoveries, and dispositions.

Wilmington's average core deposit balances were $7.08 billion, up 2.6% from the prior quarter and 5.0% from the year-ago quarter. Loan demand continued to be weak, resulting in total average loan balance to decline 7.4% from the prior quarter and 16.1% from the year-ago quarter to $7.52 billion.

Our Take

Wilmington has been facing reduced client activity and higher credit costs due to sluggish economic recovery. However, its merger with M&T will create a large lender in the eastern U.S. and the combined entity will become a large provider of wealth management. Also, the company is poised to benefit from its geographical expansion.

Wilmington currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. However, considering the fundamentals, we maintain a long-term Neutral recommendation on the shares.

Earnings Preview: Boston Scientific

BostonScientific (NYSE: BSX) is scheduled to release its fourth quarter and fiscal 2010 earnings on February 1, 2011 after the market close. The company is expected to report EPS of 10 cents on revenue of $1.989 billion for the quarter, and EPS of 38 cents on revenue of $7.794 million for the fiscal year, according to the Zacks Consensus Estimate.

Previous Quarter Highlights

Boston Scientific reported an adjusted EPS of 12 cents, surpassing the Zacks Consensus Estimate of 6 cents. However, earnings were flat on a year-over-year basis. Adjusted EPS includes intangible asset impairment charges, restructuring-related charges and discrete tax items, but excludes after-tax amortization expense.

Revenues in the third quarter decreased 5% year over year to $1.92 billion driven by declines in both domestic (6% to $1.10 billion) and international markets (5% to $0.81 billion). Revenues according to the Zacks Consensus Estimate were $1.91 billion.

Defibrillators ship hold and product removal actions slowed the revenue growth rate by approximately 140 basis points or $28 million, as compared with the company's estimate of $44 million due to proper execution of the recovery plan.

For the fourth quarter of 2010, Boston Scientific expects net sales and adjusted EPS in the range of $1.93-$2.00 billion and 15-18 cents, respectively. Given the impact of the first three quarters of 2010, the company estimates ICD ship hold to have a negative impact of approximately $190 million for the full year 2010, compared with the previous estimate of $225 million.

Moreover, for fiscal 2010, Boston Scientific expects sales and adjusted EPS of $7.7-$7.8 billion and 63-66 cents, respectively.

Agreement of Analysts

Revisions in estimates have been insignificant over the last 30 days. Out of 25 analysts covering the stock, estimates have been lowered by 2 for both the fourth quarter and fiscal 2010. No upward revisions in estimates have taken place for these periods.

Pricing pressures especially in the markets of CRM and DES, and economic uncertainty which impacts elective surgeries have been the primary challenges in the recent past. Consequently, we expect Boston Scientific to update the current scenario in both the US and international market.

We remain concerned about the CRM segment that had witnessed sales hiccups for its cardiac resynchronization therapy defibrillators (CRT-Ds) and implantable cardioverter defibrillator (ICDs) in the first quarter of 2010. Although the resumption of CRT-Ds and ICDs sales in the second quarter helped the company regain its competitive edge, we await an update regarding the current status due to the tough competitive landscape created by the presence of players such as St. Jude (NYSE: STJ) and Medtronic (NYSE: MDT) in the ICD market.

In order to diversify its revenue stream, Boston Scientific has been restructuring its product portfolio, which includes divestment of its Neurovascular business and significant acquisitions. We expect more visibility regarding these initiatives during the quarter.

In January 2011, Boston Scientific completed enrollment in the EVOLVE trial, which is meant to evaluate its fourth generation Synergy coronary stent. The study enrolled 291 patients across 29 sites in Europe, Australia and New Zealand. With the completion of patient enrolment, the company might reveal the potential approval date of Synergy.

Our Recommendation

Boston Scientific continues to focus on strategic initiatives to drive growth and profitability. In this respect, the recent divestiture of Neurovascular business has been a smart move, which enabled it to prepay a portion of the debt thereby improving capital structure. This, in turn, paves the way for other suitable acquisitions. We are also encouraged to note that the company is recovering from the ICD shipment issue and anticipates higher revenues over time as it continues to roll out Cognis and Teligen around the world.

The acquisition of Asthmatx and Atritech will enable the company to diversify its revenue stream away from CRM and Cardiovascular areas. However, we continue to remain concerned with its core business where Boston is witnessing significant pricing pressure and loss of market share. Moreover, economic uncertainty is impacting procedure volume.

We currently have a 'Neutral' recommendation on the stock.

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